Dividends and UK aims to ease fears of energy shortage as natural gas prices surge

Climate change is something every company and government is trying to slow down, however the solutions mean that once in a while there will be conflicts which sends prices up. A case in point is natural gas prices in Europe have increased both because COVID had reduced demand and as every country is coming out of COVID, demand is increasing. However due to regular maintenance schedules of natural gas plants, supply is limited also because of climate change storms are bigger which means actual supply is down. When those elements are combined, those charts from economics 101 of supply and demand happen.

In an article by Daanica Kirka of the Associated Press, gas prices have risen in the UK which means the UK’s Business Secretary Kwasi Kwarteng is trying to ensure the public there will be gas to heat homes and keep the lights on, without costing an arm and a leg.

The UK does have diversified sources half is domestic production (North Sea), 30% from Norway (North Sea) and the rest from European pipelines including from Russia.

Regulators have approved a 12% increase in prices beginning in October.

Linking to dividend paying stocks, utility stocks are part of many investors core holdings because regulators tend to raise prices which ensures the company can maintain its profitability. That is good for the investor, not so wonderful if you are a consumer because there are very few options. All utility companies are moving to ensure part of their supply is renewable from the sun and wind, but with changes in society there are lag times and it will seem if we only used more ….

There are more questions than answers, till the next time – to raising questions.

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