Energy Demand set to soar as cold weather bites and wholesale electricity prices hit record high

Wind power decline

After the previous weeks' record-high contribution to the energy mix, wind power has once again been shown to be unreliable when it comes to consistently providing energy generation.

Power generation from the UK's wind farms has fallen as the new cold front sweeps the nation prompting National Grid to warn that its electricity supplies will be tight throughout the week. On Tuesday it issued an official call for energy generators to increase capacity.

According to reports wind turbines have ground to a virtual standstill due to low wind speeds.

Also read: Wind Energy breaks new record

Record wholesale energy prices

Electricity prices on the market have skyrocketed over the past 24 hours to surge to a new record high of £1,000 per megawatt-hour as wind power fails to meet demand yet again and as winter temperatures bite fiercely.

Snow and ice are forecast throughout the rest of the week and with millions of people forced to stay at home thanks to the new government-imposed national lockdown domestic energy is set to surge.

The cold snap is predicted to send energy demand to its highest level of the winter so far. The closure of many of the UK's coal power plants has also put a strain on supply and will see the country turning to the continent to make up the shortfall.

"In the short-term, we would like a greater safety cushion (margin) between power demand and available supply. It does not signal that blackouts are imminent or that there is not enough generation to meet current demand," said National Grid.

However, Hartree Solutions, a merchant commodities trading business said. "The UK is at much greater risk of blackouts this winter than the National Grid has forecast, which is reflected in market prices."



Also read: Add your customers to the Priority Service Register with Dyball's CRM

Increasing energy bills

Energy suppliers are likely to raise their tariff prices with the surge in wholesale energy costs, but any price rises will need to be carefully balanced when so many consumers are struggling to pay their energy bills as it is.

It's also likely that Ofgem will increase the energy price cap even after repeatedly saying that it will do all it can to support the most vulnerable consumers. Energy suppliers could come under increasing pressure from rising consumer bad debts, and it will be a delicate balancing act to keep customers onside.

Also read: How should Energy Suppliers explain Energy Bill Increases?

Further Reading

As Lockdown 3 begins the number of customers owing money to energy suppliers hits highest level since 2015

Energy Suppliers under pressure to step up Smart Meter rollout in 2021- How not to alienate customers

Ministers urged to do more as requests for energy bill assistance soar

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