Martin Lewis debunks £2,500 energy price cap myths
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A new report found that this year, the UK has exported record energy supplies to Europe, as the continent is gripped by a major gas supply crisis. Over the past year, the European Union’s supply of gas has been at risk, as Russia began squeezing gas flows in retaliation to Western sanctions over its invasion of Ukraine. The bloc was heavily dependent on Russian gas exports, and since then has been scrambling to find other energy suppliers, particularly as Vladimir Putin has threatened to completely cut off gas flows this winter. A new study found that Britain has been stepping in to help the bloc, as nearly a tenth of the electricity generated in the UK this spring was sent abroad.
The report found between April and June this year, eight percent of the electricity generated in the UK, accounting for over five terawatt-hours, was sent to European countries through undersea power cables.
According to estimates from Imperial College London in a report commissioned by power generator Drax, these exports were worth about £1.5billion and helped reduce the blow faced by the EU as a result of lower Russian gas supplies.
However, this growth in exports also reveals an increased competition for power supplies, which could affect the UK this winter, particularly as the National Grid said that it was looking to benefit from energy imports from Europe this winter.
A July forecast revealed the National Grid would need plenty of imported power supplies this winter, and assumed that Britain can rely on power from Europe – just like in previous years.
Iain Staffell, of Imperial College London, said: “Britain has played an important role in helping to keep the lights on across Europe amid the deepening energy crisis which is being weaponized by Russia against our nearest neighbours.
“With Europe now facing long-term security of supply problems, there could be an economic argument for Britain to step up investment in power production in the years ahead to build an even bigger trade surplus, and protect our nation from damaging energy shortages.”
Aside from Putin’s manipulation of Russian gas flows, Europe has also been reeling from reduced outputs from France’s nuclear reactors, have of which have been forced offline due to maintenance work and corrosion problems.
As a result, EDF revealed that nuclear power generation, which usually produces around 70 percent of France’s electricity, plummeted in August by nearly 40 percent year-on-year.
This has seen France become a net importer of electricity in the first half of 2022, despite usually exporting cheap nuclear power to the UK via the three cables which trade electricity across the English Channel.
As a result, the UK has ended up becoming an “energy bridge” to Europe, by importing gas in LNG form from around the world using its three terminals, and exporting both gas and electricity to Europe.
The UK is connected to the European continent through eight undersea cables, that link the UK’s power grid to France, Ireland, Norway and Belgium. These cables help balance of intermittent energy supplies from wind and solar power, by importing when winds are not blowing, and exporting during times of high wind speeds.
While the National Grid has said that it will rely on Europe during “tight” times in the winter, experts have warned that Vladimir Putin completely cuts off gas supplies, the UK would not be able to rely on that happening.
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Britain’s record energy exports to Europe come as household gas and electricity bills have reached unprecedented levels, with Ofgem set to raise the price cap on household energy bills from £1,971 to an unprecedented £2,500 tomorrow (October 1st.)
Before Prime Minister Liz Truss announced a freeze on energy bills at £2,500, Ofgem had raise the price cap to £3,549 a year, with many experts warning that bills could soar up £5,000 by next summer.
While Ms Truss’ intervention lowers energy bills by about £1,000, these bills increase will still bite families hard, particularly as the new tariffs are nearly double the £1,271 average bill a year ago.
This increase is equivalent to nearly a third of how much a household of two adults and children, living on a very low income, spends on food over the course of a year, according to the National Energy Action.
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