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Highlights
- UK’s energy Regulator Ofgem announced rise in the energy price cap by 54% from April 2022.
- Chancellor Rishi Sunak has offered £200 as a discount on the energy bills.
- The bank also warned that inflation could hit 7.25% in April that was previously projected at 6%.
Britons were already struggling with rising energy costs in the last few months, when energy regulator Ofgem on Thursday announced a rise in the energy price cap by 54% from April 2022 by £693 pounds, squeezing the budget of over 22 million households.
According to experts, things are going to be worse in near future. Over 15 million lower income households will be pushed into fuel poverty as they spend a large portion of their income on energy bills after paying rent and mortgage. The surge in price is caused mainly by rising global natural gas prices as the country is largely depended on gas as an energy source.
The rising energy bill is not the only reason to squeeze household budget but the unexpected rise in inflation rate 5.4% in December 2021 has forced the Bank of England to raise the cost of borrowing from 0.25% to 0.5%. The bank also warned that inflation could hit 7.25% in April, which was previously projected at 6%.
According to a recent ONS report, two-third of households are struggling with rising living costs, and 8 in 10 are under pressure of rising energy bills. The Bank of England data revealed that the credit card spending is on the rise. As a result, households are cutting their energy use, spending less on non-essentials and some are using their savings.
The rise in energy prices is said to hit the low-income household harder and would drive rent arrears, hunger, ill health, and pile on to already burdened homeless shelters and food banks.
Also Read: Drax (DRX) & Centrica (CNA): 2 FTSE 250 energy utility stocks to buy
Let us now take a look at five renewable energy stocks impacted by the rise in energy price cap in UK.
- National Grid Plc (LON: NG)
FTSE 100-listed National Grid Plc is the world’s leading largest energy and gas transmission and distribution company operating across UK and US. National Grid Plc has given a return of 23.77% to its shareholders in the last one year and its year-to-date return stands at 2.11% as of 4 February 2022. Its shares were trading at GBX 1,080.60, down by 1.20%, at 12:30 pM BST, with a market capitalization of £39,984.68 million on 4 February 2022.
- Shell Plc (LON:SHEL)
FTSE 100-listed Shell Plc, formerly Royal Dutch Shell Plc is an international energy and petrochemical company. Shell Plc has given a return of 53.83% to its shareholders in the last one year and its year-to-date return stands at 24.18% as of 4 February 2022. Its shares were trading at GBX 2,020.50, up by 3.11%, at 12:30 PM BST, with a market capitalization of £149,940.51 million on 4 February 2022.
Also Read: National Grid (NG.) & SSE: Should you hold these energy stocks?
- Drax Group Plc (LON: DRX)
FTSE 250-listed Drax Group Plc is a power generation business with a portfolio of renewable biomass and hydro assets to offer renewable and low-carbon generation and system support services.
Drax Group Plc has given a return of 56.09% to its shareholders in the last one year and its year-to-date return stands at -0.41% as of 4 February 2022. Its shares were trading at GBX 602.50, down by 0.08% at 8:00 AM BST, with a market capitalization of £2,435.28 million on 4 February 2022.
- AFC Energy Plc (LON: AFC)
FTSE AIM UK 50-listed AFC Energy Plc is a leading Alkaline Fuel Cell power company that offers the best quality performance and lowest operating cost Fuel cells to decarbonise industry.
AFC Plc has given a return of -54.88% to its shareholders in the last one year and its year-to-date return stands at -27.69% as of 4 February 2022. Its shares were trading at GBX 36.70, down by 3.65%, at 12:30 PM BST, with a market capitalization of £271.76 million on 4 February 2022.
Also Read: Harbour Energy (HBR) & Energean (ENOG): 2 FTSE 250 stocks to buy
- Gore Street Energy Storage Fund Plc (LON: GSF)
FTSE All share-listed Gore Street Energy Storage Fund Plc is a diversified closed-ended investment company. Gore Street Energy Storage Fund Plc has given a return of 6.76% to its shareholders in the last one year and its year-to-date return stands at -2.38% as of 4 February 2022. Its shares were trading at GBX 115.50, down by 0.43%, at 12.30 PM BST, with a market capitalization of £400.24 million on 4 February 2022.
