{"id":2684,"date":"2026-05-21T08:10:47","date_gmt":"2026-05-21T08:10:47","guid":{"rendered":"https:\/\/reports.electricinsights.co.uk\/?p=2684"},"modified":"2026-05-21T08:10:49","modified_gmt":"2026-05-21T08:10:49","slug":"insulating-britain-from-geopolitical-energy-shocks","status":"publish","type":"post","link":"https:\/\/reports.electricinsights.co.uk\/?p=2684","title":{"rendered":"Insulating Britain from geopolitical energy shocks"},"content":{"rendered":"\n

Just as Britain was emerging from the energy price crisis\u00a0following Russia\u2019s invasion of Ukraine, the war in Iran gives\u00a0a fresh reminder that our bills are firmly dictated by global\u00a0markets. More than ten weeks into the war, diplomacy\u00a0remains stalled and tankers remain trapped. Attacks and\u00a0cargo seizures have kept\u00a0energy markets on edge<\/a>. More\u00a0than\u00a0a billion barrels of Gulf oil<\/a>\u00a0have been held back, with\u00a0the squeeze being felt by businesses, households and\u00a0holidaymakers alike.<\/p>\n\n\n\n

Fatih Birol, head of the International Energy Agency, warns\u00a0that the world is facing\u00a0 \u201cthe biggest energy security threat in history\u201d<\/a>, which has irreversibly changed the fossil fuel industry. However, Britain is not at imminent risk of energy shortages. NESO confirms<\/a> that electricity supplies are secure, with sufficient operating surplus<\/a> due to clean generation sources. Other countries are feeling the shock more directly and have resorted to emergency energy saving measures<\/a>. India capped gas use in industry, the Philippines introduced a four-day working week, and the EU is encouraging people to work from home<\/a>.<\/p>\n\n\n\n

Energy prices have taken a hit though<\/a>, as one-fifth of the\u00a0world\u2019s oil and LNG supplies remain trapped in the Strait of\u00a0Hormuz. However, the impacts are very different from the\u00a02022 European energy crisis. This time around, petrol and diesel prices soared<\/a> by one-fifth and one-third at their peak, adding \u00a315 and \u00a330 respectively to the cost of filling a 60-litre tank.<\/p>\n\n\n\n

Natural gas prices doubled in the space of two weeks\u00a0to over \u00a350\/MWh, although they quickly began falling\u00a0back to pre-war levels. This spike was typical for recent\u00a0winters, and nowhere near the levels seen in 2022 when\u00a0gas averaged \u00a3128\/MWh, and electricity reached over\u00a0\u00a3350\/MWh.<\/p>\n\n\n\n

The impact on Britain\u2019s power prices has been more muted,\u00a0rising by 20% between February and March. High\u00a0renewable output helped to limit the ability of gas to set\u00a0wholesale power prices. Still, even this modest rise comes\u00a0on top of already sky-high bills, as British consumers face among the world\u2019s highest energy prices<\/a>. Household electricity bills fell slightly<\/a> on 1 April as some policy costs\u00a0were moved into general taxation, but as Ofgem\u2019s price cap\u00a0lags wholesale prices, the Iran crisis is\u00a0 forecast to push bills 12% higher<\/a> in July.<\/p>\n\n\n\n

The Government is trying to weaken the link between gas and electricity prices<\/a> by moving older wind and solar farms\u00a0onto voluntary fixed-price contracts. Their earnings would\u00a0no longer rise when gas prices are high, and those which\u00a0do not opt in will instead face a windfall tax on extra profits\u00a0when prices are elevated.<\/p>\n\n\n\n

Wholesale energy prices increased sharply at the start of\u00a0the Iran war, but only to typical levels during the previous\u00a0two winters, and well below their peak in 2022.<\/em><\/strong><\/p>\n\n\n\n

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These tweaks will help to stabilise bills, but will not equip\u00a0Britain to sidestep the next fossil fuel crisis. Diversifying\u00a0our energy supply is the long-term route to insulate\u00a0consumers from geopolitical instability and price spikes.\u00a0There is broad consumer interest in this direction, shown\u00a0by the increasing demand for rooftop solar panels, electric\u00a0vehicles, heat pumps and building insulation. Policy is a\u00a0critical enabler, and government targets for these\u00a0technologies could collectively shave hundreds of millions\u00a0of pounds per month off the national spend on imported\u00a0fossil fuels by limiting their use to only when needed.<\/p>\n\n\n\n

The biggest impact comes from the Clean Power 2030\u00a0targets to roughly triple wind and solar capacity by 2030.\u00a0If supported by sufficient flexible generation and storage,\u00a0these could avoid around 11 TWh of gas being burned for\u00a0electricity each month, saving close to half a billion pounds\u00a0at current prices. Gas will still be needed for around 5% of\u00a0our electricity in 2030, but its role will shift to providing\u00a0flexible backup for intermittent renewables, rather than\u00a0generating (and setting the price) in all hours of the year.<\/p>\n\n\n\n

The Zero Emission Vehicle Mandate would put over\u00a06 million electric vehicles on our roads by 2030, saving\u00a0around 3 TWh (or 2 million barrels) of oil per month.\u00a0The Warm Homes Plan aims to clean up home heating,\u00a0upgrading 5 million homes from EPC band E to C, and\u00a0switching around 1.5 million over to heat pumps by 2030.\u00a0Each of these will reduce the amount of gas households\u00a0need by around 1 TWh per month.<\/p>\n\n\n\n

What look on the surface to be just environmental policies\u00a0are now clearly both energy security and energy\u00a0affordability policies. Doubling down on clean electricity\u00a0production and electrification of other sectors is Britain\u2019s\u00a0best way to avoid the next fossil fuel crisis.<\/p>\n\n\n\n

The Government\u2019s targets for 2030 would reduce the\u00a0need to import 15 tankers of LNG and oil each month,\u00a0with a value of \u00a3750m per month based on current prices.<\/em><\/strong><\/p>\n\n\n\n

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<\/p>\n","protected":false},"excerpt":{"rendered":"

Just as Britain was emerging from the energy price crisis\u00a0following Russia\u2019s invasion of Ukraine, the war in Iran gives\u00a0a fresh reminder that our bills are firmly dictated by global\u00a0markets. More than ten weeks into the war, diplomacy\u00a0remains stalled and tankers remain trapped. Attacks and\u00a0cargo seizures have kept\u00a0energy markets on edge. More\u00a0than\u00a0a billion barrels of Gulf oil\u00a0have been held back, with\u00a0the […]<\/p>\n","protected":false},"author":10,"featured_media":2706,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[69],"tags":[41,70],"class_list":["post-2684","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-q1-2026","tag-electric-insights","tag-q1-2026"],"acf":[],"aioseo_notices":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/2684","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2684"}],"version-history":[{"count":3,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/2684\/revisions"}],"predecessor-version":[{"id":2717,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/posts\/2684\/revisions\/2717"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=\/wp\/v2\/media\/2706"}],"wp:attachment":[{"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2684"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2684"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/reports.electricinsights.co.uk\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2684"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}