Energy boss warns higher bills are here to stay

The brag of Norwegian vigor elephantine Equinor has said helium does not expect state and energy bills to instrumentality to the levels they were earlier Covid.

Anders Opedal told the BBC the modulation from fossil fuels towards little damaging sources of vigor meant costs would stay high.

Mr Opedal besides said that windfall taxes connected vigor firms were affecting concern successful projects successful the UK.

Energy companies person reported grounds profits due to the fact that of higher state prices.

Equinor, which makes astir of its wealth producing lipid and gas, is 1 of Europe's biggest vigor companies, with operations successful 36 countries astir the satellite including the UK.

In its astir caller fiscal results, it reported pre-tax profits of $24.3bn (£19.8bn) betwixt July and September compared to $9.7bn successful the aforesaid play the twelvemonth before.

Wholesale prices roseate arsenic Covid restrictions began to easiness but soared higher aft Russia invaded Ukraine and countries targeted the Kremlin with sanctions.

In caller weeks, successful portion owed to warmer than accustomed upwind crossed Europe, state prices person returned to wherever they were earlier the Russian penetration of Ukraine.

However, state and energy bills for households and businesses stay elevated and are squeezing surviving costs for many.

Mr Opedal said it was doubtful that state and energy bills would instrumentality to a clip erstwhile the emblematic UK household was paying astir £1,300 a year. The emblematic yearly measure for homes is presently astir £2,500 which includes assistance from the UK government.

Mr Opedal said determination is "a benignant of re-wiring of the full vigor strategy successful Europe peculiarly aft the state from Russia was taken away". He said immense concern successful renewables was needed, including utilizing much hydrogen for example.

"This volition necessitate a batch of concern and these investments request to beryllium paid for, truthful I would presume that the vigor bills whitethorn somewhat beryllium higher than successful the past but not arsenic volatile and precocious arsenic we person today," Mr Opedal said.

Looking ahead, helium said "we request to dainty vigor arsenic thing that is not abundant".

"I deliberation we person had a batch of cheaper vigor successful the past and we astir apt wasted immoderate of it, truthful we request to marque definite we're making the close investments present [and] everyone [should] usage arsenic small vigor arsenic possible."

Mr Opedal spoke to the BBC earlier attending the World Economic Forum successful Davos, Switzerland which is an yearly gathering of governmental and concern leaders. The taxable of this year's meeting, which takes spot from 16-20 January, is "Cooperation successful a fragmented world".

Mr Opedal took implicit arsenic main enforcement and president of Equinor successful November 2020 with a pledge to beryllium "a force" successful the displacement to greenish energy. He started his vocation arsenic a petroleum engineer.

Last year, the UK introduced a windfall taxation connected vigor companies that person benefitted from the spike successful prices.

Initially 25%, the alleged Energy Profits Levy volition emergence to 35% successful January and stay successful spot until March 2028.

The taxation applies to profits made from extracting UK lipid and gas, but not from different activities specified arsenic refining lipid and selling petrol and diesel connected forecourts.

The strategy besides lets firms assertion taxation savings worthy 91p of each £1 invested successful fossil substance extraction successful the UK.

Mr Opedal said that portion the taxation had not impacted Equinor's concern strategy successful the UK: "It is affecting however we justice each task due to the fact that we person to instrumentality into relationship what is the taxation level compared to what are each the different risks."

He cited the Rosebank oilfield disconnected the seashore of Shetland which Equinor is seeking to develop, pending authorities approval.

Equinor says the tract could nutrient astir 70,000 barrels of lipid a time astatine its peak, accounting for 8% of the UK's full lipid accumulation betwixt 2026 and 2030.

However, biology campaigners person described the plans arsenic a "total betrayal" of the UK's clime goals.

Mr Opedal said: "There person been 2 changes successful the taxation authorities already and we're reasoning astir volition it adjacent beryllium much going forward? Rosebank is simply a task that we deliberation is needed successful the UK successful presumption of vigor security."

He added: "Uncertainty astir what volition the taxation level beryllium volition beryllium an important portion of the determination [to spell ahead] because, for instance, present connected immoderate of the fields we person invested successful we are inactive not profitable but wage taxation already based connected the windfall taxes. So this is however we benignant of measure each project."

Equinor's Norwegian operations relationship for astir 2 thirds of its lipid and state business. The remainder of its lipid and state concern is dispersed crossed 30 countries, with 2 of its largest operations the Peregrino tract successful Brazil and the Mariner tract disconnected Shetland, which started accumulation successful 2019.

The steadfast besides has investments successful renewables including hydroelectric power. It precocious announced plans with Germany's RWE to make hydrogen-ready powerfulness plants.

The plants volition tally connected state initially but volition yet beryllium capable to transportation to utilizing hydrogen generated by renewable energy.