January 6, 2010
GAS SUPPLIES RUNNING OUT AS BRITAIN SHIVERS
SHIVERING Britain faces the prospect of gas supply shortages as the worst cold spell in 30 years keeps a stranglehold on the country.
The National Grid yesterday issued only its second-ever warning that demand for energy is threatening to outstrip available supplies unless industry quickly slashes its consumption and more gas is rushed in from abroad.
The alert prompted the wholesale cost of gas to rocket by 70 per cent and raised fears that businesses and households could soon be hit by power cuts if the freezing weather persists as forecast for the rest of the month.
Shadow Energy Secretary Greg Clark warned: “For 12 years the Government has had its head in the sand about Britain’s precarious energy security.
“Today’s alert is a taste of what is to come as a result of Labour’s negligence – gas supply shortages and regular power cuts. I have repeatedly warned that Britain lacks the back-up plans that France and Germany have for these situations.” National Grid issued its warning – known as a gas balancing alert – because an unexpected shortfall meant Britain’s demand was at risk.
Gas was flowing out of the UK’s main storage facility at Rough, 18 miles off the Yorkshire coast, at a record rate yesterday as energy needed for homes and businesses came very close to the previous record high.
Analysts said the freeze combined with the post-New Year return to work created a surge which put intense pressure on supplies and added to the need for expensive additional gas to be pumped in from mainland Europe.Experts have estimated that Britain only has enough gas storage for 15 days so in times of high demand we have to rely on imports.
Ian Parrett, of energy analysts Inenco, warned that the country was in danger of being held to ransom over gas prices and blamed a lack of investment in storage plants.
“We’re faced with a shortfall of supply created by a combination of the cold weather and the number of people returning to work and putting the heating back on putting extra demand on the system,” he said. “Some big companies on interruptible gas contracts risk a reduction or cessation of their supply.”
Britain is increasingly reliant on imported gas because North Sea supplies are running out. Official predictions said just over 50 per cent of winter supplies would come from the North Sea with the rest piped from Europe and by ship from the Caribbean and the Far East.
A spokesman for energy market regulator Ofgem said of the National Grid’s alert: “It is a signal to the market to tell it that there is a possibility that gas demand could exceed gas supplies.”
The warning encouraged industry to use less gas and sent an appeal to the supply market to lift quotas. Its impact was a leap in the wholesale cost of gas from 35p to 60p per unit of energy – the therm.
An analyst at energy experts Platts warned: “This is only the first day of the current cold snap. What would be really scary would be if it stayed at 60p for months.”
Jeremy Nicholson, director of the Energy Intensive Users Group, which represents heavy industry, said: “This shows how vulnerable we are in the UK.”
A National Grid spokesman last night said of the imports: “It is all designed to ensure that domestic gas supplies are not affected.”
A spokeswoman for Energy UK which represents the big energy suppliers said: “Consumers shouldn’t be worried about this. The reason energy companies buy in advance is to protect customers from peaks in demand.”