Energy companies need to be alive to both the changing climate of public opinion and threats posed by climate change groups.
The recent price cap announcement may have taken the sting out of energy price protesters, but they haven’t gone away.
Businesses continue to have uncertain futures due to the six-month commitment to an energy cap. This may prompt unrest amongst business owners and staff redundancies if energy bills make businesses untenable to function.
If stark inflation predictions are correct there may be continued civil unrest throughout the coming year. Energy companies will not be removed from this. .
History has shown us that public demonstrations in the UK, peaceful or violent can change public policy as seen in the 1990 Poll Tax riots. While more recently cost of living protests in London at the start of this month arguably contributed to the overturn of Liz Truss’s top-bracket tax cuts.
Energy companies must continue to monitor the global political environment as economies fall into recession to ensure they are best placed to react.
With the global economy already maimed by months of economic stagnation born out of continental-wide lockdowns we then saw Russian tanks rolling into Europe providing the perfect storm. The war in Ukraine has seen a multilateral move away from Russian petrochemicals, prompting further rises in an already inflated energy market instigating further British government intervention. Despite the newly announced price cap, UK energy bills in October are still due to be double that of the previous winter. Goldman Sachs has predicted that if natural gas rises remain elevated, inflation in the UK could hit 22%.
Such concerns have seen many protests in recent months over stagnated wages, with more recent movements such as, Enough is Enough and Don’t Pay UK echoing previous campaigns from the 1990s. Enough is Enough is a group that has gained prominence in recent months campaigning for an increased minimum wage, end to food poverty, cheaper housing but also a reduction in energy bills. Don’t Pay UK has demanded a reverse of the energy price cap to its pre-April 2021 level. If this is not met it aims to gather one million supporters for an energy bill strike. The group has now gained over 203,000 supporters, and with the recent announcement that the energy price cap will now only run until April 2023 this movement is likely to retain support. In recent weeks there have been protests throughout London by Don’t Pay UK and Enough is Enough. Energy companies should be aware the threat to their operations in the UK is no longer solely environmental but political and economic and felt in every home across the UK.
The situation as seen by UK Energy Companies is on the one side dominated by groups such as Extinction Rebellion (XR) and Just Stop Oil (JSO) advocating for a rapid green transition from hydrocarbons and on the other a movement based on rising energy prices and the cost of living. The war in Ukraine has demonstrated how fragile highly integrated energy markets can be, the green transition is thus, likely to be slower and more strategic. This in conjunction with the government granting new North Sea licences and the reintroduction of fracking will further the cause of groups such as XR and JSO. As the war in Ukraine continues, there will remain market instability and supply issues prompting further rises in gas along with inflation. Given that reintroduced UK production won’t happen overnight, inflation, cost of living and energy prices are likely to remain high this winter prompting further action from groups such as Don’t Pay UK and Enough is Enough. Therefore, Energy companies are likely to see significant opposition from both environmental and cost-of-living protest groups throughout this winter.
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Featured photo credit: Li-An Lim (Unsplash)