A Case Of The Crises: Why The Cost-of-Living Crisis Will Not Be Solved Without The Energy Crisis

By Phil Thompson, CEO of Balance Power

This year we’ve seen energy prices increase astronomically, with the price cap in April formally raising prices by 54% as a result of volatile international energy markets exacerbated by recent geopolitical events, such as the war in Ukraine. This, against the backdrop of increasing inflation to the highest rate in 40 years, has meant that the UK has been engulfed by a cost-of-living crisis.

A long time coming

We’ve been walking a tightrope for a long time with respect to energy security. Prior to Russia invading Ukraine, the perfect storm was brewing for this crisis with post-covid energy demand up-ticking globally, a fire in the main power cable used to import electricity from France, and issues on the continent with the Nord Stream 2 pipeline.

People are becoming more and more aware of the impact that the lack of energy security has on everyday household bills.

Establishing energy security

To escape the global gas crunch, it is essential that the UK establishes a clean sovereign energy system. On the surface, this appears to be a daunting task, however, there are cheap and practical steps that can be put into immediate effect.

As the UK turns its attention away from fossil fuels to establish energy independence and reduce costs, we need more renewable energy projects rolled out to transition to a 100% clean energy grid. To achieve this, we need to relax the current rigorous planning policies, enabling more projects to be granted planning permission. In conjunction, energy storage is required to support this roll-out and ensure grid stability for periods of time when generation and demand do not match. Increasing the number of planning permission approvals will have the most meaningful and quickest impact on ensuring that we move away from volatile fossil fuels, and toward clean, supported energy. At low cost to consumers, this will also provide breathing space for those struggling under fuel poverty. 

Moreover, many people are supportive of measures to reduce energy prices, and of the transition towards net-zero, however individually there are some who still subscribe to the persistent ‘not in my back yard’ mentality. It must be accepted that the price to pay to reduce bills and avoid more households falling into fuel poverty, is to accept clean energy projects as a necessary part of our environment, at least for the time-being. While this may mean seeing a solar farm or wind turbine over our hedgerows from time to time, this is the reality of the situation – the impact on consumers and the planet of the ongoing crisis is now so pressing, that we no longer have a choice.

Resolve the energy crisis to alleviate the cost-of-living crisis

Whilst the energy crisis is not the only factor at play within the wider cost-of-living crisis, it is drastically impacting the lives of millions of people, some of whom could reportedly be paid to use less electricity to avoid winter blackouts, and others who are having to choose between ‘heat or eat’. These two crises are inextricably linked, and the UK will not be able to lower the cost-of-living, without solving the energy crisis first. This will require prioritising reducing the price of energy by establishing a clean, secure, and sovereign energy system.