Energy Crisis Uk Households Hit Hardest In Western Europe Imf Finds Energy Bills

The reason is the UK’s heavy reliance on natural gas to heat homes and generate electricity at a time when Russia’s war in Ukraine has sent gas prices soaring. In addition, the UK has the least energy efficient homes in western Europe. Cut household spending There is broad agreement among energy experts on the best solutions: a large-scale and rapid insulation program and faster development of wind and solar power, which produce electricity that is currently about nine times cheaper than that from natural gas; as well as short-term financial support for bill payers. The government has consistently failed over the past decade to implement major insulation programs and has effectively banned onshore wind. The IMF analysis assessed the impact of the energy crisis expected for the whole of 2022, based on fossil fuel futures prices in May, since prices have risen. It found that the average UK household is expected to lose 8.3% of its total spending power in 2022 as a result of having to pay higher energy bills. The figure in Germany and Spain is 4%, while only households in Estonia and the Czech Republic face higher impacts than the UK across Europe. Increases in energy bills also increase the cost of other goods as sellers pass on the price increases. These knock-on effects will shave another 2% off the money UK households have to spend in 2022. The IMF’s analysis takes into account that people cut back on energy use as prices rise. “The impact of distribution is highly skewed [in the UK]said Oya Celasun from the IMF. The poorest 10% of UK households are expected to spend 17.8% of their budget on energy in 2022, while the richest 10% will spend 6.1%, according to the analysis. The difference of 11.7 percentage points is by far the largest difference among the 25 European countries assessed. In France the difference is 3.9 percentage points and in the Netherlands 2.5. Energy costs as a percentage of income Deutsche Bank’s analysis also shows that UK bill payers are being hit hard by the energy crisis. It found that consumer price inflation for gas and electricity in the UK in 2022 is forecast to be around 80%, compared to an average of 40% across the 19 countries that use the euro. “The UK has higher energy prices, compared to other economies in Europe,” said Sanjay Raja, chief UK economist at Deutsche Bank. “The fact is that the UK is more dependent on natural gas.” The vast majority of UK homes – 85% – use gas for heating, a legacy of the exploitation of the North Sea gas fields, which are now in decline. In France and Germany, less than 50% of homes are heated with natural gas. The UK also relied on natural gas to generate more terawatt-hours of electricity in 2021 than any of the 39 European countries analyzed by thinktank Ember, apart from Italy. Electricity from natural gas is the most expensive for electricity and sets the price for all electricity, due to the current structure of the UK market. Electricity generated from gas In terms of the share of electricity generated from natural gas, the UK is at 40%, Germany at 15% and Denmark at 6%. “The UK’s energy crisis is a fossil gas crisis,” said Sarah Brown at Ember. “UK dependence on fossil gas punishes ordinary people”. Archie Bland and Nimo Omer take you to the top stories and what they mean, free every weekday morning Privacy Notice: Newsletters may contain information about charities, online advertising and content sponsored by external parties. For more information, see our Privacy Policy. We use Google reCaptcha to protect our website and Google’s Privacy Policy and Terms of Service apply. “Another key difference is that houses in the UK are incredibly inefficient,” said Lisa Fischer at thinktank E3G. Leaky UK homes are the least efficient in Western Europe, according to an analysis: UK homes lose 3C in the same time as German homes lose just 1C. People living in two-thirds of the homes of the UK that are energy inefficient, rated D or worse, will pay at least £1,000 more this winter. The solution to the UK’s energy crisis is much better insulation, replacing gas boilers with heat pumps and accelerating the development of renewables, Raja said. Short-term measures include reducing the flow temperature in condensing gas boilers and replacing household appliances with more energy-efficient models, Fischer said. Further financial support for UK households will also be necessary, but Celasun, at the IMF, said this should be targeted at vulnerable households: “For example, it would be full compensation for the poor and support could be reduced gradually as incomes rise.” He said fully offsetting price increases for everyone would remove a strong incentive to use less energy, which reduces both the cost and carbon emissions of warming the climate. Jess Ralston, at the Energy and Climate Information Unit, said: “The Government currently has no serious plan to reduce our dependence on natural gas, so the new Prime Minister will need to quickly boost existing energy efficiency programmes. With the price of natural gas so high, the return on that investment would be extremely fast.” Increasing North Sea gas supply will not lead to sufficient quantities to lower energy prices, which are set internationally, Raja said: “When it comes to the UK and energy, we are price takers.” Fischer also dismissed the idea that fracking in the UK could ease the energy crisis, describing it as “nonsense”. “It’s really important that we start planning for action now, because we know that next winter is likely to be at least as difficult, if not more difficult than this winter,” Fisher said. “Germany is starting to get things in line, especially in terms of funding for building efficiency and switching to heat pumps. In the UK, there is a total lack of effort to do those things that help you permanently insulate people from higher energy prices.”

title: “Energy Crisis Uk Households Hit Hardest In Western Europe Imf Finds Energy Bills Klmat” ShowToc: true date: “2022-11-14” author: “Michael Lockhart”