5 per cent increase to Ofgem Price Cap – Schneider Electric comment on lowering bills and upgrading the grid

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  Posted by: electime      24th November 2023

With the 5 per cent increase to the Ofgem energy price cap announced, Kelly Becker, Zone President for Schneider Electric UK & Ireland and her colleague David Hall, VP Power Systems, Schneider Electric, UK&I. provide their comments

  • Kelly highlights what the price cap means for consumers, and how energy efficiency will be a sure-fire way to keep costs low this winter. New global research from Schneider Electric has found that 86 per cent of consumers rank this as the most desired home improvement.
  • David takes a broader view looking at what can be done to protect households and businesses from fluctuations in the wholesale energy market, by modernizing the national grid, to add greater resilience and ensure energy security.

Kelly Becker, Zone President for Schneider Electric UK & Ireland, said:

“A 5 per cent rise in the price cap means households must brace for a tougher winter. But a volatile energy market doesn’t necessarily mean uncertainty for consumers. Opting for a fixed deal can lock in prices – although this carries the risk of missing out on savings if the price cap falls again.

“The most effective way for households to cut costs is to cut energy consumption – after all, the cheapest energy is that which isn’t used. 86 per cent of consumers see making their homes more energy efficient as a top priority – and last winter nearly three-quarters (72 per cent) reduced energy use to lower bills.

“Homeowners can take prudent steps – for example, turning the thermostat down by just one degree can save up to 10 per cent energy, while installing a smart thermostat can grant greater control over energy usage. Insulation is another effective and cheap way to reduce bills, and grants are available for those who are eligible.”

David Hall, VP Power Systems, Schneider Electric, UK&I:

“Households face a tougher winter owing to a volatile energy market and jump in gas prices – with the price cap set to rise by 5 per cent from January. The situation was more optimistic in the autumn when wholesale energy prices began to level out due to careful planning, lower demand and a build-up of storage reserves. However, storage can only do so much and there was always a risk that prices would be disrupted if the temperatures in Europe were to drop, significantly increasing demand and draining reserves.

“Unfortunately, the energy market will aways be subject to external factors, such as a cold winter or a sharp rise in demand for oil and gas from other markets, pushing up prices and forcing the UK to bid higher for imports. Once again, this highlights the need for a more secure and sustainable domestic energy system that will reduce the UK’s reliance on imported energy supplies, especially during the winter months when we place greater demands on the national grid.

“The solution lies in a smarter, decentralised grid based on a network of self-contained microgrids that generate electricity using a mixture of renewable energy sources. The foundation of this infrastructure already exists. There are installations up and down the country based on smart power distribution systems managed by digital tools configured to manage existing capacity, without placing additional strain on the grid. The data and insights they provide facilitate a transition to off-grid solutions powered by wind, solar and other clean energy sources like green hydrogen. Replicating this model on a national scale would add resilience and help to future proof the UK’s energy sector for years to come.”