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News

Gas prices rising after pipeline closure.

An unexpected shutdown at one of three gas pipelines which serve the UK has demonstrated how exposed Britain's energy supply system can be. The price of wholesale gas rose to a record high on the news on Friday, with gas prices jumping as much as 50%. Interconnector UK has indicated that the pipeline is now restored to full capacity, easing market fears about supply and demand. The situation comes as the UK has been enduring very cold weather for a longer period than usual, driving higher demand for gas from consumers. At the same time, gas storage levels are lower at this point in the year as we would expect to be coming to the end of the winter period, but the latest cold snap shows that this is not the case yet. This has led to reports in the media suggesting that the UK could run out of gas within days. The Government has countered these claims, saying that they are misleading, and they have issued reassurances that the country is not solely reliant on its gas storage supplies. North Sea supply and an extensive import infrastructure also form part of the gas supply network. The Government also added that should there be a risk of a supply shortfall, the National Grid is responsible for working with the gas markets to ensure the UK's needs are met. Though current demand is higher than normal, it is not at a level that triggers a danger warning. Even so, industry figures have warned that the UK is vulnerable. With finite storage capacity and a reliance on imported gas, the UK remains exposed to potential shortages and volatile domestic and business gas prices. Should the cold spell continue into April and stored domestic supplies run out, prices are likely to jump up again. Business leaders and energy firms are urging the Government not to underestimate the risk we face and to invest on expanding gas production at home.


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