Reasons Why Energy Prices Will Rise from Here
In the last decades, fossil fuel prices have skyrocketed, and with 76% of energy being generated from fossil fuels, it also had a domino effect on electricity prices. With the energy demand is growing every day, we need to find ways by which we can find an affordable plan using Compare Electricity Plans. In this context, we will discuss why average electricity prices are rising and why this trend will continue in the coming foreccseeable future.
In the last two years, demands have skyrocketed, and the lockdown acted as a catalyst. With people forced to live in their homes due to the global lockdown, the average energy consumption increased. This coupled with a shift to EVs has added to the fuel. So, in totality, the world will face an inevitable energy crisis. In this context, we are going to discuss why the electricity prices are bound to rise:
Overall demand is on the Rise- The electricity demand is at an all-time high, and we know the relationship between demand and supply. If the demand is high, the prices are bound to go higher, and if the demand is low, the prices will drop. So, the demand is never going to go down, meaning the prices will always get higher. So, try to find the best plan using Compare Electricity Plans.
Ongoing War Between Russia & Ukraine- The ongoing war between Ukraine and Russia has further added to the fuel. Overall crude oil prices have reached a new height, and this trend will never reverse. As we have discussed that the, 76%of the electricity comes from fossil fuel, the rise in crude oil prices directly impacts the electricity price.
Shift to Renewables- With the world leaders focusing on reducing carbon emission globally, the world is shifting to renewables. Renewables require a lot of upfront costs, and the maintenance cost is quite high. That’s why energy prices are bound to rise in the coming years. As the market for renewables becomes mature, the prices for renewables will go down.
Overpopulation- This is one of the major causes behind the rise in energy prices all across the globe, China being the largest consumer of electricity followed by the United States and India. The population is increasing at an alarming rate, which is putting a lot of pressure on the supply chain; thus, the prices are bound to increase.
The rising cost of distribution network- The distribution network that includes poles, transformers, wires, and other component prices are rising that will directly impact the electricity price. With inflation at record time high, the distribution network cost will not get low anytime soon, thus adding to the price of electricity per KWH. As a consumer if you are looking for the best plan you can use Compare Electricity Plans to find the best plan.
As we can see that the energy prices are bound to increase, we need to incorporate ways by which we can reduce our dependence on fossil fuels. The best way to move forward is to transition to renewable energy sources, there is no doubt that this will be a difficult road moving forward, but this needs to be done to meet the energy demands of the world and cut down the fuel prices.
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