Good pick up Why are prices rising? According to Ofgem, the...

Good pick up

Why are prices rising? According to Ofgem, the price rise is down to wholesale gas prices, which have surged by over 50% since the regulator last updated the price cap six months ago – hitting record highs due to increased demand for energy as lockdown measures have eased across the world.

Interestingly here's a comment from 100% renewable provider Good energy which also echos Octopus energy, another 100% renewable energy company (20% owned by ORG)

“Today’s news highlights the urgent need to reduce the UK’s dependency on fossil gas,” said Simon Shaw, regulatory affairs officer at Good Energy. “With 85% of UK homes still connected to the gas grid, it is beyond time to have an honest conversation about our reliance on fossil fuels. We need to protect consumers from future volatility, whilst also working towards the rapid decarbonisation of our homes and businesses.”

meanwhile British Gas has has previously stated that the price cap creates challenges for it as it continues to see its profits fall.

“The price cap is the single most effective intervention for energy customers,” said Greg Jackson, CEO and founder of Octopus Energy. “It’s like the minimum wage - it guarantees a level of decency for everyone, but of course they can still do better if they shop around.“Global gas prices have tripled in the last year, so without the price cap, energy prices would be hundreds of pounds higher than they are now. Never has the cap been more vital and it should be made permanent.”

interestingly Greg Jackson wants to the the price cap dropped.

Jackson says the higher price cap is not the only regulatory barrier to investment in renewable energy: “Twenty-three per cent of the typical electricity bill is tax – it's environmental and social levies. Companies that don't get subsidies on their generation shouldn’t pay the taxes for the levies, given that the levies are there to subsidise renewable generation. We increasingly need to open up energy generation to investors who really do want to build, on a colossal scale, the generation that will enable the system to go clean.”

Anyway, thought it was interesting