Thursday 21 February 2013

OFGEM confirm big energy price increases over next couple of years

Extensively publicised yesterday (20th Feb), the outgoing OFGEM chief Alistair Buchanan has warned that the UK's existing fleet of power stations are right at the start of a process for decommissioning dirty coal powered power stations.
The two viable alternatives Gas and Nuclear, (renewables have been conveniently ignored), have their own set of problems. Gas is no longer the plentiful and cheap fuel of a few years ago, and the UK is now forced to keep negotiating to purchase Gas from other nations who still have a supply available for sale. The purchase cost of Gas will rise extremely rapidly over the next few years, meaning a knock on effect that electricity costs are going to rise rapidly.
Government Nuclear subsidies got pulled in 2010, but these are set to be put back in place again, as the original Nuclear operating companies, such as EDF, shelved plans for projects such as Hinckley Point after these subsidies were withdrawn. The Government have now taken a U turn and have re-instated those Nuclear subsidies in an attempt to get 'low carbon' generation kickstarted. Obviously building a Nuclear power station takes some 5 years or more, so that option is some time off.
Do it yourself!
As we will have noticed, Government tax breaks, subsidies and concessions have been continuing for Oil and Gas generation, though have been dramatically cut for Renewable technologies, however on a small scale you are possibly able to help yourself against these huge rises.
Essential will be insulating your house and business as much as possible. The easy one is more loft insulation, still being sold very inexpensively at DIY outlets. Even if you have loft insulation, putting more on top will make the house less likely to lose heat through the roof.
Solar PV systems have suddenly turned around almost overnight from being investors 'money making machines' to the saviour to avoid huge power bills. Currently, the Feed in Tariff is still going strong and with a domestic 4kWp PV system costing an all time low of around £5000, from Rudge Renewables if you have the space available, its a no brainer to use a Solar PV system in conjunction with energy saving measures to reduce your power bills right down to a fraction of what you are paying now.
The emerging Green Deal could help immensly to finance all sorts of energy saving solutions on the home if money is tight. However, with massive 7.5% interest and admin rates, if you can afford to pay for it yourself or obtain conventional lower interest finance, you will be able to be more flexible without having to endure Government backed assessors surveying your home. Either way, carrying out energy saving measures will save you a big chunk of money in the couple of years to come.
Independant Newspaper OFGEM report
Scottish Herald report
BBC News report
Energy Savings Trust for energy savings guidance