Page 6 - ISQ UK_October 2021
P. 6


           When Rubber Hits the Road

           Jeremy Batstone-Carr, European Strategy Team, Raymond James

           The United Kingdom is facing an energy crisis. This goes well   across Europe too. This has resulted in the collapse of some
           beyond the terrible optics associated with petrol stations   energy providers and forced activities from steelmaking to manu-
                                                                facturing to shutdown during peak hours to avoid having to pay
           running out of fuel. The country has recently experienced a   excessive energy fees. The situation has been exacerbated, argue
           400% spike in natural gas prices and a 250% increase in the   some critics, by the U.K.’s drive towards a “net-zero” carbon
           price of electricity. The subject was touched upon, albeit   emissions policy. Over the past 50 years, the U.K. has reduced its
           obliquely, by Bank of England Governor, Mr Andrew Bailey,   dependency on coal power and become increasingly dependent
           in the wake of the conclusion of the most recent Mone-  on gas as its primary source of electricity generation, most of it
                                                                imported from Europe. Furthermore, heavy investment in renew-
           tary Policy Committee meeting. “The shocks that we are   ables over the past ten years has boosted wind output which now
           seeing are restricting supply in the economy relative to the   contributes around 24% of total power generation.
           recovery in demand. This is important because monetary   At this moment in time the global economy, not just that of the
           policy will not increase the supply of semiconductor chips,   U.K., faces some very testing economic challenges. The squeeze
           it will not increase the amount of wind, and nor will it pro-  on the availability of energy supply is contributing to an increase
           duce more HGV drivers”.                              in inflationary pressure, exacerbated by the fracturing of supply
                                                                lines across a wide range of goods and services. Yet the tempta-
           It is certainly true that the domestic energy generating industry   tion to blame everything on the after-effects of the Covid-19 crisis
           has  been hit  by a  confluence  of unforeseen factors serving to   really ranks alongside “the dog ate my homework” in terms of
           throttle-back supply, including extremely low wind levels, a fire   credibility. After all, global GDP fell by just 3.3% last year, poor but
           at an important France – U.K. electricity interconnector, nuclear   hardly catastrophic.
           power outages and a gas shortfall sweeping not just Britain but

   1   2   3   4   5   6   7   8   9   10   11