The government said energy security was “a top priority” as Business Secretary Kwasi Kwarteng began talks this weekend with representatives of the energy industry over concerns over an increase wholesale gas prices.
Kwarteng meets with general managers of energy suppliers and operators to discuss the extent of the impact of the price spike, which has been blamed on strong global demand, maintenance issues and declining production solar and wind power.
He insisted that there was enough gas to meet demand. He tweeted: “Britain has a diverse range of gas supply sources, with sufficient capacity to more than meet demand. We do not expect supply emergencies this winter.
A senior industry official said the business secretary intends to hold up to 20 one-on-one meetings with energy industry executives this weekend as part of the of an “intelligence gathering exercise” to “assess how bad things could be”.
The crisis talks are taking place ahead of an industry roundtable scheduled for next week to debate how government and industry can work together to deal with the economic fallout from record gas market prices, household bills. heavy industry and the food sector.
The government would be willing to consider short-term measures to help businesses and households weather the looming winter energy crisis, but may also consider a longer-term reshuffle to accelerate the UK’s shift away from fossil fuels and address to “fragility in the retail energy market”.
“There is nothing about this situation that would not be better if we were less dependent on gas,” the source said.
Gas prices have jumped around the world after a long winter in which gas reserves in Europe and Asia were severely depleted. Storage levels remain well below average and gas imports into Europe from Norway, Russia and the Middle East have slowed.
In the UK, rising gas prices have also led to record prices in the electricity market, as the UK depends on gas-fired power plants to produce almost half of its electricity. Low wind speeds have reduced renewable energy production in the UK, and a series of blackouts at UK power stations and a major cable connecting the UK to France have pushed up market prices.
Five energy providers have gone bankrupt in the past five weeks as energy market prices have skyrocketed, leaving more than half a million homes in need of bailout measures from the country’s regulator. sector.
Soaring gas prices have also caused a European-wide slowdown for some chemical plants that produce fertilizers, a by-product of which is carbon dioxide, used in soft drinks and beer as well as in industry. meat to stun animals before slaughter.
The weekend’s energy crisis meetings are expected to gather views from the CEOs of the UK’s biggest energy companies including Ofgem, Centrica, National Grid, Energy UK, Octopus, Ovo, SSE, EDF, Scottish Power, Shell Energy, E.ON, Ampoule and SGN.
Companies are known to have very diverse views on the scale of the UK energy challenge and how to tackle it, shaped by their business models.
Kwarteng said he would meet again with industry regulator Ofgem on Sunday before holding a roundtable with industry leaders on Monday.
He said he “will remain in constant contact” with his government colleagues to “deal with the wider implications of the global increase in gas prices”.
In Spain, the government has introduced a one-off tax on energy producers and gas suppliers – which generate record revenues – which will be used to create a € 3bn (£ 2.6bn) fund. to help reduce home energy bills.
This is an idea that might be welcomed by energy providers in the UK, but would likely be strongly opposed by companies that have supplier and production divisions.
Dermot Nolan, a former Ofgem chief, warned on Saturday that Britain was likely to face high energy prices for the rest of the year.
He told BBC Radio 4 Today: “It’s not clear to me what can be done in the very short term. Britain has safe and relatively diverse sources of gas, so I think the lights will stay on.
“But I am concerned that it is likely, in my opinion, that high gas and electricity prices will continue over the next three to four months. It is very difficult to see what the government can do directly in this regard.
Two large fertilizer factories that produce CO2 as a by-product in Teesside and Cheshire closed due to the sudden rise in wholesale gas prices.
British Meat Processors Association chief executive Nick Allen said the CO2 was essential for the humane slaughter of livestock and to extend the shelf life of products.
He told the Today show: “If we don’t have the CO2 supplies, on the packaging side which shortens the shelf life of the products going on the shelves at a time when we are really in difficulty because of all the transport problems.
“We really need the government to step in now and do something. “