James Kirkup James Kirkup

The gas crisis shows how important net zero is

And the free market is the best way to get to it

This gas crisis has hit Britain because we rely too much on gas. That’s not a reason to abandon net zero. It’s a reason to do it.

Gas prices are soaring, energy companies are failing. A few people are blaming government environmental policies for that. Their apparent hope is that Boris Johnson proves wobbly on green causes and backs away from net zero.

I think they’re wrong, both about the policy and about the politics.

Start with the policy. The net zero decarbonisation of the UK economy isn’t the cause of the gas price crisis. It’s the solution.

Wholesale gas prices are soaring in Europe for several reasons: higher global demand, lower supply from Russia, and yes, some green-related factors including less electricity generation from renewables (the wind hasn’t been blowing as much as normal) and EU carbon pricing.

This creates a problem for most European countries, but the UK is hit especially hard. Despite great advances in renewable electricity generation and the almost-complete phasing out of coal-burned power, the UK is still heavily dependent on gas. More than 80 per cent of UK homes are heated with gas. And we import around 60 per cent of all the gas we burn, partly because we don’t have much capacity to store the stuff as a hedge against price rises.

When it comes to domestic consumers (also known as “voters”), the international gas market is pretty directly connected to their household finances. About a third of your gas bill reflects wholesale prices. Around a quarter goes to pay for network costs, paying for the pipes and other stuff that actually gets gas to your home. Then around 15 per cent is environmental and social levies – not just supporting renewable energy, but subsidising low-income households.

These last two items on that list haven’t changed much recently.

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