The war in the Middle East, like the war in Ukraine, is making businesses, communities and policymakers rethink again their relationship with Britain’s energy supplies. This comes as the OECD warned that the UK faces the biggest hit to growth of all G20 economies, which underlines how exposed the country is to the recent global energy shock.
By removing one fifth of global oil and gas supplies, the recent war in the Gulf has seen import bills rise. In the UK, it is imported gas that sets the price of electricity 85% of the time. In Spain it is 15%, in France, 7%, both depend less on fossil fuels to generate power. Spain, a renewables superpower has actually seen electricity prices decline in recent times.
Countries with more renewables and electrification are faring comparatively better, while the UK could be haunted by the spectre of natural-gas shocks for decades. The energy mix that Britain has chosen - no coal, a fast decline in nuclear and lots of intermittent renewables means it will be reliant on gas to guarantee firm electricity supplies for the years ahead.
It is why the Prime Minister, Sir Keir Starmer has now vowed to go ‘further and faster’ on renewable energy, after the International Energy Agency described this as the worst oil crisis ever.
This is the first energy shock in history where there are now superior alternatives to fossil fuels. Solar and wind underscored by battery storage are faster to deploy, locally developed and can be massive in scale. They were winning before the latest energy crisis. This latest episode of global energy insecurity should be a catalyst to galvanise real change.
This is the first energy shock in history where there are now superior alternatives to fossil fuels. Solar and wind underscored by battery storage are faster to deploy, locally developed and can be massive in scale. They were winning before the latest energy crisis. This latest episode of global energy insecurity should be a catalyst to galvanise real change.
After a shock, the reaction is typically to take more precautions against future shocks.
Sir Dieter Helm, Professor of Economic Policy, University of Oxford
Our industrial, technology and research clients tell us that access to energy is their biggest concern and we work hard to address this whilst anticipating adapting to emerging challenges, both local and global.
Andy Warrack, Technology Division Director, Hoare Lea
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