As economies worldwide emerge from the COVID-19 pandemic, energy consumption and the cost of energy has increased dramatically.
In the UK, petrol stations have been pumped dry as people panic buy.
Scenes of widespread blackouts have emerged in China due to a shortage of coal, with factories closed and people living by candlelight.
In Europe, a long cold winter has run gas reserves low, whilst imports have been curtailed for various political reasons.
Natural Gas prices in the UK have soared to astronomical levels. In recent days the price of gas soared by 37% in one day. Yesterday it was £1.74 and today it is £2.93.
Figure 1 - Natural gas futures in the UK-tradingview.com
So what does this mean?
We have already experienced the increased prices of natural gas, LPG, diesel, petrol and electricity. These higher energy prices will also translate into higher priced goods and services across the economy including bread and milk.
Energy companies that produce and supply fuels will also be earning a lot more revenue per volume from sales. In our hyper-globalized world, energy prices affect everyone globally.
What can I do about it?
There is not really much we can do in the short term, especially on a budget.
In the medium term we can start to replace old vehicles and appliances with newer more efficient models.
Long term we will have to plan to move away from fossil fuel consuming vehicles and heating appliances. Walking or cycling will become the preferred transport alternative. Adjust lifestyles to avoid and minimize fossil fuel consumption and adopt solar power into households and business's will become essential and we will need to plan for renewable bioenergy.
What will be the long term trend?
Higher energy pricing is likely here to stay and will probably intensify as the world economy rebounds. Economies will look to implement renewable energy at a rapid pace. This includes electric vehicles, increasing uptake biofuels in transport, deployment of hydrogen technologies into transport, bio-CNG as both a transport fuel and supplementing the natural gas grid.
Business will look to replace coal, diesel, LPG and natural gas fueled energy with alternatives such as biomass, biogas, bio-CNG, bio-LNG. The higher price of fossil fuels will drive the uptake of renewable energies.
BPO specializes in renewable energy solutions and providing practical options for reducing business environmental footprint while providing affordable solutions.
For further information email us at enquries@bpo.nz
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