EU energy security: Implications for the UK
Russia’s invasion of Ukraine has highlighted the fragile state of the EU’s energy security. How has the EU responded and what does this mean for the UK?
Overview
The energy sector was privatised in the 1980s, before which time it was dominated by regional public electricity suppliers, and by British Gas or Scottish Gas.
After privatisation, the energy market then entered a period of liberalisation with new suppliers entering the market and establishing competition for customers. The industry regulator is now the Office of Gas and Electricity Markets (Ofgem).
In recent years, the energy market has undergone considerable restructuring to respond to changes in the wider energy sector. These have included the introduction of a price cap and various other schemes to protect consumers from high costs, and past and proposed future changes to the way energy is traded as the UK’s energy mix transitions to low carbon generation (from a fossil-fuel-dominated mix to one with more renewables).
Government policy currently focuses on energy security, high costs, and decarbonisation. Reforms in these areas are driving changes to the mix and structure of the wider energy market.
This webpage collects all our energy markets and prices research, and the links below are to some of the various Library publications on this topic.
Briefings
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Domestic energy prices
Typical household energy bills increased by 54% in April 2022 and 27% in October 2022. Lower wholesale prices have led to falls in prices, but bills remain around 29% above their winter 2021/22 levels.
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British Energy Security Strategy
A Westminster Hall debate on the British Energy Security Strategy is scheduled for Tuesday 5 July 2022, from 2:30-4:00pm. The debate will be led by Mick Whitley MP.
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Energy bills and the price cap
This briefing provides background on energy bills and the price cap, further information on recent reforms to the cap methodology, and proposals for different approaches to price regulation.
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Why is cheap renewable electricity so expensive on the wholesale market?
Under the ‘marginal cost pricing system’, the wholesale price of electricity is set by the most expensive method needed to meet demand (usually burning gas).
More energy policy collections
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Energy policy research
The Library’s research on energy policy, covering consumers, infrastructure, markets and prices, and legislation, is collected on this webpage.
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Energy policy research: Consumers
See all the Library’s research on consumer energy issues including bills, grid connections, energy efficiency, domestic heat and power installations, and fuel poverty.
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Energy policy research: Infrastructure
See all the Library’s research on energy infrastructure issues including large-scale energy generation, and transmission and distribution through grid networks.
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Energy policy research: Legislation
Various pieces of energy legislation have been passed recently or have been proposed by the Labour government. See all our briefings on this legislation here.
