Members of The Energy Institute are expecting moderate price increases across a number of markets over the next year according to a recent survey.
Feedback from The Energy Institute (EI) Annual Barometer 2017 reveals that its members are expecting price increases over the next year. The industry predicts upward movement across retail gas & electricity markets, crude oil and transport fuel.
The Annual Barometer is a survey conducted with energy professionals in the UK in order to provide a greater insight into the industry to the general public and policymakers. A 72% majority expects energy prices to rise over the next year, with people working in the energy demand, management and utilisation sectors more expectant of a price hike than others.
Predictions in regards to price increases are largely down to investments in the UK’s transmission network and the growth of low-carbon generation projects which affects non-energy costs in the delivered unit rate. The Energy Institute stated that improving the nation’s energy security and supporting the low-carbon energy industry are two of the most important challenges in 2017. However, the biggest factor behind an expected rise in prices is on-going political uncertainty in the country, causing higher risks for investors.
President of the EI, Professor Jim Skea said: “Political uncertainty also may jeopardise the progress of the UK’s transition to a low-carbon economy. Electricity has been decarbonised substantially, but there is a growing need for action in decarbonising heat and transport.”
The majority of EI members are also pessimistic that the nation will meet its carbon emission targets by 2032. The goal is to reduce annual emissions to an average of 57% below the levels seen in 1990; only 2 out of 10 EI members felt this target will be met under the current policies.
Meanwhile, EI members feel that current energy policy has affected support for new nuclear power and demand-side response projects. However, it is also expected that even though gas will remain the main source of heat in the UK, its share of the mix could drop to around 55%, as opposed to 70% in 2015.
The effects of Brexit were also considered with considerable support for keeping EU energy and climate change legislation when the UK eventually leaves.