Energy questions I constantly hear in the media that the energy price crisis is due to world prices in the free market economy, but strangely never any detail as to what this means. My understanding is that the basic economics of supply and demand dictate world price and our bills follow. The cost of exploiting fossil fuels also increases as sources (supply) deplete.
During the pandemic, fossil fuel demand plummeted and supply could only be adjusted slowly, so with limited available storage space, prices plummeted too. Now demand has bounced back, so prices have risen again. If supply is still low but demand high, prices rise sharply. If geopolitics based on the desire for money or power (whichever nations that could possibly refer to) deliberately keeps supply below demand, those prices skyrocket. That extra money doesn’t just disappear, it goes into a deep pocket somewhere. The supply of renewables – wind, sun, water, tide, wave, geothermal etc – all available in the UK, stay relatively constant, pretty much infinite and largely free at source, but obviously have a cost to exploit. Is my thinking and understanding wrong?
Mike Potter, Pickering
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