UK Energy Prices Will Stay High, Equinor Boss Says

A bunch gathers to protest power payments in London on December 3, 2022. Rasid Necati Aslim / Anadolu Company through Getty Pictures

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UK residents mustn’t count on their fuel and electrical energy payments to return to pre-pandemic ranges, the chief govt of one in every of Europe’s largest power corporations informed the BBC in a broadly reported interview.

Talking first on the World Financial Discussion board, which began on Monday in Davos, the chief of Equinor Anders Opedal mentioned that the power disaster attributable to the Russian invasion of Ukraine and the worldwide response to the local weather disaster are basically altering in the established order.

“We’re seeing a rewiring of your entire European power system,” Opedal informed BBC Radio 4’s As we speak programme, as reported by The Guardian. “We want extra renewables. It requires lots of funding and these investments have to be paid for. I consider that the power payments [ultimately] could also be a bit increased than prior to now however not as rapidly as now.”

Fuel costs started to rise after the tip of the coronavirus lockdowns after which rose additional after Russia’s invasion of Ukraine and the following discount in fuel provides in Europe, defined BBC Information. The UK is especially susceptible to the consequences of this spike because it depends on fuel for a bigger share of its power provide than different European nations. About 85 p.c of houses are heated by fuel boilers and about 40 p.c of their electrical energy comes from fuel, in keeping with the London Faculty of Economics. On the similar time, its homes are comparatively poorly insulated.

Within the winter of 2021, the common annual power invoice within the nation will likely be round £1,000. It might have risen to greater than £3,500 by October 2022 with out authorities intervention. Because it stands, with the assistance of the federal government the annual common invoice is now £ 2,500 a yr and can bounce once more to £ 3,000 in April, in keeping with The Guardian.

Whereas fuel costs have thus far fallen to pre-invasion ranges, partly because of warmer-than-expected climate, house and enterprise fuel and electrical energy payments are nonetheless excessive, BBC Information reviews as Opedal mentioned they had been unlikely to return to the earlier common of £1,300 a yr. As a substitute, he known as for a change in how power is considered.

“I believe we’ve to think about power as one thing that’s not ample. It really has a worth,” Opedal mentioned on the BBC’s As we speak program, as reported by the Press Affiliation. “I believe we’ve lots of low cost that power earlier than and we could have wasted a few of it. So, to ensure we make the best funding everybody desires to make use of as little power as doable. “

Whereas Opedal mentioned that financing the transition to renewable power would enhance the invoice, different local weather consultants argue that top power costs are the results of reliance on imported fossil fuels as a substitute of home renewable power.

“Whereas local weather contrarians attempt to pin rising power payments on ‘internet zero prices,’ in actuality they’re crippling costs, together with rising local weather impacts and cynical despotism of Putin, the quantity isn’t zero,” the senior affiliate of the Power and Local weather Intelligence Unit. Richard Black writes for Local weather Residence Information.

Norwegian-based Equinor makes most of its earnings from oil and fuel, in keeping with BBC Information. It itself didn’t endure through the power disaster, reporting file earnings because of excessive costs together with different main fossil gas corporations. It made $24.3 billion earlier than tax between July and September of 2022, up $9.7 billion from the identical interval in 2021.

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