Saturday 3 September 2022

Energy Producers & Energy Suppliers

Observing the Twittersphere, there seems to be much confusion about energy companies and where we get our energy from.

Energy providers are the oil and gas exploration companies, whereas the energy suppliers are the electricity generating and gas distribution companies that buy gas or oil on the open market and generate electricity from that, selling it on to customers.


Many are saying we in the UK use only 4% of Russian gas in our supply, so we shouldn't be affected by the price rise. What they don't seem to realise is that all gas, including North Sea Gas, is sold on the international gas market. The fact that the world's largest producer of gas has been taken out of the market, either by a refusal to buy or a restriction on supply by the Russians, pushes up the price of all gas - a simple supply and demand problem.

They also don't seem to understand that even renewables are lumped into the government cap, meaning they are charged at the highest price, regardless of whether they're actually cheaper. The main reason for this is that it's impossible to separate renewables from fossil when the electricity goes into the same distribution network. It's a vagary of our supply system and Ofgem - the Office of Gas and Electricity Markets.  

The only way to get cheaper, renewable electricity is to use electricity you make through solar PV or solar thermal. Adding battery storage is also advised.

It was senseless for the government of the day, when the feed-in tariff was set, limiting domestic solar generation to 4kW. Fine, limit what you get paid, but don't put a limit on what you can generate for your own use.

As an aside, it seems that Insulate Britain was correct.


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