“The impact of the energy price crisis on households is ongoing and severe, particularly in the context of other considerable inflationary pressures, and is likely to cause an unacceptable rise in fuel poverty and hardship this winter. “

Energy pricing and the future of the energy market

Money Saving Expert, Martin Lewis has issued a plea to Tory hopeful PMs, Liz Truss and Rishi Sunak to urgently meet with Boris Johnson over the 77% predicted energy price cap set for October.

This latest development in the energy crisis that will hit homes and businesses across the UK will make heating their homes unaffordable for millions.

On Wednesday The Orkney News published a letter by Robert Leslie about the situation in Orkney: Letters: ‘The UK energy system is broken’

Commenting on Twitter on this latest news Robert Leslie said:

“This scale of increase is unsustainable and will push a massive number of additional Orkney households into #fuelpoverty – we need intervention now and a change to the broken UK energy system.”

Whilst the average for bills in the UK will see an additional £3,500 in October- for islanders in Orkney and Shetland, already paying more just to heat their homes and businesses, the rise will be even worse.

Robert Leslie said:

“If folk in Orkney already have annual bills of around £3000 after the 54% hike in April then a 77% hike will push them beyond £5000 if their usage stays the same. Given the carbon content of Orkney’s electricity this is an injustice and needs urgent action.”

Every year Orkney produces over 100% of its own energy needs through renewables – mostly wind. Scotland too is a net exporter of energy. And yet we pay the highest tariffs buying back that same energy to heat our homes and businesses.

The price hike for electricity in Orkney will be disastrous for islanders already struggling with rising food and fuel prices.

“Between July 2021 and May 2022, 29 energy suppliers in Great Britain collapsed. Through the Supplier of Last Resort (SoLR) process, since July 2021, 2.4 million customers were moved from 28 failed energy companies to new suppliers.”

Energy pricing and the future of the energy market

Welfare Scotland is extremely concerned that the price hike is going to significantly affect those on fixed and low incomes including older people, disabled people and those who are chronically ill.

Darren Banks, Welfare Scotland Board Member, Edinburgh, said:

“In France, the government capped energy price increases at 4% and it is expected that this measure will be extended into next year. This decisive action is precisely what the UK Government should have taken in order to keep people safe.

“A combination of per unit price increases and the unprecedented hikes in the standing charge will leave people in the cold and dark this winter. It isn’t an overstatement to say that those who already struggle will be put in danger and are at risk of severe harm or freezing to death.

“The highest price this winter will be paid by those with the least.

“The UK government and the UK’s ever-somnolent energy regulator OFGEM have been asleep at the wheel and what little support offered thus-far has been nowhere near enough to make any meaningful difference.

“We join a chorus of other non-profit organisations calling on the UK government to introduce the measures detailed in Commons Energy and Industrial Strategy Committee’s report published on Tuesday 26th June.

“Failure to act swiftly and decisively will result in the darkest of winters in living memory for many.”

The HoC report is damning of Ofgem Britain’s energy regulator. It says that :

” Ofgem has proved incompetent as the regulatory authority of the energy retail market over the last decade. It allowed suppliers to enter the market without ensuring they had access to sufficient capital, acceptable business plans, and were run by individuals with relevant expertise.”

Energy pricing and the future of the energy market

On top of all of this , Energy giant Shell has announced profits of £9.5billion ($11.5billion) in just 3 months. 

Friends of the Earth Scotland’s Oil and Gas Campaigner Freya Aitchison said:

“This announcement of yet another obscene profit for Shell is a clear sign that our broken energy system is completely unfit for purpose.

“Rising energy prices are a key driver of the cost of living crisis that has plunged millions of people in the UK into fuel poverty, yet bosses and shareholders at Shell are getting even richer by exploiting one of our most basic needs.

“Shell is also worsening climate breakdown and extreme weather by continuing to invest and lock us into new oil and gas projects for decades to come. We must phase out fossil fuels and speed up the transition to renewables in order to overhaul our energy system and ensure that everyone has access to affordable and clean renewable energy.”

The environmental campaigners say that  the oil and gas industry has made over $52 trillion in profit over the last 50 years.

Click on this link to access the House of Commons Report: Energy pricing and the future of the energy market

Fiona Grahame