The horrifying Russian invasion of Ukraine continues to rumble on.

Each new day brings news of further casualties, displaced citizens, sanctions, moves, and counter-moves.

The stranglehold that Russia currently exerts over the natural gas markets has often been placed in the centre of conversations regarding NATO sanctions – how do we sanction a country that we are so reliant on?

The precarious economic position much of NATO finds itself in has hammered home some hard truths, the way in which we source our energy needs to change.

And it needs to change now.

Changes in the UK

As war in Ukraine caused further volatility in the European energy market, the bleakest warning yet was issued by climate change scientists in the form of the most recent IPCC Report. This led the UK’s secretary of state for business, energy and industrial strategy, Kwasi Kwarteng, to voice his current stance on a UK clean energy future.

It is possible to view the tweets on Kwasi Kwarteng’s Twitter account – which came as a major intervention during a vital juncture. He adds his weighty voice to a growing cacophony of leading experts in the UK energy industry pushing for clean energy and rejecting fossil fuels.

As the invasion of Ukraine incited a huge upheaval in the worldwide energy markets, gas prices in Europe were already soaring. This is in part due to Vladimir Putin’s tightening of gas supply to the EU, which in hindsight, seems a crystal-clear precursor to his invasion intentions.

Germany too has announced a suite of new energy policies with the country’s Green party – currently in a ruling coalition – even reconsidering their staunch opposition to nuclear power. This is seen across the EU, with many nations ramping up their low-carbon energy efforts.

This will inevitably affect businesses, most recently BP gave up its significant stake in Rosneft while Shell did the same with Gazprom. Unfortunately, the invasion and volatility has added impetus to some movements pressuring the UK government to postpone the goal of reaching net zero greenhouse gas emission in order to prioritise short-term solutions for the current problem – mainly rejuvenating fossil fuel supplies.

Kwarteng’s statements have addressed these issues to some degree – acknowledging that the North Sea oil and gas are seen by many as an invaluable tool in staving off economic threats and energy insecurity. The UK’s own fossil fuel resources are still seen as totemic for many nay-sayers of net zero ambitions.

This particular outlook conveniently overlooks the fact that much of UK production of North Sea oil and gas is sold abroad to the highest bidder – with the amount exported recently doubling.

Changes in Germany

Germany too have outlined their aims to speed up the growth of their wind and solar energy projects. This move has been brought forward by the invasion of Ukraine, which has underscored the crucial need for Europe to reduce their reliance on Russian gas.

Europe as a whole has found it difficult to cut back on their insatiable demand for imported Russian gas, and Germany is no exception to this. Germany is currently the largest economy in Europe with prior commitments to exit nuclear power this year and coal-fired power by the year 2030.

Germany’s Economy Ministry have outlined their desire to speed up passage of the Renewable Energy Sources Act (EEG) through parliament so that it can come into force by the 1^st of July 2022. A leading member of the Greens party, economy minister Roberts Habeck, has said that faster expansion of renewables is the key to reducing Germany’s reliance on Russian fossil fuels.

The Renewable Energy Sources Act – What is it?

This Act would see Germany suspend cuts to subsidies for new solar panels on roofs this year and increase solar tenders to 20 gigawatts by 2028, keeping them at this level until 2035. Currently the figure lies at around 5 gigawatts. Germany would also seek to boost their tender volumes for onshore wind energy to 10 gigawatts annually and keeping them at that level through until 2035.

These steps would potentially lead to renewable sources providing 80% of Germany’s electricity needs by 2030. In five years on from 2030, the entirety of German electricity demands will be sourced by renewables.

This entirely trumps the previous target of abandoning fossil fuels well before 2040.

By 2035 the onshore wind energy capacity for Germany should double to up to 110 GW, offshore wind reaching 30 GW and solar energy tripling to 200 GW. To promote offshore wind energy, Germany would allow a new type of contract that would allow operators to make additional profits if electricity prices are high.

In light of Russia’s invasion of Ukraine, there has been resistance to Germany’s commitment to end nuclear power from various parties within the country. There have been calls to reconsider the commitment, but Berlin has been vocal that they are not at a point where they could make a decision on that.

UK Domestic Customers

Energy bills for domestic customers are set to skyrocket again from April, with many feeling the pressure on their budgets. Savvy customers have found a tactic to alleviate some of this pressure – the answer?

Installing solar panels.

This also comes off the back of the pandemic as homeowners are increasingly working from hom, and therefore using more energy during the day. Many see installation of solar panels as a cost-cutting method, with some even earning from the energy they generate.

Solar Panels – What do they cost?

Solar panels operate under the basic guise of turning energy from the sun into electricity – stronger sunlight equals more electricity. This can then be used in homes or exported to the national grid.

Installation of solar panels can cost almost £5,000 and rising labour bills in combination with photovoltaic panel shortages are contributing to prices rising further. Each domestic system is usually made up of 10-15 panels generating between 200W to 300W. The more panels, the higher the potential for energy.

For a 3.5 kW system, the average cost is £4,800 including labour. This tends to be about 12 panels but does not include the price of a battery. Batteries allow for solar energy to be stored for use at a later time and can cost between £1,200 and £6,000. It may not seem like it, but solar system prices have declined over the last decade barring the recent exception of labour price inflation and supply shortages.

Solar Panels – How much money do they make?

Under the Smart Export Guarantee households have the ability to be paid for electricity that they do not use and is exported back into the grid. Solar panel users are able to shop around for the best price for their solar energy, with trade associations listing the best rates for feeding into the grid.

Unfortunately, the potential savings and duration taken to recoup investment will vary massively depending on where a home is located, whether the electricity is sold back into the grid and how much energy is used.

The Energy Saving Trust state that there has been little research into how solar panels affect the value of a property but is clear that those with better energy performance sell for more. Other reports suggest that properties with solar panels immediately increase in value by £1,800.

The Microgeneration Certification Scheme (MCS) certifies installations and products that are used to produce electricity and heat from renewable sources, and are the first stop in finding accredited installers nearby.

Customer Billing – Will I Be Affected? 

For UK energy customers, it is difficult to say how your bills will be affected due to the serious volatility in the energy markets. It is important to remember that energy prices as a whole are rising, and this will be passed onto consumers through energy bills, making it something to keep a close eye on.  

Different suppliers will feel the pinch in different ways so it is crucial to be aware of the current situation your energy supplier finds themselves in. Energy Solutions keeps up to date supplier profiles for all of the energy suppliers in the UK, which you can find here. 

At a time where bills look set to rise due to market volatility, it is also a good idea to ensure that you are not being overcharged for any of your utilities. It can be a tricky task to navigate but Energy Solutions has curated online tools to remove the hassle.  

You can find our free online Gas Bill Calculator here. 

You can find our free online Electricity Bill Calculator here. 

Energy Solutions by Us, for You  

At a time of great uncertainty in global energy markets, it is easy to feel lost in it all.  

Keeping up to date with developing situations and the associated ramifications is a tricky and time-consuming job. It is also one that is not likely a priority for you and your business.

So, what do you do? 

You partner with energy procurement experts to take the load off of your desk. 

Energy Solutions have been trusted brokers for countless businesses for over twenty years, which means we know how to navigate the energy markets during a time of uncertainty. 

Website: https://www.energybrokers.co.uk/ 

Email: nick@energybrokers.co.uk 

Call Us: 0131 610 1688 

WhatsApp: 07757 400 788