Why high energy prices.

groogles

Considering the country is practically self sufficient in energy production, why do we have to purchase this same energy on the Global Market? Do other producers have to do the same?

Evan3020

The government does not provide the energy, private companies do.
The government does not know how to find and drill for oil and gas.

Mstty

groogles said:

Considering the country is practically self sufficient in energy production, why do we have to purchase this same energy on the Global Market? Do other producers have to do the same?

Sadly we aren't self sufficient we import 50% of the gas we need.

Source  https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/articles/trendsinukimportsandexportsoffuels/2022-06-29#:~:text=The UK imports around 50,heated by mains gas supply.

400ixl

We also import electricity on a daily basis, so not self sufficient as a country. The object would be to get their through nuclear and sustainable energy sources, but a long way and many years to go before we reach that point.

MattMattMattUK

We import 45-55% of the gas we use depending on the season, a considerable proportion of all the vehicle fuel we use (especially diesel) and we import electricity via internconnectors with France, Netherlands, Belgium, Norway and Denmark. We also have three gas internconnector pipelines with Europe (Norway, Netherlands and Belgium) and of the total energy consumed, depending on the season and even the day we import between 25% and 50%, with about 35% of total energy being imported. 

Nifty_Purse

There are other temporary supply reductions pushing up prices too:

Last September there was a big fire on the interconnectors to France so they won't be fully fixed until next year.
https://news.sky.com/story/fire-damaged-power-link-will-not-be-fully-restored-for-two-years-says-national-grid-12434131

Hinkley Point B reactor just been turned off:
https://www.bbc.co.uk/news/uk-england-somerset-62339183

[Deleted User]

groogles said:

Considering the country is practically self sufficient in energy production, why do we have to purchase this same energy on the Global Market? Do other producers have to do the same?

Where has this bit of information come from? If we were totally self sufficient, we wouldn’t need LNG terminals; a pipeline from Norway et al, and electricity inter-connectors with mainland Europe.

It is worth noting that with Europe struggling to secure enough gas supplies, the UK may also struggle to keep the heating on during a very cold snap:

’ The UK’s stores hold enough gas to meet the demand of four to five winter days, or just 1% of Europe’s total available storage. The Netherlands has capacity more than nine times the UK’s, while Germany’s is 16 times the size’. 

The balance has to come from UK extraction or by LNG. LNG tankers have been turning East rather than West because China is prepared to pay top $ for any gas it can get.

bikeman

Quite simply the wholesale arm of Shell, BP etc pull the oil and gas out of the north sea relatively cheaply. They then sell it at the agreed golbal wholesale rate to their own retail company ie they make a massive profit on this transaction.

The government has set a limit on the price that the retail company can then sell it to us based upon that wholesale price. The upshot is the retail arm of Shell, BP etc have to buy high and then sell with limited margin, boo hoo on them. So the retail arms of energy companies dont make much profit, hence 30 of them going out of business recently.

However the price cap rate is still high so us retail customers have effectively paid BP/Shell wholesale a massive windfall when their costs have remained comparatively low. North sea gas is very much cheaper to produce then it is to buy Russian gas BUT we dont benefit in anyway because both are priced the same.

The system is corrupt and our govt is doing fk all to rectify it.

Evan3020

Please explain how the Government could find and extract oil and gas without BP/Shell etc?
Do you think they would get the civil service to do it?

spot1034

bikeman said:

Quite simply the wholesale arm of Shell, BP etc pull the oil and gas out of the north sea relatively cheaply. They then sell it at the agreed golbal wholesale rate to their own retail company ie they make a massive profit on this transaction.

The government has set a limit on the price that the retail company can then sell it to us based upon that wholesale price. The upshot is the retail arm of Shell, BP etc have to buy high and then sell with limited margin, boo hoo on them. So the retail arms of energy companies dont make much profit, hence 30 of them going out of business recently.

However the price cap rate is still high so us retail customers have effectively paid BP/Shell wholesale a massive windfall when their costs have remained comparatively low. North sea gas is very much cheaper to produce then it is to buy Russian gas BUT we dont benefit in anyway because both are priced the same.

The system is corrupt and our govt is doing fk all to rectify it.

We do benefit through the huge amount of tax they pay on their profits.

pochase

bikeman said:

Quite simply the wholesale arm of Shell, BP etc pull the oil and gas out of the north sea relatively cheaply. They then sell it at the agreed golbal wholesale rate to their own retail company ie they make a massive profit on this transaction.

The government has set a limit on the price that the retail company can then sell it to us based upon that wholesale price. The upshot is the retail arm of Shell, BP etc have to buy high and then sell with limited margin, boo hoo on them. So the retail arms of energy companies dont make much profit, hence 30 of them going out of business recently.

However the price cap rate is still high so us retail customers have effectively paid BP/Shell wholesale a massive windfall when their costs have remained comparatively low. North sea gas is very much cheaper to produce then it is to buy Russian gas BUT we dont benefit in anyway because both are priced the same.

The system is corrupt and our govt is doing fk all to rectify it.

Who were all the bad big companies who let their 30 small suppliers go bust by not selling them cheap energy?