The Minister of Economic Affairs is to hold talks with representatives of energy-intensive industries such as steel and chemicals in order to discuss the gas wholesale crisis.
On Thursday, Kwasi Kwarteng gave an “energy update” in the form of a Twitter thread, insisting that protecting consumers from rising global gas prices was “his top priority”.
He also announced that on Friday he will meet with the Energy Intensive Users Group (EIUG), which represents companies such as manufacturers of steel, chemicals, fertilizers, paper, glass and cement.
He said, “The energy price cap is holding back a wave of immediate bill hikes. It will stay in place and stay at the same level this winter.
“So far Ofgem (the gas and electricity market office) has relocated 1.7 million customers to new suppliers.
“We have allocated £ 2 billion over the past few years to help the industry with energy costs.
“On October 1st, we changed the gas transport charges to give bulk consumers a discount of up to 77% – depending on the distance to the entry points.
“I’ll also meet the Energy Intensive Users Group tomorrow.”
EIUG members include trade associations and customer groups representing industries with the highest energy consumption in the UK.
These are UK Steel, the Chemical Industries Association, the Confederation of Paper Industries, the Mineral Products Association, the British Glass Manufacturers Federation, the British Ceramic Confederation, BOC, Air Products and the Major Energy Users Council.
Although Mr. Kwarteng tweeted about the meeting, the Ministry of Corporate, Energy and Industrial Strategy refused to provide details about it.
Analysts have predicted Britain’s energy bills could rise 30% over the next year.
Research agency Cornwall Insight has alleged further volatile gas prices, and the potential collapse of even more suppliers could push the energy price cap to around £ 1,660 in the summer.
The forecast is about 30% above the record price cap of £ 1,277 for the winter of 2021-22 that began in early October.
Craig Lowrey, Senior Consultant at the company, said, “As wholesale gas and electricity prices continue to hit new records, successive exits in September 2021 and a new level for the standard tariff cap (£ 1,277 for a typical dual-fuel direct debit customer) for the Winter 2021-22, the UK energy market will remain on the rise in terms of new volatility and further consolidation. “
The energy regulator Ofgem reviews the price cap every six months and changes it based, among other things, on the costs that suppliers have to pay for their energy, the costs of policies and the operating costs.
In a statement to the BBC, Ofgem admitted it was “a worrying time for many people”.
Mr Kwarteng said consumers will be better protected from volatile gas prices as wind and solar power start bringing more energy to UK households.
He insisted that by decarbonising the UK’s electricity supply, the government would ensure that households were less vulnerable to fluctuations in fossil fuel markets.
Speaking at a conference organized by the Energy UK trade association, he said: “The UK, as many of you know, has made great strides in diversifying our energy mix. But we are still very dependent, perhaps too dependent on fossil fuels and their volatile prices. “
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