Energy crisis: Britain has competitive advantage as EU struggles with Russia dependency | City & Business | Finance
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Europe had already faced a winter of soaring gas prices however tensions with Russia, which supplies 40 percent of the continent’s demand, have seen these surge even higher. The UK meanwhile is less reliant, receiving around five to six percent of its energy from Russia, mostly in the form of liquefied natural gas (LNG). Nigel Pocklington, CEO of Good Energy, explained: “From an energy security point of view, as in is it coming in and will we keep the lights on, we’re much less dependent than most central European countries.” However, he explained being in a global marketplace meant Britain was still not insulated from the rising costs which have increased across the board.
Although the UK produces its own gas from North Sea production this does little to impact wholesale prices, a point recognised by Business Secretary Kwasi Kwarteng this week.
Mr Kwarteng has called for a diversification of Europe’s energy supplies away from Russia and in a recent Twitter thread championed the use of renewables to do this, calling them “cheaper than gas.”
Mr Pocklington, who heads one of the UK’s largest renewable energy firms, told Express.co.uk he agreed with Mr Kwarteng.
He explained: “Renewables offer, in the long term, energy self sufficiency and therefore energy security.”
“The UK has a natural advantage in that it is a windy and wet place… long daylight in the summer also means we’ve got reasonable solar generation as well.”
During the recent Storm Eunice day-ahead energy prices actually fell as wind produced nearly 50 percent of the UK’s electricity.
Renewable energy production has been growing rapidly in the UK, peaking at around 40 percent of UK power generation in 2020.
Since then there has been a slight dip in 2021 due to a global phenomenon of lower wind speeds however Mr Pocklington remains confident of the role the technology can play in the UK.
“We’ve had this oddly still year so wind has not performed as well as it might have done through the year as a whole but there are parts of the winter when the grid is 40 something percent generated by wind power and if that wasn’t there we’d have to put in gas.”
Mr Pocklington said he recognised that renewables got a “bad press” due to claims bills were being driven up by net zero however he argued the data said differently.
“The proportion of bills going to supporting renewable generation went from 20 percent under the previous price cap regime to eight percent on social and environmental costs this time because, frankly, the government was making money out of its commitment to buy renewable at a certain price point because we’re generating quite a lot at this higher price point and it was economically advantageous to us.”
Last month the government announced it would be increasing the frequency of its auctions for its renewable funding scheme to further boost the industry.
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The Contracts for Difference scheme provides 15 year contacts to low carbon electricity generators based on a competitive auction for the lowest bids.
According to the government the auction scheme has helped bring down the per unit cost of offshore wind by around 65 percent so far.
Reflecting on the situation in Ukraine Mr Kwarteng recently told the International Energy Agency: “Now is the time to reduce our exposure to Putin’s malign influence on gas markets by generating cheaper, cleaner power and home, and helping our European allies move away from Russian oil and gas.”
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