SKY-HIGH energy prices are set to plague UK consumers well into 2023, an energy expert has warned.
This warning comes from Dr Janet Liao, a Senior Lecturer in International Politics at the University of Dundee.
Dr Liao says that only a cessation in the conflict between Ukraine and Russia could trigger a notable drop in wholesale market prices that would ease the financial strain being experienced by millions of British households.
Dr Liao says that while the European Union’s efforts to move away from its dependency on Russian gas could contribute to a drop in prices in the long-term, historic underinvestment in renewable energy infrastructure is partly responsible for the high bills being experienced by millions of households.
Speaking today, she said: “The energy crisis facing us today is not new, but the two main triggers are quite unique.
“The first is the macroeconomics of energy transition.
“Experts believe that the record high gas prices in late 2021 were largely rooted in the energy underinvestment of recent years against the trend towards a greener future.
“With Europe increasing Liquified Natural Gas imports mainly from the US and Africa, the basic gas supplies could be ensured, but the prices won’t be cheap.
“The other is the geopolitics linked with Russia’s invasion to Ukraine, causing a severe shortage of gas supplies and soaring gas prices in Europe and UK, while undermining global energy markets greatly.”
UK households faced soaring energy bills throughout 2022, with the dramatic escalation prompted by the political fallout following Russia’s invasion of Ukraine.
With claims that the Kremlin has weaponised energy supplies, wholesale prices have spiked, prompting the UK Government to support UK households with its Energy Bill Support Scheme.
Ofgem estimates that without this financial intervention, the average UK energy bill would have risen to almost £4,300.
However, with this support for households set to end, there are fears that many more households face being plunged into fuel poverty.
“The issues around high energy prices will not be easily resolved even if the conflict in Ukraine was to end in the coming months,” warned Dr Liao.
“It would take time to repair the NordStream 1 pipeline and the EU is determined to move away from its reliance on Russian gas within the next few years, replacing it with supplies from elsewhere.
“It is also committed to speeding up its development of renewable energy sources, but while this could ensure a more reliable and cheaper energy supply in the years to come, it won’t happen in the immediate future.”
