Soaring energy prices now 'systemic' issue in Europe: Energy UK

Energy prices across Europe are now so high that they are becoming a 'systemic' issue for major economies, CEO of trade association Energy UK Emma Pinchbeck said Dec. 23.

Energy-intensive companies and generators are being asked to turn down plants by governments, or changing output "as a reflection of the cost of energy and the knock-on effects on demand," Pinchbeck said, speaking on the BBC.

Prices are "at levels that we frankly have not really faced in the industry, particularly not in a winter period," she said.

S&P Global Platts assessed the price of UK day-ahead baseload power at GBP327.15/MWh ($437.63/MWh) on Dec. 22, up 33% since the start of the month.

Prices in the Netherlands fell to Eur333.06/MWh ($376.91/MWh) on Dec. 23, down from a record-high of Eur429.84/MWh Dec. 21.

"The price is now so high that this affects the whole of the economy."

Pinchbeck warned that UK domestic energy bills were likely to rise by 45%-50% in the spring as a result of soaring wholesale prices.

"In the UK, in the middle of a pandemic and other cost of living issues and inflation, it's looking pretty serious already for the spring," she said.

Pinchbeck called on the UK Treasury to intervene with support measures that were within its control.

"This is a system-wide issue now, and we're asking for the Treasury in the UK to intervene as others have," citing tax and VAT cuts on energy in other countries in response to the crisis.

Pinchbeck said the government should look at spreading out recouping the costs of failed suppliers over a longer period, as well as bringing forward some of the policy costs on energy bills the government was consulting on removing.

Such measures could save around GBP280 per customer, she said.

Pinchbeck said the UK government's net-zero CO2 emissions targets would help foster greater energy security in the longer term, reducing the country's reliance on gas.