It’s been 7 weeks since the United States and Israel launched airstrikes against Iran, leading to regional war at great human cost, and an energy crisis that Britain has not been immune to. Despite the fragile ceasefire, the impact of the war on energy in Britain could linger for months or even years.
The most immediate impact for consumers has been on heating oil prices. Global supply fears pushed up crude oil prices, with the UK average price going up from 55-65p/litre in mid-February to over 130p/litre in mid-April. The average household on heating oil consumes around 1750 litres per year, which means they pay between £600 to £1200 annually. This value stands to double in light of the war, affecting roughly 1.5 million households, of which 500,000 are in Northern Ireland. These are mostly rural communities off the gas grid, left vulnerable by price shocks. The government has reacted to this crisis with a £50m subsidy to homes where ‘there is greatest need’ based on census data.
But the impacts of the energy crisis will reach much further, with the cost of petrol and diesel having already risen by 20-25p/litre and 40-45p/litre respectively. Gas and electricity prices are also expected to rise from July with experts predicting the Ofgem price cap to rise by almost £200. This will undoubtedly lead to inflation, higher food prices, and generally higher cost of living.
This energy crisis, the second of its kind in under five years, highlights the vulnerabilities in the UK energy system which is still largely dependent on foreign imports of oil and gas. The Climate Change Committee has shown how a transition to net zero by 2050 would cost less than a single fossil fuel price shock. In other words, we are paying the price of our delayed transition – multiple times over.
But energy resilience isn’t just about switching fuels. It’s about scale and ownership. This is the intervention that the community energy sector must always bring to the forefront.
Large, centralised energy systems, whether fossil-based or renewable, can still leave communities exposed. And as we’ve seen in this crisis, major energy companies like ExxonMobil are positioned to profit from volatility, rather than shield consumers from its impacts. Community energy generation, where decision-making and benefits are rooted locally, offers an alternative model that keeps value within communities.
Our Parish Energy Plans are one example of such an initiative that involves communities in designing local energy systems structured around their needs, rather than the dictates of global markets. This is especially important in rural areas, where households reliant on heating oil are among the most vulnerable to price spikes, which is why we have been piloting our Parish Energy Planning in these communities.
To find out more, visit our website here: Energy planning – Community Energy Pathways