Energy Crisis: Why Is The UK The Worst Affected Country In Western Europe?

It all comes down to how we get our electricity.
Javier Zayas Photography via Getty Images

The UK has been hit particularly hard by the energy crisis, and is facing a more difficult winter than some of our European neighbours. But what makes the UK so vulnerable to global gas prices?

Rising energy bills have pushed up prices across the continent, and contributed to global inflation.

While other countries are struggling too, winter blackouts and widespread fuel poverty are becoming increasingly pressing concerns within Britain.

The Bank of England has also warned us to expect a long decline of our economy with a recession expected to last five quarters, while the British Chamber of Commerce believes this will kick in before the year is even out.

Now, the International Monetary Fund (IMF) has published data which also suggests that the UK is struggling more than most of Europe.

What does the data say?

The IMF looked at how the energy crisis will impact the rest of 2022 by examining the fossil fuel prices in May.

It found that the UK is set to lose the highest proportion of its spending power this year among all the countries in western Europe, due to the amount its population has to pay for energy bills.

The UK will lose 8.27% of its spending power this year. The Netherlands is not far behind with an expected 8.25% drop, while Malta will see a 7.44% fall and Denmark 6.52%, according to IMF.

Out of the whole of Europe, only Estonia and Czech Republic households are facing a larger decline in household budget than the UK.

That’s not the only issue it’s facing, either.

As homes across the country have already realised, higher energy bills mean other goods are becoming more expensive too, as businesses pass the additional costs onto the consumer.

The IMF claims this will reduce British disposable income in 2022 by a further 2%.

The disparity between the rich and poorer households in the UK is also particularly alarming – the poorest 10% will end up spending around 17.8% of their budget on energy this year.

The richest 10%, on the other hand, will only have to spend 6.1% on their energy bills. This echoes previous findings from the Institute for Fiscal Studies that lower-income households face higher inflation rates, as they have to spend more on gas and electricity.

The difference between these two categories (of 11.7 percentage points) is the largest disparity among the 25 European nations IMF looked at – for comparison, there’s just 3.9 percentage points gap in France.

Why is the UK particularly vulnerable to the crisis?

Inefficient insulation

UK homes are usually quite not very energy-efficient, and notoriously drafty.

This means it costs more to heat British households, especially in the winter.

The UK has the least energy efficient homes in west Europe, according to the climate think tank E3G – where a British home drops by 3C in temperature, German homes drop in just 1C even when both countries are experiencing the same weather outside.

Too reliant on gas

Most British homes use gas for heat (the most expensive form of power), because the UK was previously so dependent on the North Sea gas fields. These are now depleted.

Fewer than half of French and German homes do the same, and only Italy produces more electricity from gas than the UK in Europe. Around 40% of the UK’s electricity comes from gas – in Germany, that’s just 6%, think tank Ember told The Guardian.

So – Is there a solution?

Yes – the UK could start by insulating households across the country and prioritising heat pumps over gas boilers.

Placing the emphasis on wind and solar energy would also help reduce the UK’s dependency on fossil fuels, and renewable energy sources are approximately nine times cheaper than gas.

There’s also been calls for a short-term financial plan for bill-payers (like Labour’s plan to freeze the energy price cap) with an emphasis on providing help for poorer homes.

But, Downing Street has not delivered any significant insulation strategy recently, and has been reluctant to act on onshore wind farms – although Boris Johnson has tried to put the emphasis on nuclear power during his final days in office.


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