The International Energy Agency president expects energy costs to rise this winter, requiring another round of government bill subsidies.
Fatih Birol warned that gas prices could rise if the Chinese economy grows quickly and there is a harsh winter.
He added that governments should prioritize energy conservation and renewables.
However, a spokesperson for the British government stated that average annual energy expenses will decrease by £430 this month.
After Russia invaded Ukraine, gas prices skyrocketed, driving up energy costs around the globe.
Several governments, including the United Kingdom, assisted households to soften the impact on consumers.
The IEA is an organization that provides governments and industry with data, analysis, and policy recommendations.
Mr. Birol stated that numerous European governments had committed “strategic errors,” including an excessive reliance on Russia for energy, and that foreign policy had been “blindfolded” by short-term commercial decisions.
He stated that this winter “we cannot rule out” another increase in petroleum prices.
“In a scenario in which the Chinese economy is very robust, it purchases a great deal of energy from the market, and we have a harsh winter, we may see strong upward pressure on natural gas prices, which will place an additional burden on consumers,” he explained.
The Chinese economy recovered once Covid restrictions were eased, but it has been declining since.
This week, rating agency S&P Global lowered its growth forecast for China, citing “the risk that its recovery loses more steam amid weak consumer confidence and the housing market.
Additionally, investment banks such as Goldman Sachs have reduced their growth forecasts for China.
Mr. Birol recommended governments, including the UK, to “continue to promote energy conservation measures, particularly as winter approaches.
He added that they should promote renewable technologies so they “see the light of day as soon as possible” and reduce the time required to obtain permits, as well as seek “alternative energy options.”
He stated that he “wouldn’t rule out blackouts” as “part of the game” this winter.
“We do not yet know how strongly the Chinese economy will rebound,” he stated.
Last winter, National Grid predicted that brief power outages were possible; however, this did not occur.
A spokesperson for the British government stated, “We spent billions to protect families when prices rose during the winter, covering nearly half of the average household’s energy bill, which is expected to fall by approximately £430 per month beginning this month.”
As a result of a change to the energy price limit, domestic gas, and electricity bills in the United Kingdom decreased over the weekend, and a further, smaller decrease is anticipated this winter.
A median household spends £2,000 on energy annually, up from £1,000 before the pandemic.
Last Monday, the CEO of Centrica, which owns British Gas, predicted that energy prices will remain high.
Oil licenses
Russia’s invasion of Ukraine sparked a “gold rush” of new fossil fuel exploration, and the United Kingdom disregarded climate warnings by issuing a new licensing round for North Sea oil and gas.
More than 100 applications to drill for additional oil and gas in the North Sea have been submitted.
International climate scientists advocate shutting down fossil fuel efforts, not expanding them.
They claim that limiting global warming to 1.5 degrees Celsius precludes new projects.
Mr. Birol stated that “if the world is serious” about the “climate cause”. Then “we must significantly reduce oil and gas consumption in the coming years.”
He noted that existing oil and gas fields can meet diminishing demand if we minimise usage.
He stated that he has discussions with the CEOs of British energy companies.
Mr. Birol stated that he has “no problem” with oil companies making a profit, but if they say, “I’m going to increase my production by four million barrels per day, and my company’s strategy is in line with the Paris Climate Accord,” then there is a problem.
Within weeks, the government could approve the North Sea Rosebank field, which could generate 500 million barrels of oil.
The UK government stated that it was “committed to reaching net zero by 2050 and has already made significant progress towards this goal, cutting emissions faster than any other G7 country while maintaining economic growth and with renewable and nuclear energy providing half of the country’s electricity generation.
As acknowledged by the independent Climate Change Committee, the transition to cleaner energy cannot occur overnight. And we will continue to require oil and gas over the future decades.
Emma Pinchbeck, chief executive officer of Energy UK, which represents British energy companies, stated that the long-term solution to high bills is to invest in renewable energy and energy efficiency so that we are not dependent on volatile international gas.
Investment in renewables, energy efficiency, and alternative technologies will cut electricity bills over time. Therefore, we must act swiftly, especially in light of the increased international competition for these technologies.
