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Shell boss warns energy crisis will not be limited to ‘just one winter’ and fuel could be rationed

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The boss of Shell has said he does not think the energy crisis will be limited to ‘just one winter’ and warned fuel could be rationed ‘for years’.

Ben van Beurden, chief executive of the energy giant, said he expected there to be ‘a number of winters where we have to somehow find solutions’ as a result of the cuts to Russian supplies. 

Speaking at a press conference in Norway on Monday, he said: ‘I do not think this crisis is going to be limited to just one winter.’

He also warned it ‘may well be that we have a number of winters where we have to somehow find solutions through efficiency savings, through rationing and through a very quick build-out of alternatives.’

Chief executive of Shell Ben van Beurden (picturd) in 2015. Mr van Beruden told reporters on Monday that he thought the energy fuel crisis will not be limited to ‘just one winter’ 

Giving a bleak forecast, Mr van Beurden told reporters: ‘That this is going to somehow be easy, or over, is a fantasy we should put aside’.

It comes amid a report in the Times that a number of councils are exploring the use of libraries, art galleries and community centres as so-called ‘warm banks’ over the winter. 

Birmingham, Bristol, Dundee, Glasgow and Aberdeen councils are considering the use of public spaces for people struggling to heat their homes amid soaring energy prices over the winter months, according to the newspaper. 

Libraries (stock image) are among the public spaces that are being considered as 'warm banks' by some UK councils. The initiative would give those struggling to pay their energy bills access to warm spaces during the winter

Libraries (stock image) are among the public spaces that are being considered as ‘warm banks’ by some UK councils. The initiative would give those struggling to pay their energy bills access to warm spaces during the winter

Asked about plans for so-called ‘warm banks’ in libraries, community centres and art galleries, DCMS minister Matt Warman told LBC Radio: ‘Those are initiatives put forward by local councils that are for them.

‘What the Government has to do and has done up to this point and will continue to do in the future is make sure that people have got the resources to heat their own homes.

‘Those initiatives that are put forward, I think, will be welcome to some people. Of course they will be. But what the Government is doing and will continue to do is focusing on giving people the resources they need in their own homes, rather than having to leave them.’

He added: ‘Welcome though these initiatives might be for some people, they’re not going to be the only option. They shouldn’t be the only option… I’m confident that the package of help that’s there and the package of help… (from the next prime minister) will make real progress in that regard.’

Age UK charity director Caroline Abrahams has said 'life is certainly not going to be easy for many older people over the next few months'

Age UK charity director Caroline Abrahams has said ‘life is certainly not going to be easy for many older people over the next few months’ 

Meanwhile, Age UK has said ‘talk of warm banks shows how incredibly serious the challenge of keeping warm this winter looks set to be, especially for older people and anyone on a low income’. 

Caroline Abrahams, director of the charity, said that while she welcomes any strategy being suggested to help older people amid the cost of living crisis, they should not be seen as a ‘substitute for effective government action’.

She said: ‘With prices continuing to sky-rocket, life is certainly not going to be easy for many older people over the next few months. Millions are already struggling to pay for basic items and with high inflation and energy prices soaring, many face a perilous winter.

‘Talk of warm banks shows how incredibly serious the challenge of keeping warm this winter looks set to be, especially for older people and anyone on a low income.

‘While we welcome any strategy being suggested to help older people withstand the cold, investing in existing infrastructure like day centres and lunch clubs, run by local Age UKs and others, and ensuring every older person can afford to heat their home, should be the top priorities in our view.

‘Warm banks may have a role to play this winter but they’re no substitute for effective Government action to help people manage their bills. That’s what we need to see, and quickly.’

The Ofgem price cap will rise from £1,971 now to £3,549 from October 2022, it confirmed today. And experts at energy consultancy Auxilione now think the cap will rise by another 52 per cent to £5,405 in January 2023, then by a further 34 per cent to £7,263 in April - before falling slightly, by 11 per cent to £6,485 in July and by another 7 per cent to £6,006 in October.

The Ofgem price cap will rise from £1,971 now to £3,549 from October 2022, it confirmed today. And experts at energy consultancy Auxilione now think the cap will rise by another 52 per cent to £5,405 in January 2023, then by a further 34 per cent to £7,263 in April – before falling slightly, by 11 per cent to £6,485 in July and by another 7 per cent to £6,006 in October.

Last week, regulator Ofgem announced it was raising the energy price cap by 80 per cent in October, taking the average household’s gas and electricity bill to £3,549 per year. 

Bills are predicted to rise again to £5,400 in January and even further to £6,600 in spring according to forecasts from energy analysts Cornwall Insight.

Ofgem’s chief executive Jonathan Brearley warned of the hardship energy prices will cause this winter and urged the incoming prime minister and new Cabinet ‘to provide an additional and urgent response to continued surging energy prices’.

He also said that the gas price this winter was 15 times more than the cost two years ago.

The regulator said the increase reflected the continued rise in global wholesale gas prices, which began to surge as the pandemic eased, and had been driven still higher by Russia slowly switching off gas supplies to Europe.

Monthly energy costs will see some households spending £500 a month on bills according to Uswitch

Monthly energy costs will see some households spending £500 a month on bills according to Uswitch

Ofgem also warned that energy prices could get ‘significantly worse’ next year. The regulator said that some suppliers might start increasing the amount that direct debit customers pay before October 1, to spread out payments, but any money taken by suppliers will only ever be spent on supplying energy to households.

The rise of the energy price cap has led campaigners to warn that millions of people could face fuel poverty unless the Government gives more support with energy bills. 

It has also led to the emergence of the Don’t Pay UK campaign, a grassroot movement launched in summer 2022, which is aiming to get one million people to stop their energy direct debit from October.

Activists protest against rising energy bills on August 26. The protest took place outside Ofgem's headquarters in London

Activists protest against rising energy bills on August 26. The protest took place outside Ofgem’s headquarters in London

However, Andy Burnham said on Tuesday that he does not support a movement calling on consumers to withhold payment for energy bills in protest against the rising cost of living.

The Greater Manchester Mayor told Sky News he understood why people were joining Don’t Pay UK but that ‘we have to live within the rule of law’.

‘At this stage it’s definitely a step I wouldn’t support. We’ve got to live within the rule of law. We’ve got to keep a country where people respect the rules and the way of doing things.

‘I understand why people are saying it but I wouldn’t in any way recommend that that’s the way people should go.

‘What we need is action to make things affordable for people, but I do feel that that kind of call will increase unless we see the scale of action that is going to be needed.’

The cost of living crisis has also been the focus of the Tory leadership contest, with both candidates making pledges to help struggling Britons.

Ms Truss has pledged to slash National Insurance and cut green levies on energy bills if she becomes prime minister, while she has also hinted at further support for hard-pressed Britons.

Tory leadership candidate Liz Truss has said she will introduce emergency measures to help families with rising energy bills if she becomes the next prime minister

Tory leadership candidate Liz Truss has said she will introduce emergency measures to help families with rising energy bills if she becomes the next prime minister 

As well as her plan to introduce emergency measures to help families with soaring gas and electricity bills this winter, Ms Truss is also due to use her first days in office to approve a series of new oil and gas drilling licences in the North Sea.

In a bid to bolster the UK’s energy security, as many as 130 licences could be issued after recent meetings between ministers and oil and gas companies.

Meanwhile, Rishi Sunak has also vowed to spend billions more to support Britons through the cost-of-living crisis – if he becomes prime minister – as he acknowledged a ‘moral responsibility’ to offer extra help.

Rishi Sunak has also pledged a package of measures to support Britons through the cost-of-living crisis

Rishi Sunak has also pledged a package of measures to support Britons through the cost-of-living crisis

Ms Truss or Mr Sunak will be named as Tory leader on September 5 and the winner is expected to become prime minister the next day. 

Meanwhile, working from home could lead to household energy bills being stretched by an extra £2,500 each year, a new survey has revealed.

Experts suggest home workers will flock back to the office this winter to avoid the severe energy bills.

The average British worker is heading into the office one and a half days per week, meaning remote working will likely lead to an energy bill of £789 in January, compared to £580 for those going into work. 

Sarah Coles, of stockbroker Hargreaves Lansdown, described the ‘horrible scale’ of the energy price increase.

‘Even for those who consider themselves to be comfortable, this is a serious enough crisis that they’re going to need to find new solutions,’ she said.

‘People may have to reconsider how they use their heating, so instead of leaving it on all day they focus on trying to retain as much heat as possible in the rooms they’re using, through things like more drought-proofing.’

Check your boiler and don’t use tumble dryers: What can people do to reduce energy use amid soaring bills? 

– First step: switch off and unplug

Households should by now have done a complete check of every power outlet, unplugging anything that is not necessary and turning devices off standby mode – and getting into the habit of doing this regularly.

Energy Saving Trust calculates that you can save around £55 a year just by remembering to turn your appliances off standby mode.

Almost all electrical appliances can be turned off at the plug without upsetting their programming. You may want to think about getting a standby saver or smart plug which allows you to turn all your appliances off standby in one go.

Check the instructions for any appliances you’re not sure about. Some satellite and digital TV recorders may need to be left plugged in so they can keep track of any programmes you want to record.

– Check your boiler

A recent report by the Heating and Hot Water Council found that households can save around 6% to 8% on their gas bill just by turning down the heating flow temperature on their condensing combi boiler.

Doing this will allow the boiler to run more efficiently and could save around £200 off an average energy bill.

Use the controls on the front of your boiler – not your room thermostat – to set the flow temperature for the boiler, which is the temperature your boiler heats the water to before sending it off to your radiators. The way you adjust the flow temperature and the display information available varies a great deal. There is a handy online guide at theheatinghub.co.uk.

Another easy saving is to turn off the pre-heat mode on the boiler, which could mean hot water taps taking longer to heat up, but could save hundreds of pounds a year.

– Forget about your tumble dryer and use other appliances wisely

Tumble dryers are massive energy drains, so on warm days hang clothes outside to dry instead and invest in a drying rack for cooler months.

Use your washing machine on a 30C cycle and reduce use by one run a week. Only run your dishwasher when it is full and use eco settings if possible.

Avoid overfilling the kettle – only boil the amount you need.

– Defrost your fridge and freezer

Remember to regularly defrost your fridge and freezer, as the more they ice up the more energy they will use.

A full freezer is more economical to run. With a full freezer, the cold air does not need to circulate as much, so less power is needed. If you have lots of free space, half-fill plastic bottles with water and use these to fill gaps.

BBC Good Food suggests you fill the freezer with everyday items you are bound to use, such as sliced bread, milk or frozen peas.

– Turn off lights

Turn lights off when you are not using them or when you leave a room.

Replacing all the lights in your home with LED bulbs could help you save even more.

– Keep windows closed when temperatures get hot

The obvious thing to do when homes warm up is to open all the windows. However all this does is fill the house with hot air.

It is best to use blinds and curtains to block direct sunlight during the day and then open the windows at night when temperatures drop, helping you to save energy by reducing the need for power-hungry fans.

– Use fans sparingly and wisely

Fans, even when used on cooling settings, will send bills soaring. You should not stop using them when necessary, but there are ways of maximising their effect and cutting the time they are switched on.

Putting fans at floor level helps to circulate the lower cold air rather than the warmer air that naturally rises in a room. You can also create the ideal combination for energy saving by pairing smart fan usage with closed windows, keeping the fans working during the day and the windows open at night.

– Invest in insulation

New analysis by the Energy and Climate Intelligence Unit has found homes rated band F on the Energy Performance Certificate (EPC) system, a measure of the home’s efficiency, are set to have a gas bill £968 higher than a home rated EPC band C, the Government’s target for 2035.

The average home in the UK is rated band D and these homes will pay £420 more for their gas this winter, compared with band C.

Energy Saving Trust also says that for those wishing to future-proof their homes, investing in professional draught-proofing and insulation in preparation for the winter months could lead to a reduction in bills by £405 for a semi-detached home. DIY draught-proofing is much cheaper and anything is better than nothing.

Installing solar panels for a similar property could lead to additional annual savings of around £450.

A quarter of heat in an uninsulated home is lost through the roof. Most homes have at least some loft insulation but often not enough. Topping up from 120mm to at least 270mm of insulation will help.

– And here are some myths…

Turning boilers off is not advisable or an effective way to save energy. Instead, thermostats and timers should be used effectively to regulate their operation.

Fridges and freezers are designed to be kept on all the time and energy will not be saved by turning them off for short periods because more energy will be used to cool them down again when turned back on. There are also important safety issues that can arise if food partially defrosts before it is prepared for eating.

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