When do smart prices get dumb?

By Globe and Mail


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My local utility just mailed me a notice informing me that theyÂ’ve installed a new smart meter at my home that will start monitoring and charging me for my electricity depending upon time of use.

The first thing I noticed about smart (i.e. off-peak) prices was how expensive dumb (i.e. peak) prices were. At 9.3 cents per kilowatt hour, power ainÂ’t cheap anymore on the grid Sir Adam Beck built from Niagara Falls.

Sure, if I wanted to do my laundry, run the dishwasher and charge my electric car (if I had one) at night, I could get all the juice I wanted at the very reasonable price of 4.4 cents per kilowatt hour. But I might just want to sleep and leave the laundry and dishes for another day and take the bus to work in the morning.

Toronto HydroÂ’s new smart-pricing initiative is married to OntarioÂ’s new Green Energy Act, which sanctions increased reliance on renewable energy. After gagging on the cost estimates for a couple more reactors, the province backed away from nuclear. And itÂ’s vowing to close down North AmericaÂ’s single largest source of CO2 emissions, the Nanticoke coal plant, within the next four years (mind you, the same Ontario government has promised this before).

TomorrowÂ’s power will come from renewables via a $7-billion deal with Samsung to install wind turbines in the Great Lakes, and to provide solar energy as well.

Many will applaud the addition of this clean and renewable source of power to the grid. Fewer will applaud the 19-cent-per-kilowatt-hour price tag thatÂ’ll come along with it.

As they say in stock brokerage, find a strong enough wind, and even pigs can fly. Pay 19 cents per kilowatt hour for power, and you can let the wind turn on the lights. But at that price, how long will you leave them on?

The larger the contribution wind power makes to tomorrow’s grid, the less power you will be able to afford to draw from it — the same way triple-digit oil prices, which will pull tomorrow’s oil supply out of Alberta’s tar sands, will translate into pump prices that’ll force millions of drivers right off the road.

It’s not how many megawatts of additional power new sources like wind add to the grid that counts. Rather, it’s the amount of power demand that a 19-cent–per-kilowatt-hour price will kill that’ll have a far greater effect.

In the end, OntarioÂ’s implicit strategy of future price rationing may be the best energy policy of them all. If power prices keep rising, demand will peak, and maybe then we wonÂ’t need to build any new power plants in the first place.

As for my new smart meter, what bears monitoring is how its benchmarks will change. With wind turbines taking over from coal plants, tomorrowÂ’s smart power prices will soon cost more than todayÂ’s dumb ones.

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Washington State's Electric Vehicle Rebate Program

Washington EV Rebate Program drives EV adoption with incentives, funding, and clean energy goals, cutting greenhouse gas emissions. Residents embrace electric vehicles as charging infrastructure expands, supporting sustainable transportation and state climate targets.

 

Key Points

Washington EV Rebate Program provides incentives to cut EV costs, accelerate adoption, and support clean energy targets.

✅ Over half of allocated funding already utilized statewide.

✅ Incentives lower upfront costs and spur EV demand.

✅ Charging infrastructure expansion remains a key priority.

 

Washington State has reached a significant milestone in its electric vehicle (EV) rebate program, with more than half of the allocated funding already utilized. This rapid uptake highlights the growing interest in electric vehicles as residents seek more sustainable transportation options. As the state continues to prioritize environmental initiatives, this development showcases both the successes and challenges of promoting electric vehicle adoption.

A Growing Demand for Electric Vehicles

The substantial drawdown of rebate funds indicates a robust demand for electric vehicles in Washington. As consumers become increasingly aware of the environmental benefits associated with EVs—such as reduced greenhouse gas emissions and improved air quality—more individuals are making the switch from traditional gasoline-powered vehicles. Additionally, rising fuel prices and advancements in EV technology, alongside zero-emission incentives are further incentivizing this shift.

Washington's rebate program, which offers financial incentives to residents who purchase or lease eligible electric vehicles, plays a critical role in making EVs more accessible. The program helps to lower the upfront costs associated with purchasing electric vehicles, and similar approaches like New Brunswick EV rebates illustrate how regional incentives can boost adoption, thus encouraging more drivers to consider these greener alternatives. As the state moves toward its goal of a more sustainable transportation system, the popularity of the rebate program is a promising sign.

The Impact of Funding Utilization

With over half of the rebate funding already used, the program's popularity raises questions about the sustainability of its financial support and the readiness of state power grids to accommodate rising EV demand. Originally designed to spur adoption and reduce barriers to entry for potential EV buyers, the rapid depletion of funds could lead to future challenges in maintaining the program’s momentum.

The Washington State Department of Ecology, which oversees the rebate program, will need to assess the current funding levels and consider future allocations to meet the ongoing demand. If the funds run dry, it could slow down the adoption of electric vehicles, potentially impacting the state’s broader climate goals. Ensuring a consistent flow of funding will be essential for keeping the program viable and continuing to promote EV usage.

Environmental Benefits and Climate Goals

The increasing adoption of electric vehicles aligns with Washington’s ambitious climate goals, including a commitment to reduce carbon emissions significantly by 2030. The state aims to transition to a clean energy economy and has set a target for all new vehicles sold by 2035 to be electric, and initiatives such as the hybrid-electric ferry upgrade demonstrate progress across the transportation sector. The success of the rebate program is a crucial step in achieving these objectives.

As more residents switch to EVs, the overall impact on air quality and carbon emissions can be profound. Electric vehicles produce zero tailpipe emissions, which contributes to improved air quality, particularly in urban areas that struggle with pollution. The transition to electric vehicles can also help to reduce dependence on fossil fuels, further enhancing the state’s sustainability efforts.

Challenges Ahead

While the current uptake of the rebate program is encouraging, there are challenges that need to be addressed. One significant issue is the availability of EV models. Although the market is expanding, not all consumers have equal access to a variety of electric vehicle options. Affordability remains a barrier for many potential buyers, especially in lower-income communities, but targeted supports like EV charger rebates in B.C. can ease costs for households. Ensuring that all residents can access EVs and the associated incentives is vital for equitable participation in the transition to electric mobility.

Additionally, there are concerns about charging infrastructure. For many potential EV owners, the lack of accessible charging stations can deter them from making the switch. Expanding charging networks, particularly in underserved areas, is essential for supporting the growing number of electric vehicles on the road, and B.C. EV charging expansion offers a regional model for scaling access.

Looking to the Future

As Washington continues to advance its electric vehicle initiatives, the success of the rebate program is a promising indication of changing consumer attitudes toward sustainable transportation. With more than half of the funding already used, the focus will need to shift to sustaining the program and ensuring that it meets the needs of all residents, while complementary incentives like home and workplace charging rebates can amplify its impact.

Ultimately, Washington’s commitment to electric vehicles is not just about rebates; it’s about fostering a comprehensive ecosystem that supports clean energy, infrastructure, and equitable access. By addressing these challenges head-on, the state can continue to lead the way in the transition to electric mobility, benefiting both the environment and its residents in the long run.

 

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Iceland Cryptocurrency mining uses so much energy, electricity may run out

Iceland Bitcoin Mining Energy Shortage highlights surging cryptocurrency and blockchain data center electricity demand, as hydroelectric and geothermal power strain to cool servers, stabilize grid, and meet rapid mining farm growth amid Arctic-friendly conditions.

 

Key Points

Crypto mining data centers in Iceland are outpacing renewable power, straining the grid and exceeding residential electricity demand.

✅ Hydroelectric and geothermal capacity nearing allocation limits

✅ Cooling-friendly climate draws energy-hungry mining farms

✅ Grid planning and regulation lag rapid data center growth

 

The value of bitcoin may have stumbled in recent months, but in Iceland it has known only one direction so far: upward. The stunning success of cryptocurrencies around the globe has had a more unexpected repercussion on the island of 340,000 people: It could soon result in an energy shortage in the middle of the Atlantic Ocean.

As Iceland has become one of the world's prime locations for energy-hungry cryptocurrency servers — something analysts describe as a 21st-century gold-rush equivalent — the industry’s electricity demands have skyrocketed, too. For the first time, they now exceed Icelanders’ own private energy consumption, and energy producers fear that they won’t be able to keep up with rising demand if Iceland continues to attract new companies bidding on the success of cryptocurrencies, a concern echoed by policy moves like Russia's proposed mining ban amid electricity deficits.

Companies have flooded Iceland with requests to open new data centers to “mine” cryptocurrencies in recent months, even as concerns mount that the country may have to slow down investments amid an increasingly stretched electricity generation capacity, a dynamic seen in BC Hydro's suspension of new crypto connections in Canada.

“There was a lot of talk about data centers in Iceland about five years ago, but it was a slow start,” Johann Snorri Sigurbergsson, a spokesman for Icelandic energy producer HS Orka, told The Washington Post. “But six months ago, interest suddenly began to spike. And over the last three months, we have received about one call per day from foreign companies interested in setting up projects here.”

“If all these projects are realized, we won’t have enough energy for it,” Sigurbergsson said.

Every cryptocurrency in the world relies on a “blockchain” platform, which is needed to trade with digital currencies. Tracking and verifying a transaction on such a platform is like solving a puzzle because networks are often decentralized, and there is no single authority in charge of monitoring payments. As a result, a transaction involves an immense number of mathematical calculations, which in turn occupy vast computer server capacity. And that requires a lot of electricity, as analyses of bitcoin's energy use indicate worldwide.

The bitcoin rush may have come as a surprise to locals in sleepy Icelandic towns that are suddenly bustling with cryptocurrency technicians, but there’s a simple explanation. “The economics of bitcoin mining mean that most miners need access to reliable and very cheap power on the order of 2 or 3 cents per kilowatt hour. As a result, a lot are located near sources of hydro power, where it’s cheap,” Sam Hartnett, an associate at the nonprofit energy research and consulting group Rocky Mountain Institute, told the Washington Post.

Top financial regulators briefed a Senate panel on Feb. 6 about their work with cryptocurrencies like Bitcoin, and the risks to potential investors. (Reuters)

Located in the middle of the Atlantic Ocean and famous for its hot springs and mighty rivers, Iceland produces about 80 percent of its energy in hydroelectric power stations, compared with about 6 percent in the United States, and innovations such as underwater kites illustrate novel ways to harness marine energy. That and the cold climate make it a perfect location for new data-mining centers filled with servers in danger of overheating.

Those conditions have attracted scores of foreign companies to the remote location, including Germany's Genesis Mining, which moved to Iceland about three years ago. More have followed suit since then or are in the process of moving. 

While some analysts are already sensing a possible new revenue source for the country that is so far mostly known abroad as a tourist haven and low-budget airline hub, others are more concerned by a phenomenon that has so far mostly alarmed analysts because of its possible financial unsustainability, alongside issues such as clean energy's dirty secret that complicate the picture. Some predictions have concluded that cryptocurrency computer operations may account for “all of the world’s energy by 2020” or may already account for the equivalent of Denmark's energy needs. Those predictions are probably too alarmist, though. 

Most analysts agree that the real energy-consumption figure is likely smaller, and several experts recently told the Washington Post that bitcoin — currently the world's biggest cryptocurrency — used no more than 0.14 percent of the world’s generated electricity, as of last December. Even though global consumption may not be as significant as some have claimed, it still presents a worrisome drain for a tiny country such as Iceland, where consumption suddenly began to spike with almost no warning — and continues to grow fast.

Some networks are considering or have already pushed through changes to their protocols, designed to reduce energy use. But implementing such changes for the leading currency, bitcoin, won't be as easy because it is inherently decentralized. The companies that provide the vast amounts of computing power needed for these transactions earn a small share, comparable to a processing fee or a reward.

They are the source of the Icelandic bitcoin miners’ income — a revenue source that many Icelanders are still not quite sure what to make of, especially if the lights start flickering.

 

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Ottawa hands N.L. $5.2 billion for troubled Muskrat Falls hydro project

Muskrat Falls funding deal delivers federal relief to Newfoundland and Labrador: Justin Trudeau outlines loan guarantees, transmission investment, Hibernia royalties, and $10-a-day child care to stabilize hydroelectric costs and curb electricity rate hikes.

 

Key Points

A $5.2b federal plan aiding NL hydro via loan guarantees, transmission funds, and Hibernia royalties to curb power rates.

✅ $1b for transmission and $1b in federal loan guarantees

✅ $3.2b via Hibernia royalty transfers through 2047

✅ Limits power rate hikes; adds $10-a-day child care in NL

 

Prime Minister Justin Trudeau was in Newfoundland and Labrador Wednesday to announce a $5.2-billion ratepayer protection plan to help the province cover the costs of a troubled hydroelectric project ahead of an expected federal election call.

Trudeau's visit to St. John's, N.L., wrapped up a two-day tour of Atlantic Canada that featured several major funding commitments, and he concluded his day in Newfoundland and Labrador by announcing the province will become the fourth to strike a deal with Ottawa for a $10-a-day child-care program.

As he addressed reporters, the prime minister was flanked by the six Liberal members of Parliament from the province. He alluded to the mismanagement that led the over-budget Muskrat Falls hydroelectric project to become what Liberal Premier Andrew Furey has called an "anchor around the collective souls" of the province.

"The pressures and challenges faced by Newfoundlanders and Labradorians for mistakes made in the past is something that Canadians all needed to step up on, and that's exactly what we did," Trudeau said.

Furey, who joined Trudeau for the two announcements and was effusive in his praise for the federal government, said the federal funding will help Newfoundland and Labrador avoid a spike in electricity rates as customers start paying for Muskrat Falls ahead of when the project begins generating power this November.

"Muskrat Falls has been the No. 1 issue facing Newfoundlanders and Labradorians now for well over a decade," Furey said, adding that he is regularly asked by people whether their electricity rates are going to double, a concern other provinces address through rate legislation in Ontario as well.

"We landed on a deal today that I think -- I know -- is a big deal for Newfoundland and Labrador and will finally get the muskrat off our back," he said.

The agreement-in-principle between the two governments includes a $1-billion investment from Ottawa in a transmission through Quebec portion of the project, as well as $1 billion in loan guarantees. The rest will come from annual transfers from Ottawa equivalent to its annual royalty gains from its share in the Hibernia offshore oilfield, which sits off the coast of St. John's. Those transfers are expected to add up to about $3.2 billion between now and 2047, when the oilfield is expected to run dry.

The money will help cover costs set to come due when the Labrador project comes online, preventing rate increases that would have been needed to pay the bills, and officials have discussed a lump-sum bill credit to help households. Though electricity rates in the province will still rise, to 14.7 cents per kilowatt hour from the current 12.5 cents, that's well below the projected 23 cents that officials had said would be needed to cover the project's costs.

Muskrat Falls was commissioned in 2012 at a cost of $7.4 billion, but its price tag has since ballooned to $13.1 billion. Ottawa previously backed the project with billions of dollars in loan guarantees, and in December, Trudeau announced he had appointed Serge Dupont, former deputy clerk of the Privy Council, to oversee rate mitigation talks with the province about financially restructuring the project.

Its looming impact on the provincial budget is set against an already grim financial situation: the province projected an $826-million deficit in its latest budget, and a recent financial update from the provincial energy corporation reflected pandemic impacts, coupled with $17.2 billion in net debt.

After visiting with children from a daycare centre in the College of the North Atlantic, Trudeau and Furey announced that in 2023, the average cost of regulated child care in the province for children under six would be cut to $10 a day from $25 a day. Trudeau said that within five years, almost 6,000 new daycare spaces would be created in the province.

"As part of the agreement, a new full-day, year-round pre-kindergarten program for four-year-olds will also start rolling out in 2023," the prime minister told reporters. "For parents, this agreement is huge."

Newfoundland and Labrador is the fourth province, after Prince Edward Island, Nova Scotia and British Columbia, to sign on to the federal government's child-care program.

 

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Almost 500-mile-long lightning bolt crossed three US states

Longest Lightning Flash Record confirmed by WMO: a 477.2-mile megaflash spanning Mississippi, Louisiana, and Texas, detected by satellite sensors, highlighting Great Plains supercell storms, lightning safety, and extreme weather monitoring advancements.

 

Key Points

It is the WMO-verified 477.2-mile megaflash across MS, LA, and TX, detected via satellites.

✅ Spanned 477.2 miles across Mississippi, Louisiana, and Texas

✅ Verified by WMO using space-based lightning detection

✅ Occurs in megaflash-prone regions like the U.S. Great Plains

 

An almost 500-mile long bolt of lightning that lit up the sky across three US states has set a new world record for longest flash, scientists have confirmed.

The lightning bolt, extended a total of 477.2 miles (768 km) and spread across Mississippi, Louisiana, and Texas.

The previous record was 440.6 miles (709 km) and recorded in Brazil in 2018.

Lightning rarely extends over 10 miles and usually lasts under a second, yet utilities plan for severe weather when building long-distance lines such as the TransWest Express transmission project to enhance reliability.

Another lightning flash recorded in 2020 - in Uruguay and Argentina - has also set a new record for duration at 17.1 seconds. The previous record was 16.7 seconds.

"These are extraordinary records from lightning flash events," Professor Randall Cerveny, the WMO's rapporteur of weather and climate extremes, said.

According to the WMO, both records took place in areas prone to intense storms that produce 'megaflashes', namely the Great Plains region of the United States and the La Plata basin of South America's southern cone, where utilities adapting to climate change is an increasing priority.

Professor Cerveny added that greater extremes are likely to exist and are likely to be recorded in the future thanks to advances in space-based lightning detection technology.

The WMO warned that lightning was a hazard and urged people in both regions and around the world to take caution during storms, which can lead to extensive disruptions like the Tennessee power outages reported after severe weather.

"These extremely large and long-duration lightning events were not isolated but happened during active thunderstorms," lightning specialist Ron Holle said in a WMO statement.

"Any time there is thunder heard, it is time to reach a lightning-safe place".

Previously accepted WMO 'lightning extremes' include a 1975 incident in which 21 people were killed by a single flash of a lightning as they huddled inside a tent in Zimbabwe, and modern events show how dangerous weather can also cut electricity for days, as with the Hong Kong typhoon outages that affected families.

In another incident, 469 people were killed when lightning struck the Egyptian town of Dronka in 1994, causing burning oil to flood the town, and major incidents can also disrupt infrastructure, as seen during the LA power outage following a substation fire.

The WMO notes that the only lightning-safe locations are "substantial" buildings with wiring and plumbing, and dedicated lightning protection training helps reinforce these guidelines, rather than structures such as bus stops or those found at beaches.

Fully enclosed metal-topped vehicles are also considered reliably safe, and regional storm safety tips offer additional guidance.

 

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Trump unveils landmark rewrite of NEPA rules

Trump NEPA Overhaul streamlines environmental reviews, tightening 'reasonably foreseeable' effects, curbing cumulative impacts, codifying CEQ greenhouse gas guidance, expediting permits for pipelines, highways, and wind projects with two-year EIS limits and one lead agency.

 

Key Points

Trump NEPA Overhaul streamlines reviews, trims cumulative impacts, keeps GHG analysis for foreseeable effects.

✅ Limits cumulative and indirect impacts; emphasizes foreseeable effects

✅ Caps EIS at two years; one-year environmental assessments

✅ One lead agency; narrower NEPA triggers for low federal funding

 

President Trump has announced plans for overhauling rules surrounding the nation’s bedrock environmental law, and administration officials refuted claims they were downplaying greenhouse gas emissions, as the administration also pursues replacement power plant rules in related areas.

The president, during remarks at the White House with supporters and Cabinet officials, said he wanted to fix the nation’s “regulatory nightmare” through new guidelines for implementing the National Environmental Policy Act.

“America is a nation of builders,” he said. But it takes too long to get a permit, and that’s “big government at its absolute worst.”

The president said, “We’re maintaining America’s world-class standards of environmental protection.” He added, “We’re going to have very strong regulation, but it’s going to go very quickly.”

NEPA says the federal government must consider alternatives to major projects like oil pipelines, highways and bridges that could inflict environmental harm. The law also gives communities input.

The Council on Environmental Quality has not updated the implementing rules in decades, and both energy companies and environmentalists want them reworked, even as some industry groups warned against rushing electricity pricing changes under related policy debates.

But they patently disagree on how to change the rules.

A central fight surrounds whether the government considers climate change concerns when analyzing a project.

Environmentalists want agencies to look more at “cumulative” or “indirect” impacts of projects. The Trump plan shuts the door on that.

“Analysis of cumulative effects is not required,” the plan states, adding that CEQ “proposes to make amendments to simplify the definition of effects by consolidating the definition into a single paragraph.”

CEQ Chairwoman Mary Neumayr told reporters during a conference call that definitions in the current rules were the “subject of confusion.”

The proposed changes, she said, do in fact eliminate the terms “cumulative” and “indirect,” in favor of more simplified language.

Effects must be “reasonably foreseeable” and require a “reasonably close causal relationship” to the proposed action, she added. “It does not exclude considerations of greenhouse gas emissions,” she said, pointing to parallel EPA proposals for new pollution limits on coal and gas power plants as context.

Last summer, CEQ issued proposed guidance on greenhouse gas reviews in project permitting. The nonbinding document gave agencies broad authority when considering emissions (Greenwire, June 21, 2019).

Environmentalists scoffed and said the proposed guidance failed to incorporate the latest climate science and look at how projects could be more resilient in the face of severe weather and sea-level rise.

The proposed NEPA rules released today include provisions to codify the proposed guidance, which has also been years in the making.

Other provisions

Senior administration officials sought to downplay the effect of the proposed NEPA rules by noting the underlying statute will remain the same.

“If it required NEPA yesterday, it will require NEPA under the new proposal,” an official said when asked how the changes might apply to pipelines like Keystone XL.

And yet the proposed changes could alter the “threshold consideration” that triggers NEPA review. The proposal would exclude projects with minimal federal funding or “participation.”

The Trump plan also proposes restricting an environmental impact statement to two years and an environmental assessment to one.

Neumayr said the average EIS takes 4 ½ years and in some cases longer. Democrats have disputed those timelines. Further, just 1% of all federal actions require an EIS, they argue.

The proposal would also require one agency to take the lead on permitting and require agency officials to “timely resolve disputes that may result in delays.”

In general, the plan calls for environmental documents to be “concise” and “serve their purpose of informing decision makers.”

Both Interior Secretary David Bernhardt and EPA Administrator Andrew Wheeler, whose agency moved to rewrite coal power plant wastewater limits in separate actions, were at the White House for the announcement.

Reaction

An onslaught of critics have said changes to NEPA rules could be the administration’s most far-reaching environmental rollback, and state attorneys general have mounted a legal challenge to related energy actions as well.

The League of Conservation Voters declared the administration was again trying to “sell out the health and well-being of our children and families to corporate polluters.”

On Capitol Hill, House Speaker Nancy Pelosi (D-Calif.) said during a news conference the administration would “no longer enforce NEPA.”

“This means more polluters will be right there, next to the water supply of our children,” she said. “That’s a public health issue. Their denial of climate, they are going to not use the climate issue as anything to do with environmental decisionmaking.”

Sen. Sheldon Whitehouse (D-R.I.) echoed the sentiment, saying he didn’t need any more proof that the fossil fuel industry had hardwired the Trump administration “but we got it anyway.”

Energy companies, including firms focused on renewable energy development, are welcoming the “clarity” of the proposed NEPA rules, even as debates continue over a clean electricity standard in federal climate policy.

“The lack of clarity in the existing NEPA regulations has led courts to fill the gaps, spurring costly litigation across the sector, and has led to unclear expectations, which has caused significant and unnecessary delays for infrastructure projects across the country,” the Interstate Natural Gas Association of America said in a statement.

Last night, the American Wind Energy Association said NEPA rules have caused “unreasonable and unnecessary costs and long project delays” for land-based and offshore wind energy and transmission development.

Trump has famously attacked the wind energy industry for decades, dating back to his opposition to a Scottish wind turbine near his golf course.

The president today said he won’t stop until “gleaming new infrastructure has made America the envy of the world again.”

When asked whether he thought climate change was a “hoax,” as he once tweeted, he said no. “Nothing’s a hoax about that,” he said.

The president said there’s a book about climate he’s planning to read. He said, “It’s a very serious subject.”

 

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Britain Prepares for High Winter Heating and Electricity Costs

UK Energy Price Cap drives household electricity bills and gas prices, as Ofgem adjusts unit rates amid natural gas shortages, Russia-Ukraine disruptions, inflation, recession risks, and limited storage; government support offers only short-term relief.

 

Key Points

The UK Energy Price Cap limits per-unit gas and electricity charges set by suppliers and adjusted by Ofgem.

✅ Reflects wholesale natural gas costs; varies quarterly

✅ Protects consumers from sudden electricity and heating bill spikes

✅ Does not cap total annual spend; usage still determines bills

 

The government organization that controls the cost of energy in Great Britain recently increased what is known as a price cap on household energy bills. The price cap is the highest amount that gas suppliers can charge for a unit of energy.

The new, higher cost has people concerned that they may not be able to pay for their gas and electricity this winter. Some might pay as much as $4,188 for energy next year. Earlier this year, the price cap was at $2,320, and a 16% decrease in bills is anticipated in April.

Why such a change?

Oil and gas prices around the world have been increasing since 2021 as economies started up again after the coronavirus pandemic. More business activities required more fuel.

Then, Russia invaded Ukraine in late February, creating a new energy crisis. Russia limited the amount of natural gas it sent to European countries that needed it to power factories, produce electricity and keep homes warm.

Some energy companies are charging more because they are worried that Russia might completely stop sending gas to European countries. And in Britain, prices are up because the country does not produce much gas or have a good way to store it. As a result, Britain must purchase gas often in a market where prices are high, and ministers have discussed ending the gas-electricity price link to ease bills.

Citibank, a U.S. financial company, believes the higher energy prices will cause inflation in Britain to reach 18 percent in 2023, while EU energy inflation has also been driven higher by energy costs this year. And the Bank of England says an economic slowdown known as a recession will start later this year.

Public health and private aid organizations worry that high energy prices will cause a “catastrophe” as Britons choose between keeping their homes warm and eating enough food.

What can government do?

As prices rise, the British government plans to give people between $450 and $1,400 to help pay for energy costs, while some British MPs push to further restrict the price charged for gas and electricity. But the help is seen by many as not enough.

If the government approves more money for fuel, it will probably not come until September, as the energy security bill moves toward becoming law. That is the time the Conservative Party will select a new leader to replace Prime Minister Boris Johnson.

The Labour Party says the government should increase the amount it provides for people to pay for fuel by raising taxes on energy companies. However, the two politicians who are trying to become the next Prime Minister do not seem to support that idea.

Giovanna Speciale leads an organization called the Southeast London Community Energy group. It helps people pay their bills. She said the money will help but it is only a short-term solution to a bigger problem with Britain’s energy system. Because the system is privately run, she said, “there’s very little that the government can do to intervene in this.”

Other European countries are seeing higher energy costs, but not as high, and at the EU level, gas price cap strategies have been outlined to tackle volatility. In France, gas prices are capped at 2021 levels. In Germany, prices are up by 38 percent since last year. However, the government is reducing some taxes, which will make it easier for the average person to buy gas. In Italy, prices are going up, but the government recently approved over $8 billion to help people pay their energy bills.
 

 

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