Expecting European domestic gas prices to climb by another 10 percent in 2013, a senior energy consultant from research and consulting firm GlobalData has advised energy consumers across the continent to spend on solar PV now or lose money in the long term.
Jonathan Lane, GlobalData’s head of consulting for power and utilities, warns prices will rise for energy consumers in 2013 as both renewable subsidies and higher oil prices push electricity and gas prices higher across Europe.
But, Lane says, these subsidies are a cost and an opportunity: energy consumers that can fund a PV installation, or borrow money to do so, should invest now. Those that can’t will pay higher prices in the future.
GlobalData’s energy expert identifies the UK and Italy as countries particularly susceptible to price increases in the future. He says the UK’s new program intended to ensure that consumers always receive the best tariff probably won’t work.
GlobalData forecasts electricity prices to climb in Italy as a steadily growing oil price feeds through to Italy’s oil-indexed gas price, and ultimately its electricity price via gas-fired generation. Because of this, Lane says a large-scale shift in focus to solar power generation would release the country from the stranglehold of gas and benefit the entire country.
Lane expects governments across Europe to come under greater pressure to improve the safety nets available for the fuel poor, as more and more households slip into this category because of increasingly unaffordable prices. He says utilities will face criticism as customers suspect utilities of profiteering at customers’ expense.
To combat this, Lane suggests utilities find ways to make money out of energy efficiency rather than selling kWhs.
The UK could see a sixfold increase in utility costs this year compared with 2011, according to Reuters calculations. The hikes come from rising wholesale gas prices as well as a carbon price floor imposed by the government.