by Anya Krawczyk and Dominic Stephen
What’s going on?
A perfect storm of market forces has led to the energy crisis currently facing the UK and other parts of Europe: a cold winter put a strain on gas reserves as households increased their heating demand, and an unusually windless year left wind turbines standing still, creating gaps in the energy supply which needed to be filled by additional gas, nuclear, and coal. The post-COVID economic rebound further exacerbated this mismatch between low supply and high demand, added to the effects of Brexit, which has left the UK less able to draw from natural gas top-ups from European nations as we had done before we left the EU.
Supply issues from a reduction in Russian gas imports, increased gas demand in Asia, and a temporary shutdown of the main power cable from France have all added to the volatility of the situation, and to the UK’s recent vulnerability to energy supply shocks. Overall, this concurrence of factors has led to an uncertain picture of how exactly the UK will meet its increasingly complicated and growing energy demand over the next few months. More renewables? Larger reserves? A more flexible and diverse energy supply? We think that a combination of these will be needed to future-proof and decarbonise the UK’s energy system.
Our solution to the problem is through our Zonal Use of System (ZUoS) platform, which allows consumers to balance and de-risk the local electricity network whilst contributing to decarbonisation.
What does this mean for energy consumers?
With household gas demand overwhelming the supply, energy bills are expected to increase until April next year at the earliest, as energy suppliers pass on their surging costs to consumers. In addition to this, a growing number of energy suppliers are going to struggle severely - and go bust - in the coming months. Squeezed at both ends by rising costs and an energy price cap placed by the Ofgem energy price regulator, many suppliers will be unable to charge consumers high enough to make their ends meet. They will either go into liquidation or will need to be bailed out by the UK Government, both of which are far from desirable.
In addition to the domestic sector, other industries such as food, drink, and medical services are expected to feel the squeeze. This could lead to the short term solution of turning on coal fired power plants, as well as a reduction in food supplies.
What is Scene doing to help?
Scene's suite of Net Zero Services offers a comprehensive carbon audit and tailored decarbonisation strategy for UK SMEs.
The basic law of economics suggests that to return the market to stability, either reduced demand or increased supply is required. With its focus on community and local energy, there are areas where Scene’s services can help you manage the volatility in the market, and help mitigate the impacts.
Scene provides a suite of Net Zero Services aimed to help UK SMEs reduce their demand and reach their sustainability goals in line with the UK Government’s commitment to Net Zero by 2050. This bespoke tool allows users to quantify their baseline carbon footprint, identify how to reduce their energy demand, and provides a decarbonisation strategy made bespoke to the ambitions and scale of the user.
Our expertise in designing local energy systems has led to many communities, landowners and small businesses having their own source of renewable energy generation to reduce their dependence on energy imports.
And we are at the forefront of innovations in energy, helping drive forward market and regulatory change. One example is the ZUoS energy management platform, providing intelligent control over power and heating consumption, to better match variable renewable energy generation with daily demand. The platform learns how and when energy is used, and applies smart controls to reduce overall energy consumption, whilst balancing energy locally depending on energy prices and carbon intensity. ZUoS is unique in that it can work across multiple levels of optimisation - from individual assets, an individual building, and across whole communities. This interoperability will generate a wide range of collective benefits associated with local and circular economies through the capture, matching, and distribution of locally generated energy.
ZUoS focuses at the local scale whilst addressing national and global issues of reliable energy supply, greater uptake and use of renewables, and energy price variation. Smarter, cleaner, and more efficient energy management will reduce the need for network upgrades and help keep energy costs down for suppliers, consumers, and governments.
Whether it be for demand reduction, renewable generation, or enhanced energy balancing, Scene’s services will provide communities and small businesses with the right insights to better manage their costs, cut their carbon impact, and help contribute to the UK’s progress to net zero.
