July 6, 2022
Why Are Energy Prices Still So High?
During mid to late 2021 the crisis began, gas, electricity, and petrol prices started to rise at an expeditious rate. Energy companies where collapsing, customers where paying thousands more than usual and nobody knew what was happening. In addition to this, the dust never seemed to settle, and almost a year later, businesses and the public are still falling victim to high energy prices, and nothing seems to be changing. Even with news coming out every day informing us on ‘how to beat the crisis’ and ‘how to save money', many people are not sure what to do, where they stand or why prices are still high.
Hopefully, by the end of this blog, you will know a bit more about why the price of energy has not decreased in the past year, and how we have failed to take control of the spiralling costs.
Why did it rise in the first place?
For the most part, wholesale prices have remained high through the crisis, and the reasons for them rising in the first place are still some of the biggest reasons for the current high prices. Some of these include a huge increase in demand during summer 2021, a lack of wind power created during 2021 and a lack of storage around the world.
Why are prices still so high?
Now, there a few more reason for the high prices, such as the Russia and Ukraine conflict, which has caused a spike in prices. The fact that many energy companies have failed, causing a huge switch in customers and further stress on surviving energy companies and providers. Winter 2021 and early 2022 was also something which helped skyrocket prices, as during the winter months, people use more energy to keep houses and office buildings warm, therefore the already short supply was being rapidly used up and therefore prices had to increase.
What is in store for the future?
Although there are many reasons why the price of energy has risen, this crisis has reinforced the importance of renewable energy and how we need to fast track the production and funding into it, as renewable energy sources are much less volatile.
However, there is no real way to predict the future of energy prices, as there are many variables that can affect it, as shown by the unexpected crisis over the past year. So, keep an eye out and stay informed to be ahead of the curve.
If your business is struggling to cope with high energy prices and are unsure of what to do, get in touch with one of our energy experts to see how we can help.