The energy crisis: Looking ahead
Whilst Ofgem recently lowered the Energy Price Cap, the impact of the energy crisis continues to affect millions of households. Our CEO Monica Collings recently spoke to City A.M. about So Energy’s focus on how energy companies must rebuild trust, from the ground up.
Over the last couple of years, we’ve witnessed a chaotic time in the energy industry, with wholesale prices skyrocketing as a result of the war in Ukraine, and numerous suppliers folding due to poor hedging strategies. This has of course left customers feeling concerned that they are taking on the financial burden.
As a business we’ve called for more help for the most vulnerable customers as we approach winter, ensuring there is more support for people on means tested benefits and on lower incomes. Monica put it aptly by stating we intended to “punch above our weight” when it came to matters such as these. We wrote more about our proposal for a social tariff here, outlining how a shift in the industry would work.
While talking to City A.M, Monica also discussed the difficulties the business had previously faced at the height of the energy crisis. We’ve solidified our position in the market since then, and are excited to drive positive change as part of the ESB family. It’s important we remind our customers that their supply is safe with So Energy, and they can continue to rely on us for transparency and support.
Why are we in this position?
There’s countless reasons as to why there’s an energy crisis and bills are still high. Here’s just a few that have led us to this point.
After the height of the pandemic, there was an increased demand for gas supplies from countries that experienced a gruelling winter. Industries like travel and hospitality boomed, and demand outweighed supply, thus prices surged.
The effects of war continue to be extensive, with Russia’s invasion of Ukraine driving up gas prices. Despite the UK not heavily relying on Russia for gas, this impacted the global markets, which in turn affected the UK. Customers saw large increases in their bills as a consequence of this.
The UK heavily relies on gas to facilitate cooking and heating. However, we have one of the lowest gas storage capabilities in Europe. As the crisis waged on, we were left particularly vulnerable to market fluctuations.
What does the future look like?
While it’s true that we’re not quite out of the woods, it’s important to acknowledge that things have started to improve. From the Price Cap lowering reflecting lower costs in wholesale energy costs, to exploring new sources of gas- the UK will have to adapt to an ever-changing landscape. This hopefully means energy prices will eventually stabilise as governments are forced to act.
We appreciate it’s still a hard time for our customers, but hope we can continue to shed light on what can be seen as a complicated set of events. If you’re currently struggling to pay your bills, check out our blog to see if there is anything we can do to help.
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