The high energy prices seen in the UK are the result of our dependence on expensive gas – the price of which reached a record 450p/therm in December 2021, compared to 50p/therm the year before. But there is no single reason that explains this record-breaking spike in gas prices. Rather, it is due to a perfect storm of multiple overlapping dynamics affecting global gas markets.
These factors combine to affect the prices that consumers in the UK pay for gas not necessarily because of a direct dependence, but rather due to the UK’s connection to international gas markets.
This briefing clarifies how international dynamics in the global gas market have resulted in record-high energy prices for consumers this year, and why increasing domestic supply of fossil gas is far from the simple fix to this problem that is pushed by some.
As a result, the long-term solutions to the energy price crisis lie in reducing the UK’s demand for gas through the scale-up of energy efficiency programmes and clean energy investment. This builds on a previous briefing outlining short and long-term solutions to the UK’s energy bills crisis that protect consumers and rebuild a more resilient energy system.