The uncertainty around rising energy costs – why you should stop relying on the grid

Mar 25, 2022

Fuel prices have always had a tendency to fluctuate, but 2022 has seen eye-watering price rises at the petrol pumps and on domestic energy bills, leaving millions of people wondering how they’ll be able to afford to run their car or heat their home.

The timing of this crisis is ironic, coming in the wake of COP26 in Glasgow last December, when the world’s leaders signed up to increase their commitment to tackle climate change. One thing they didn’t mention in the Glasgow agreement was a plan to price households out of consuming fossil fuels but now that is exactly what is happening.

Isn’t it time we all stopped relying on gas?

Why is fuel so expensive?

The COVID-19 pandemic, unfavourable weather conditions and international conflicts have combined to create a global energy crisis. As countries came out of lockdown into a cold winter, there was a spike in demand for natural gas, which used up reserves and left a shortage. As demand outstripped supply, prices went up.

This situation has been exacerbated by Russia’s invasion of Ukraine. Russia is the world’s largest exporter of natural gas and if it decides to retaliate to sanctions by cutting off its supply, the shortage will deepen and prices will rise further.

This doesn’t just affect the gas supply to your home. Most domestic electricity is produced by power stations that are fuelled by coal or gas, so the price of electricity is also dependent on supplies of these fossil fuels.

Renewable energy, eg from wind farms and solar, is contributing an increasing proportion of the energy we consume but 2021 saw low productivity from European wind farms due to the weather. All these events have come together to hit energy suppliers hard. Last year 28 UK energy companies went bust because the energy cap that Ofgem (the energy regulator) applies to keep prices affordable prevented them from passing on rising costs to their customers. Now Ofgem has raised the energy cap, adding £693 a year on average to household energy bills.

Will the energy crisis improve?

This energy crisis is not a fleeting moment in economic history, it is a watershed moment in the story of our planet. We are two years into the decade that has been labelled “the last chance saloon” in terms of averting catastrophic global warming. The shortage of gas is not just a temporary inconvenience, it is a foretaste of the world we need to live in. In short, we must adapt to it.

With the war in Ukraine going on, the reliance on Russian gas will continue to leave the global market in a precarious position. Even if peace is negotiated and political relations return to something bordering on stability, the COP26 agenda to phase out the burning of natural gas and coal will enforce a significant change to the way we produce and manage our energy.

This will all put added pressure on the National Grid, which operates the UK’s electricity and gas supplies. The Grid is currently a hybrid of fossil fuels, nuclear and renewable energy sources but as fossil fuels are phased out, the reliance on renewables will grow. Overcoming the energy crisis will depend on our ability to harness natural energy from the wind and sun and that in turn will require participation from all of us.

Can we produce enough renewable energy?

One of the advantages of renewable energy is that it is infinite – the sun and the wind are not going to run out any time soon. But they are not constant either. There are cloudy days and calm days. To cover ourselves against this variability, we need to build a National Grid that spreads the load as widely as possible.

This is where domestic energy generation comes in. Already homes with solar panels have been integrated into the Grid. During periods of high productivity (sunny days) they can feed back excess electricity to the Grid and then draw power from the Grid when solar productivity is low (eg at night).The more homes that generate their own energy in this way, the less the demand on the National Grid and the more its own solar and wind farms can meet the nation’s needs. Wind power contributed 24% of the UK’s energy in 2019, a sevenfold increase over 10 years. By contrast, solar power made up just 4% but it too is on the increase.

The potential for domestic solar energy is huge. As of 2020 just 3.3% of UK households had installed solar photovoltaic panels. That remaining 96.7% represents a vast amount of untapped real estate, just waiting to contribute to the nation’s energy requirement.

The future of domestic energy

By 2030 the National Grid needs to have taken on a very different look. No longer a centralised supplier reliant on gas and coal, it will be a vast network of distributed assets, all working together to provide clean energy where and when it’s needed. Aside from nuclear, it will be a hybrid of large-scale and domestic renewables generators, advanced battery storage and highly sophisticated optimisation technology, using artificial intelligence to manage supply and demand by the second, in the most efficient way possible.

Homeowners will play a vital role in this Grid. Our solar installations will contribute to the electricity demand, our electric vehicles’ batteries will provide a share of the storage requirement and by generating our own power, our reliance on the Grid will be vastly reduced.

As the old saying goes, there’s safety in numbers. The more of us who produce our own energy, the more resilient we will be to a world of uncertainty.

Want to know what you can do to join the growing number of home solar generators? Click here to learn more.

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