19 Oct 2021
NFU Energy - Energy Crisis 2021 - Higher prices all round?
Energy prices are continuing to rise and this trend has barely reversed throughout the whole of 2021. Whilst it is impossible to say how long the crisis will last, it is certainly fair to say that prices will stay at a sustained high level for some time to come. Put into numbers – gas commodity is hovering around 250p/therm (8.5p/kWh) and electricity around the £250/MWh (25p/kWh) up three times on what they averaged at this time last year. Electricity prices are also further added to by the non-commodity costs added to them such as taxes and green levies and contract prices, sometimes meaning they are closer to 30p/kWh. A few factors have combined to put us in this current situation. Namely -
- The relatively cold winter and spring earlier this year 2020/2021;
- Two nuclear power stations then failing to come online again after scheduled maintenance after summer;
- The UK having had its least windy year in 60 years;
- Supplies from Russia tailing off by 25% less than 2020;
- EU gas storage facilities having delays on scheduled maintenance (postponed by Covid) meaning levels hadn’t been sufficiently topped up;
- Demand from other markets effecting our access with both Asia and South America now paying more for gas than previously they had done.