Dealing with the Energy Crisis as a University Student
You’ve probably heard the term ‘energy crisis’ countless times over the last few months. This crisis refers to the skyrocketing of wholesale energy costs since the latter half of 2021, which has been further advanced by the conflict between Russia and Ukraine. The crisis has caused- and will continue to cause- a large increase in the cost of living, with energy bills almost doubling in the winter of 2022 and predicted to rise by more than 40% in 2023! People from all over the UK have been hit hard, and students are no exception.
In this blog, we will explain the ins and outs of the energy crisis, what it means for you as a university student, and give our top tips for dealing with the increase in household bills.
What is the energy crisis?
The energy crisis is a severe rise in the price of wholesale energy, caused by a shortage of fossil fuels paired with an increased demand for them post-pandemic. Russia’s invasion of Ukraine in early 2022 restricted supply even more, which made prices shoot up.
This is a global problem, but the UK has been hit particularly hard due to our heavy reliance on gas. The energy shortage has manifested itself in exorbitant energy bills, which are driving a burgeoning cost of living crisis in the UK.
What is the energy price cap?
Ofgem (the UK’s Gas and Electric Markets regulator) has established a ‘price cap’ to set an upper limit on the amount that energy providers can charge bill payers for gas and electricity.
Ofgem update the cap every six months, taking into account:
- Wholesale energy prices
- Cost of building and maintaining energy networks
- Policy costs
- Supplier operating costs
As a result of energy shortages, the price cap has been periodically increasing, which is reflected in your energy bills.
What is the Energy Price Guarantee?
The Energy Price Guarantee is a new measure that has been introduced by the UK government to mitigate the effects of the energy crisis on UK households.
The Guarantee places a limit on the amount that a typical consumption household can pay towards energy bills per year, irrespective of the Ofgem price cap. The Energy Price Guarantee has frozen bills at £2500 until 31st March 2023, and from April 2023 until March 2024 it will be set to £3000.
For larger households, or households that consume more energy, bills could amount to more as the Energy Price Guarantee sets a limit on how much energy suppliers can charge customers per kwH of energy. Therefore, actual bill size will be determined by energy usage.
How can I minimise my energy costs?
As bills are getting more expensive, it’s in your best interest to attempt to reduce your household’s energy consumption.
Here are some things to try:
- Layer up rather than turning your thermostat up! Central heating is expensive, but it can be tempting to turn it up when the house gets chilly. Opt for a few extra layers instead, as reducing the temperature by even just 1°C can save you money. When you do turn the heating on, keep it at the lowest comfortable minimum of 18°C.
- Submit metre readings. If you don’t submit metre readings, your energy provider will guess your usage. Make sure to take metre readings often so that you only pay for what you use.
- Take shorter showers. Showers are one of the biggest culprits when it comes to high energy bills. One ten minute shower can add £15 to your monthly energy bill! Try to keep your showers to just a few minutes.
PBSA vs HMO – where should I choose to live next year?
With the energy crisis in mind, you might be thinking ahead to your student accommodation for next year.
Students are often turned off by PBSA (Purpose Built Student Accommodation like university halls) due to higher prices, opting instead for HMO (Houses in Multiple Occupation like student house shares). However, bills are usually included in the price of rent for PBSA whereas this is unusual for student house shares.
Now that energy bills are on the rise, it could end up being more economical to opt for housing where all bills are included. Always do your research first before renting.
What should I do if I can’t afford my bills?
If you can’t afford to pay your energy bills, there are options for you.
The first thing you should do is contact your energy provider. They must work with you to determine a payment plan that is feasible. You could be given more time to pay, or be provided with access to hardship funds.
You should also speak to your university to see if they have any grants in place for students that are struggling financially.
Times are tough, but they will get better. We hope that for now, this blog helped you to understand the ins and outs of the energy crisis and gave you some tips on dealing with it.
Be sure to check out the Roome website, where we post loads of tips and tricks for university students every single week. Follow us on LinkedIn, Instagram, TikTok and Facebook to learn more about how we’re revolutionising the student housing market!
Posted by Owen Redman
Co-founder of Roome