Of recent there has been a media frenzy owing to a worldwide squeeze on gas and energy supplies. This has helped push up gas prices in the UK by 250% since January, and 70% from August alone. We thought we would briefly identify some of the causes and consequence’s of these soaring prices and to offer a potential solution.
The increasing price of wholesale gas is sending shockwaves through the energy sector. We have multiple energy providers collapsing owing to financial pressures, leaving 1.7 million customers affected. To demonstrate the extent of this issue there were 70 Uk energy providers at the start of 2021, as of today there are just over 30. This trend is also predicted to continue with industry sources suggesting that there may be as few as 10 left by the end of the year. This is not only impacting the providers but consumers and industry alike.
There are many reasons for this as a perfect storm of problems has hit the sector. The economy is opening up and trying to rebuild following the lows of the pandemic, demand for gas is also increasing as Europe heads into the colder months of the year. There are also international impacts as supply struggles grow worldwide. Supply from Russia has dried up recently, and demand is high in Asia which is putting pressure on international Markets. Put simply demand is high and supply is worryingly low!
While the majority of the news and media has been focused on the impact and effects for domestic users, the consequences on industry are enormous and cannot be overlooked especially with the heating season looming. One of the first to be impacted are industries that use CO2. CO2 in the UK comes from two sites in the UK as a by-product of Haber Process in the generation of Ammonia for fertiliser. Government intervention has already been required to keep the CO2 production as high Natural Gas prices made fertiliser production unprofitable. The resulting rise in prices has already led to the closure of two major UK fertilizer plants. Other industries including Steel production have also been deeply impacted. The UK’s second largest producer has warned that it could have to close production in the face of unprecedented price increases.
I think we will have the same types of issues filtering down into the wood working industry. Companies that have high process load costs that are reliant of natural gas, oil and LPG are going to be facing huge increases in their energy bills. Heat demands in the wood working industry are on the rise as there is a general trend away from solvent-based finishes towards water-based finishes. This simple change done for environmental reasons can have a large increase in drying time without addition heat and air being added. Kilning for packaging has always been a large consumer of energy in the wood working industry. With Brexit, wood packaging going from the UK to EU now needs to be heat treated.
Owing to the noted significant price increase and the industries reliance on its usage, companies in the wood working industry that usually have a £10,000 a year gas bill might see prices jump to over £50,000 a year which is a notable sum. This problem is only going to worsen as ultimately natural gas in widespread use has no future if this country is going to hit CO2 goals the government has committed to. Industrial wood waste boilers could be the answer.
For any industry where wood is a by-product you potentially have the solution a your doorstep. Coupled with a Ranheat Industrial biomass boiler our customers turn their waste wood into heat that can be used to heat their kilns, spray booths, offices, and factories. As most companies fix their tariffs from year to year, there is still time to get an industrial biomass boiler. They are a drop-in replacement for gas boilers in terms of generating hot water and steam. This eradicates the total reliance on costly natural gas and oil, avoiding huge increases in energy bills. Our customers with an industrial wood waste boiler are insulated from these price rises we are seeing today. So, renewable solutions such as ours not only help save the environment but also your Gas bill. One of the few negatives for biomass is the increased initial capital costs associated with the equipment as compared to Gas and Oil, however with credit and interest rates at their record lows, and some finance companies having specialist funding streams for renewable projects. The time is right for biomass.