The Price of Oil in the UK
Oil prices in the UK have recently hit an all-time low in January of 2016. From this point on, the price of oil has steadily risen and has not shown any indication of decline in the near future. With rising oil prices, come higher heating and electricity costs in the home. This has brought more people to consider the installation of alternative fuel options in the home in preparation for the looming surge in oil prices.
The price of oil, like anything else, is controlled by the shifts in supply and demand. In recent years, the demand for oil has been reduced, and the supply has been increased globally. This lead to the drop in the price of oil over the past 18 months. China and India took advantage of this drop by purchasing large stores of oil, which caused oil to spike slightly for a short while, before dropping off once again after China and India had much lower demand for oil.
In the US, fracking operations have grown, lending to the increased supply of oil globally, and further reducing the cost of oil per barrel in 2015.
On top of all of this, Opec has not reduced their supply of oil despite numerous requests by the US and UK officials in order to put a stop to the crash in oil price.
Over the past 18 months, thanks to the growing trend of fracking in the US, and a reluctance in supply cuts from Opec, and a lower demand from the world’s second-largest oil consumer, China, the price of oil continued to dip through 2015, and appeared to bottom out earlier this year in the UK in January 2016. This was the bottom of a 12 year low.
The Price of Oil is On the Incline
After the bottoming out of oil prices in early 2016, oil prices have once again started to rise throughout 2016, and are expected to continue well into 2017 and beyond. This is seen through a significant shift in the global supply and demand of this commodity.
With the recent lifts on international sanctions on Iran over its nuclear programme, and the recent geopolitical turmoil in Africa, the price of oil has again been sharply on the incline.
Additionally, the stored oil reserves in China and India are beginning to run thin which is leading to an ever-increasing demand from these large oil consumers. In fact, the demand in China is forecast to grow by 330,000 bpd this year alone. This number is below the 10-year average but a sharp increase from the past 18 months.
With these recent events, and the apparent bottoming out of oil prices in the UK in January 2016, it appears the days of cheap oil are quickly coming to an end. The prices of oil have been on a steady incline throughout 2016, and show no indication of slowing down.
This has brought alternative fuel sources back to the forefront of many people’s minds in the UK.
Why Alternative Fuel Sources Are a Good Idea
There are plenty of alternative fuel sources on the market, each with their own positives and negatives. The overwhelming positive across the board with these heating options are the savings in light of high oil prices.
Biomass burners, geothermal heaters, and solid fuel boilers can save thousands in electricity and gas bills, even with looming spikes in oil cost.
Additional savings will come from renewable heat incentives provided UK governments. The most recent one, the Renewable Heat Incentive (RHI) in the UK offers an incentive for the integration of more renewable heating systems both on and off the gas grid.
Moving forward, it is going to be increasingly important that we find ways to avoid using oil, or the electricity produced by oil as a means of heating our home and water in order to avoid paying extra in the years to come.
What is the Current State of Alternative Energy Usage in the UK?
The UK as a whole produces roughly 20% of its electricity from alternative and renewable fuel sources, and that number is projected to hit 30% by 2020.
This number represents large-scale energy operations in the UK and the number of households choosing to go with alternative fuel sources is projected to rise along with this number as more people realize the importance of integrating such technologies.
The Importance of Using Renewable Energy Sources
The economic problem of rising oil prices is a major factor in the need to integrate alternative fuel systems in the home. Environmental factors also suggest a need for improvement in the way we produce energy globally. Solar, wind, geothermal, and biomass technologies are becoming increasingly important for the future. The UK itself has committed to a goal of an 80% reduction in greenhouse gas emissions by 2050, which means there’s likely going to be additional incentives for using technologies of this kind both in the home and at work.
We offer a whole range of these systems and are accredited installers. This allows us to offer such grants to our Northern Ireland customers through the Renewable heat Premium Payment (RHPP) scheme. This is one of the systems developed to help homeowners afford these alternative renewable technologies to get them started in the escaping the long-term grasp of rising oil prices. And you can know even more about this technology by contacting us today – Contact Nu World Heating
Posted on October 30, 2016 2:57pm