The UK’s cold snap this week may have blown in from Siberia, but now Russia’s far north is set to provide some relief to Britain: a cargo of liquefied natural gas to replenish the country’s stretched energy supplies. However, the LNG cargo coming from Russia’s Yamal energy project in Siberia will not arrive in the UK without controversy, partly because it will highlight the fragile state of British energy security amid declining gas production. UK gas prices have soared this week as the extreme weather dubbed the “Beast from the East” generated huge demand for energy. Wholesale “same-day” prices more than quadrupled at one point to reach their highest level in at least 12 years.
FT 3rd March 2018 read more »
As Britain plunged into sub-zero temperatures, whipped by freezing gales and deadly Siberian snow storms, energy minister Claire Perry called for calm even as the “beast from the east” drove Britain to the brink of running out of gas. “Do carry on using your gas heating and cooking meals as normal,” she told the public, vowing that the nation would not be plunged into cold within their own homes. Her assurance emerged in the wake of National Grid’s first gas supply warning in almost a decade, and just hours after the Government insisted that there were no supply concerns. But there can be little comfort in averting the unthinkable. Britain may have conquered its worst gas supply crisis in over a decade but it has laid bare the fact that Britain’s energy fate is no longer in its own hands.
Telegraph 3rd March 2018 read more »
Freezing weather sweeping in from the wastelands of Siberia has arguably exposed Britain’s dependence on foreign energy sources and its lack of storage infrastructure. Supplies of gas at one stage fell to critical levels as the so-called “Beast from the East” forced households across the country to turn up their thermostats to stay warm. Yet despite some overblown fears of a 1970s-style energy curfew being imposed, the sudden plunge in temperature has actually proved that the current market driven system for energy supply works, just about. Nevertheless, the closure of storage capacity last year, along with declining North Sea supplies, has left Britain increasingly reliant on imports and renewables to keep the lights and heating on. Under normal conditions this “just about managing” approach would be fine but this week’s sudden plunge in the me rcury is a chilly reminder that energy security isn’t scaremongering – it also really matters for the economy as a whole. What’s clear is that the UK cannot afford to ignore potential new sources of domestic gas supply until better battery storage technology for mass energy storage can be developed. If the economy is to continue growing strongly it will require cheap, reliable and secure supplies of fuel. Importing more liquefied natural gas (LNG) is one potential solution but this also has its limitations. Although LNG – which is gas chilled to a liquid for safe transportation – globally is in abundance with new sources coming on stream from the US and Australia, adding to the likes of prolific existing suppliers such as Qatar, it can’t replace the security of domestic gas. Spot cargoes of LNG shipped on giant tankers can also take weeks to arrive for unloading at the UK’s three terminals by which time any crisis in demand will have abated.
Telegraph 2nd March 2018 read more »
The National Grid’s warning that Scotland could run out of gas as the so-called Beast from the East wreaked havoc across the county is a case of SNP chickens coming home to roost. Europe has also been hit by severe weather, forcing the UK to compete for imports, and prompting the first “gas deficit warning” in almost a decade. The wholesale gas price in the UK more than doubled last week to its highest level in 10 years. Supplies and prices will remain under pressure this week, especially if current winds subside, reducing output from wind turbines, and resulting in the need to burn more gas for electricity. Tom Crotty, director of chemicals group Ineos, which is seeking damages from the Scottish government in a legal challenge against the ban on fracking, said: “We are on a knife-edge when it comes to gas supply and this shows that the Scottish government has got its energy policy seriously wrong.” The SNP’s focus on renewable energy has also hindered sustainable alternatives. New, cleaner replacement gas plants are not being built because Scotland’s drive for more intermittent wind farms means energy companies can no longer be sure how much they will be required to generate, and how much profit they will be able to make. The Scottish government needs to rethink its obsession with renewables and pursue a more balanced energy mix. We can’t wait for hell to freeze over.
Times 4th March 2018 read more »