The winter period is always a difficult time for businesses as the cold nights draw in and energy prices rise due to consumption.
During the winter and especially over the christmas period we are all looking at ways to save money and enjoy the festivities with family and friends. The additional costs of energy prices can create problems when it comes to having a lack of cash flow and surplus funds which allows us to buy those special gifts for loved ones.
Analysts at Cornwall Insight predicted that Britain’s wholesale power prices would rise from an average of £96.64 per megawatt-hour this year to £129/MWh next year, due to higher gas prices and the issues relating to the war in the Ukraine.
It is also forecast that electricity prices will stay elevated until at least 2030, and remain 60% higher than they were in 2021 before the global pandemic caused the markets to climb.
Analyst experts also believe that as more renewable energy connects to the grid, reducing the reliance on gas fired power plants, market prices will fall, but would still sit around the £80/MWh.
Many people in the UK are still feeling the pinch from rising energy prices
Tom Edwards, a senior modeller at Cornwall Insight spoke to the Guardian newspaper about renewable energy and how he believes that prices could remain higher for longer, he said;
“Rolling back our net zero ambitions and slowing our transition away from fossil fuels is likely to be a costly delay that will not only see us fall further behind in decarbonising the country but will leave consumers shouldering the prolonged burden of high prices,” He goes on to say.
“Without a resolute commitment to a greener and more sustainable future, achieving net zero emissions and pre-crisis energy bills becomes an increasingly elusive goal,”
Mr Edwards also makes some very interesting points when it comes to offshore wind farms. Cornwall forecasts that by 2030 offshore wind could make up 26% of the UK’s installed electricity capacity.
In the interview he also expresses his thoughts for the future and remains optimistic “We can see the country is travelling in the right direction towards a renewables-based electricity system. However, our estimates continue to show it is simply not fast enough to deliver on government targets,”
Another interview in the Guardian by energy correspondent, Jillian Ambrose focuses on the price of household energy bills. She believes that the prices could rise to an average of £1,900 in the coldest months and that is with the UK government's energy price cap in place.
The future focus looks towards renewable energy as a solution for bringing down prices
Jillian also looks closely at information received from Cornwall Insight and finds that the energy price cap is expected to rise from the £1,834-a-year level for a typical home to £1,898 when the cap is next updated for the months from January to March, adding to the burden of the cost of living crisis.
It’s quite clear that the vast majority of people have been affected by these price hikes over the past few years, and even though the market does seem to be stabilising a touch, the demands on businesses still plays a major factor.
Keeping premises warm during the winter period for both customers and staff has its challenges especially when money is hard to come by.
Those in the hospitality sector know too well how difficult it can be and will be hoping for a fruitful period, with Christmas being their busiest time of year, and giving them an opportunity to claw back lost revenue from the past few years.
Last year alone almost 4,600 hospitality firms closed their doors for the last time. Restaurants suffered a particularly damaging year, with the number of licensed restaurants shrinking by 7.8% over the year.
Nevertheless, the latest figures indicate a slowdown in closures in recent months amid stronger than expected consumer spending.
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