The British government is considering providing state-guaranteed loans to energy suppliers. It is thus responding to the sharp rise in natural gas prices, which mainly threatens small supply companies. The BBC reported this today. Significantly more expensive energy makes it impossible for service providers to provide it at the rates they previously agreed to with customers. Some companies are in danger of failing.
The problem is that customers who are failing companies will not want to take over the competition because of the high prices. The government intends to provide loans specifically to make it feasible for businesses to accept new clients.
Wholesale gas prices are up about 250 percent since January, according to Oil and Gas UK. This growth is partly reflected in the fact that natural gas reserves in Europe have declined since last year’s long and cold winter. Asian countries also put pressure on prices, as they also faced cold weather.
We must try to resolve this as soon as possible. “Make sure we have the stocks we want and make sure we don’t allow the companies we depend on to fail.” British Prime Minister Boris Johnson said on the sidelines of the United Nations General Assembly in New York.
British ministers are exploring several ways to help companies such as National Grid, Centrica and EDF, which are about to turn into clients from four failed competitors. In addition to loans guaranteed by the state, they are also considering subscribing to suppliers’ debts, as well as allocating funds to clients whose acquisition would be uneconomical. According to British business minister Kwasi Quarting, UK energy regulator Ofgem will guarantee the supply of gas and electricity even to customers whose supplier has gone bankrupt. Kwarteng continues his talks with the heads of the energy companies he led on Saturday.
Ofgem today announced that British Gas, which is owned by Centrice, will acquire approximately 350,000 customers from the smaller People Energy. It was closed last week. Centrica has already acquired clients from four bankrupt energy companies this year.
High gas prices also affect the supply of carbon dioxide to meat producers. Some fertilizer producers, who produce carbon dioxide as a by-product, have stopped production in the country due to rising gas prices. Britain is therefore in danger of losing meat soon to store shelves because slaughterhouses cannot do without CO2.
Businesses and families across Europe are at risk of rising energy bills. Some countries are already taking measures to compensate consumers for energy prices three times higher. France announced last week that it would distribute about 580 million euros (14.7 billion CZK) to help poor families, in addition to the long-term aid it provides for energy bills. Support measures have also been prepared by governments in Greece and Spain.
According to Petr Bartona, chief economist at Natland Investment Group, this is a purely populist approach that will degrade the planet’s environment. “The main reason for higher energy prices in Europe is higher prices for emissions allowances. They make dirty fossil energy more expensive, and then consumers are incentivized to save it through higher prices, or replace it with cleaner energy sources.”
In the Czech Republic, almost all parliamentary parties announce their efforts to ensure that energy prices for consumers do not rise sharply before the upcoming parliamentary elections. At the same time, they mainly indicated the country’s need for self-sufficiency in electricity production. According to most parties, a solution that can help is the construction of a new unit at the Dukovany Nuclear Power Plant.
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