19.2 C
Monday, July 22, 2024
HomeNewsEnergy boss says prices might spike this winter

Energy boss says prices might spike this winter

Energy prices could spike this winter forcing governments to step in and subsidise bills again, the head of the International Energy Agency has said.

If the Chinese economy strengthens quickly and there is a harsh winter, gas prices could rise, putting pressure on consumers, Fatih Birol said.

He added that governments should push for energy-saving and boost renewables.

However, a UK government spokesperson said energy bills are set to fall by an average £430 this month.

Gas prices soared after Russia’s invasion of Ukraine, driving up energy bills around the world.

A number of governments then stepped in with support for households, including in the UK, to try to soften the blow to consumers.

Mr Birol told the BBC’s Today programme that many European governments made “strategic mistakes”, including an over-reliance on Russia for energy, and that foreign policy had been “blindfolded” by short-term commercial decisions.

He said this winter “we cannot rule out” another spike in gas prices.

“In a scenario where the Chinese economy is very strong, buys a lot of energy from the markets, and we have a harsh winter, we may see strong upward pressure under natural gas prices, which in turn will put an extra burden on consumers,” he said.

The Chinese economy had been bouncing back after Covid restrictions were lifted, but recently its economy has been slowing down.

Ratings agency S&P Global this week cut its forecast for Chinese growth, saying “the risk is that its recovery loses more steam amid weak confidence among consumers and in the housing market”.

Investment banks including Goldman Sachs have also been cutting forecasts for Chinese growth.

Nevertheless, Mr Birol said governments including the UK should “continue to push measures to save energy, especially as we enter the winter”.

They should also push renewable technologies so they “see the light of day as soon as possible” and cut the time it takes for them to get permits, and look for “alternative energy options”, he said.

He said he “wouldn’t rule out blackouts” this winter as “part of the game”.

“We do not know yet how strongly the Chinese economy will rebound,” he said.

National Grid said last winter that short power cuts were a possibility – in the end, this was not necessary.

A UK government spokesperson said: “We spent billions to protect families when prices rose over winter covering nearly half a typical household’s energy bill, with them set to fall by around £430 on average from this month.”


Most Popular