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• Of course, energy isn’t the only rising cost in the current inflation-led economy, which has caused most households to see a decline in disposable income since last winter.
• Compounding this, even if energy prices are lower this winter than last, some households will struggle to pay their energy bills because they are still carrying significant energy debts.
• This explains why many households are so exposed to changes in global gas prices.

What’s in your bill?

• This charge differs depending on the type of fuel you use, where you live and how you pay for your energy.
• The standing charge covers the costs to the energy companies of supplying your gas and electricity and supporting various government initiatives.
• Last winter, the government helped all households with a universal £400 payment under the Energy Support Bill.

An easily spooked market

• Russian pipeline gas continues to flow into southern Europe via Ukraine and Turkey, and Russia continues to supply liquefied natural gas (LNG) to Europe.
• This means the market could be easily spooked by any interruption in gas supply, causing a short-term price spike.

• Although these events had a minimal real impact on global supply, price spikes at the time show just how easily “spooked” the gas market is.
• The main issue is whether or not Asian, and particularly Chinese, demand for LNG will be higher than last year, reducing gas availability for Europe.
• China is still struggling economically post-COVID, which could push down energy demand from the world’s second-largest economy.

• In the winter months, long spells of cold, gloomy weather with no wind drive up gas demand to compensate for the lack of renewable generation.
• We also have to hope that France’s nuclear power stations stay online after a record number of outages last year.
• If not, heightened gas demand in continental Europe would mean the UK has to pay more to buy gas from Europe’s stores.

Michael Bradshaw receives funding from the UK Energy System Research Programme and EPSRC in relation to his role as Co-Director for the UK Energy Research Centre (UKERC). He also advises Government, Think-Tanks and Companies on energy matters.