Transmission tower | UK Care Home Industry News

Shocking news for care home energy bills

By Steve Wilson of Focus Business Consultancy

Steve Wilson

September and October have so far been subject to quite a media frenzy about sudden sharp increases in both electric and gas prices. For the first time in many years, we have seen suppliers go bust, and others pull out of new contracts or renewals until things stabilise. Such have been the increases in UK gas prices that a large UK supplier has reverted to coal as a cheaper source of electricity.

There are several reasons for this:

  • There was a major fire at the interconnector in Kent where cross-Channel cables bring in (mainly nuclear-generated) electricity from France via a cable which runs across the English Channel.  After a period of shut-down, the Kent facility is anticipated to stay partially offline until March 2022, spiking fears of shortages in the UK during winter
  • Additional outages in France and in the Norwegian gas fields, which supply the UK
  • Mild UK weather has reduced wind-powered electricity
  • The severe winter in Asia has led to higher local demand for available liquid natural gas which has created a shortage
  • Oil tankers have been delayed by a hurricane on the USA’s Gulf Coast.

So what does this mean for the UK?

  • Energy prices – which have been steadily increasing since February 2021 – are expected to continue to rise until spring/summer 2022
  • The UK electricity grid has less in reserve than is desirable at this time of year: cold weather plus further pandemic restrictions could put real pressure on the grid’s ability to cope
  • Geo-political events such as Brexit/big contract changes impact energy prices and confidence
  • Energy prices closely follow the price patterns of other material prices like oil, wood, steel, carbon, etc.

For care homes, the imperative is to understand your energy requirements and secure the best available contracts.

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