In the midst of a global energy crisis Europe is preparing to enter the winter with its lowest reserves of gas in at least 10 years. For the UK, which has some of the continent’s lowest gas storage capacity, the drawing in of colder months has left households even more vulnerable to the risk of shortages. The UK’s stores hold enough gas to meet the demand of four to five winter days, or just 1% of Europe’s total available storage. The Netherlands has capacity more than nine times the UK’s, while Germany’s is 16 times the size. Britain’s continental neighbours also have lower gas market prices. However, according to the business secretary, Kwasi Kwarteng, any connection drawn between soaring prices and meagre storage levels is a “red herring”. “There’s no way that any storage in the world will mitigate a quadrupling of the gas price in four months, as we’ve seen,” he told MPs this week. “The answer to this is getting more diverse sources of supply, more diverse sources of electricity, through non-carbon sources.”
Guardian 24th Sept 2021 read more »
Charles Moore: Our energy system is no longer reliable or rational. It is almost bound, barring some technological miracle, to grow more unreliable and more expensive for the foreseeable future. Which is another way of saying that we shall grow poorer. The latest rush to the petrol pumps may truly be the result of temporary shortage – the lack of HGV drivers – and therefore no more than irritating. But the relationship between our net-zero policies and power generation is another matter. In his exuberant speech to the UN general assembly this week, the Prime Minister renamed himself “Boreas” Johnson in honour of the North wind and the “great forests of beautiful wind turbines on the drowned prairies of Doggerland beneath the North Sea”. But he was speaking just after the first three weeks of our British September had produced the lowest wind in that month for five years – 1,082 GWh, compared with 2,652 GWh over the same period in 2020. It remains stubbornly the case that wind (and sun) varies. The resulting intermittency has to be made up by other means to keep electricity flowing – in our case, generation by gas. Otherwise we have no security of supply. Because we have allowed ourselves to be so exposed to short-term variations in gas prices, with so little storage, this is blindingly expensive, and we are nearly 50 per cent gas import-dependent. Britain has a policy of buying in distress and so is in no position to get a good price.
Telegraph 24th Sept 2021 read more »
Households are facing soaring bills as power prices surge, but savvy DIY investors could soften the blow by seeking to profit from the energy supply crunch. Last week’s fire at a National Grid substation in Ashford, coupled with Britain’s meagre gas reserves, has left the UK economy exceptionally vulnerable to an extreme global supply squeeze that has sent the price of power surging. UK gas prices have risen nearly five-fold over the past year. Futures contracts for natural gas, to be delivered next month, rose to 189.7p per therm this week, up from 38p a year ago. That has led to a surge in the price of wholesale energy in Britain, which last week spiked to 29 times its average in 2021.
Telegraph 25th Sept 2021 read more »
British Gas has abandoned its long-standing opposition to the energy price cap and admitted that “price regulation has helped the consumer”. Chris O’Shea, the boss of Britain’s biggest energy supplier, also blamed the smaller companies that are going bust for their own demise and warned that households faced a bill of hundreds of millions of pounds for the costs that British Gas is incurring by taking on their customers. He said that well-run firms of any size should be able to withstand soaring wholesale prices and he called for stronger regulation to prevent more suppliers failing.
Times 25th Sept 2021 read more »
If Britain runs short of gas this winter, ministers won’t be able to claim they weren’t warned. Over the past decade industrial groups and independent experts have argued repeatedly for more gas storage to prevent supply shocks. Those warnings have fallen on deaf ears, leaving Britain’s storage capacity to dwindle to one of the lowest in Europe. Now, as a global gas shortage sends prices to record highs, experts have warned that this could be the winter those decisions come back to bite.
Times 25th Sept 2021 read more »