The next steps for the UK’s energy suppliers
Just a month after the lockdown of March 2020, Ofgem – the UK energy industry’s regulator – wrote a stern letter to energy suppliers. This snappy little epistle was written to remind them of their obligations: to meet regulatory requirements and provide essential and emergency visits to premises where needed.
But how prepared are these energy suppliers now that the end of lockdown is approaching?
In this article, we’ll look at:
- How lockdown has affected home workers – and how (or whether) energy suppliers will support them when the UK reopens its doors.
- What forms of energy will be available to businesses, and how sustainable those practices will be.
A shock for home workers?
Research undertaken by Compare the Market indicates that homeowners are likely to see their energy costs shoot up this autumn. That’s because of increased usage during lockdown – and, of course, home working. It’s estimated that energy suppliers could end up charging circa £145.00 more than their customers expect.
This price rise is due to the cap on energy bills being lifted by Ofgem – the UK’s industry regulator. This cap changes once or twice a year in response to the changing costs associated with supplying gas and electricity to consumers.
With many home workers set to return to live working environments shortly, rising energy costs will hopefully become a distant memory soon. For those who have no choice but to work remotely, at least summer is coming – which will reduce their reliance on heating appliances.
Whether lockdown will remain in place – and what support will be available in the form of reduced tariffs for home workers – remains to be seen.
A trend toward renewable energy?
What should UK industries expect when the world reopens for business? It would appear that during lockdown, Europe began to rely less on electricity; instead, record highs in terms of renewable energy were observed.
Whether this trend will continue or not remains to be seen – as the depressed levels of electricity usage weren’t just due to demand, but also lower operating costs and restricted access to national grids to help cope with demand.
In China, coal shares have risen slightly – suggesting a return to older and more favoured methods once lockdown is over.
Whether tendencies toward sustainable forms of energy will continue remains to be seen.
Either way, energy suppliers must adapt to the changing needs of their customers in this new economic landscape.
In a nutshell…
It is hard to predict how energy suppliers will react once lockdown is over. This period of economic uncertainty seems to have rebalanced how consumers use electricity, gas, and water – a trend that needs to continue for the sake of the environment.
We adapted and coped during the crisis and so there’s no reason we won’t be able to again. In any case, everything hinges on whether lockdown will prevail or not. With other COVID variants lingering on the periphery, all bets are off.
All the energy suppliers can do is watch and wait, and so must the consumers and businesses they serve.