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UK Energy Prices and trends 2014 released

Written by at 16:03

The government’s trends and prices statistical release for Q1 2013 to Q1 2014 has been made public. Released quarterly, it features information about consumption, generation, renewables and energy prices.

Over the past year it’s been common knowledge that suppliers have put up prices, customer complaints have increased, the government seems to have a vendetta against wind farms, and fracking seems like it’s happening no matter what.

Included in the report aren’t the consequences or social aspects of the energy market, it’s the cold hard stats and surprisingly, they’re not all terrible.

Energy price and consumption changes

The UK has seen average energy prices increase over the year, electricity by 5.9% and gas by 4.8% in real terms, which is a given really. The actual price UK homes pay for energy however has only increased by 4.5%, although 3.1% of that rise was between Q4 2013 and Q1 2014 – when many suppliers announced price rises (followed by smaller decreases).

This lower increase in amount actually paid could be due to more people moving over to fixed prices contracts before the price rise, or that the majority of people are on such tariffs already. We can probably expect to see this figure increase next year as people’s fixed price contracts come to an end and are forced into paying higher prices.

The report also highlights that energy consumption fell by 10.7% on last year’s figures. A large majority of this was due to temperature differences from last year leading to people spending less time with the heating on. With that accounted for however consumption was still down 1.8%, indicating either people are becoming more conscious of turning lights and appliances, or more people are investing in energy efficiency, or a combination of the two.

Fossil fuels and traditional generation

As a reflection of the closure and adaption of coal plants, coal production has decreased by 28% and reached a record low level in January this year. This is all accounted for as it’s been part of the government’s long-term energy strategy to get rid of a large number of old, inefficient coal fired plants. However, there’s still a growing gap between generation and consumption, which has a huge potential to drive our energy prices up.

Another big change was bioenergy generation up to 11.1%, which was largely due to the partial conversion of the previously coal-fired power plant at Drax into a biomass plant.

That being said, coal still provides 41.6% of electricity generated, with gas at 23.2% and nuclear sitting at 19.2%, demonstrating a huge reliance is still placed on this fuel source. It’s not all bad news however as electricity generation from low carbon sources by major power producers was up 6 points to 35.3%.

Renewable energy

In terms of total renewable contribution to electricity production, there’s been a small but significant rise from 11.3% last year to 14.8%. Mainly from growing wind and bioenergy capacity, helped by recent weather conditions.

Other renewable also saw huge growth last year. Wind and hydro production increased by 55%, offshore wind was up 30% and onshore wind, despite the government’s apparent hatred of it, was up 58%. Hydro’s output also doubled, demonstrating significant advances in technology and development.

Green Lightbulb

An increased contribution from renewables is pretty much the only long term energy policy option available, at least until we manage to take hold of nuclear fusion as an energy source, as fossil fuels will run out. Unfortunately, many renewable techniques are not as cost effective as throwing a load of coal into a furnace and using it to generate electricity, so for now, this may cause our electricity prices to go up.

The opposite side of the coin is that coal is a dirty source, damaging to our atmosphere, accelerating climate change and causing wide-spread health problems. Coal plants are also more effective than some methods such as wind, that rely on there being actual windy conditions to generate, if there’s higher demand in the grid, plants can always up their contribution by burning more coal.

How will this affect my energy prices?

Home Energy ComparisonThis is where fracking comes in to the government’s policy. It appears that they are planning on continuing forward with some renewable methods (sidelining on-shore wind) and trying to plug the generation gap with fracking, now deemed an urgent priority by the House of Lords.

Theoretically this will make us less reliant on importing gas and less vulnerable to global energy price rises, thus keeping our prices down.

Energy keypoints

  • Growing numbers of people are becoming more wary about the cost of energy, opting for fixed price tariffs to try and avoid cost rises for longer.
  • Be wary of variable price tariffs as energy prices are likely to rise in 2015.
  • Renewable energy is on the rise and contribution from coal and fossil fuels is dropping.
  • Fracking likely to become an even bigger battleground for the next election

Compare fixed price tariffs online now and save up to £200 a year!

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