Energy UK Says Focusing on 'Getting Through Next Few Months' as Gas Prices Soar

LONDON (Sputnik) – UK customers and suppliers are bracing for a tough winter as rising gas prices continue to cause turmoil in the sector, forcing a dozen companies to close their doors and leading to higher household energy costs, Energy UK told Sputnik on Wednesday.

"It’s going to be a difficult winter for customers and suppliers so the immediate priority will be getting through the next few months," a spokesperson for the trade association for the energy industry said.

The current crisis has underlined the need to expand the country’s own sources of low carbon power in order to reduce the UK’s dependence on imported gas and exposure to volatile fossil fuel prices, the spokesperson said.

"We also need a nationwide programme to make all our homes energy efficient, as the most effective way to reduce customer bills permanently over the long term," she added.

The UK retail energy sector was plunged into crisis last month after it became clear that large number of small suppliers were unable to pass on to their customers the wholesale gas and electricity prices.

As natural gas prices began trading at more than three times higher than they were at the beginning of 2021 due to global competition for supplies, the UK energy regulator began helping firms to allocate orphaned customers through the so-called Supplier of Last Resort system, which moves them on to new providers.

"The current arrangement (Supplier of Last Resort) has worked so far but it will depend on the scale of further market exits by suppliers," Energy UK said, adding that there is also a Special Administration Regime that can be triggered in the event of a big supplier exiting market.

After claiming that they have been warning about the "fragility" of the retail sector for some time, the energy trade association said that once current difficulties are over, "the Government and regulator need to look at what the future retail sector should look like and what it needs to deliver."

"Suppliers will have a pivotal role in helping and supporting customers through the changes needed to help reach Net Zero and it’s going to very difficult for them to do that and invest in it when very few suppliers are making any profit at all," Energy UK stressed.

Speaking at the ruling Conservative Party conference early this week, Prime Minister Boris Johnson pledged to eliminate fossil fuels from the UK electricity generation by 2035 as part of the country’s commitment to achieve net zero emissions by 2050.

A YouGov survey conducted few hours after Johnson’s announcement showed, however, that 41% of people in the UK thought the prime minister’s plan was unrealistic compared to 31% that said it can be achieved and 26% who did not know.