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Do not worry: Business minister seeks to calm fears of crisis as UK gas prices rise | Energy bills

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The government was trying Saturday night to reassure the British that rising gas prices would not plunge the country into an energy crisis, as ministers held a series of urgent meetings with companies and energy regulators to determine if the nation could keep the lights on and central heating turned on this winter.

An industry insider likened the meetings held between business secretary Kwasi Kwarteng and energy industry executives to the early crisis talks held after the Covid-19 explosion.

Gas prices rose by more than 70% in August alone, and the shock has driven energy companies and heavy industrial firms out of business. According to some estimates, households could see energy bills rise to 400 a year. Lack of carbon dioxide, a by-product of heavy industry, means food shortages will become sharper because meat producers use it to slaughter animals humanely.

After eight hours of face-to-face discussions, Kwarteng announced further talks Sunday with regulator Ofgem and on Monday will meet again with industry leaders to find ways to keep the industry afloat and prevent millions of people from falling into poverty. fuel. High natural gas prices have driven out seven power suppliers this year and the BBC reported on Saturday night that four more could go next week.

Kwarteng is also working with other ministers to avoid further effects of the gas crisis. The food and beverage industry is already facing a shortage of carbon dioxide as rising gas prices forced two garbage plants to close. Owner Bernard Matthews has said the lack of carbon dioxide means Christmas will be canceled.

In a statement Saturday, the business secretary tried to reassure the public, saying there was no reason for immediate concern. I made sure that security of supply was not a cause for immediate concern within the industry, he said.

The UK benefits from a diverse range of gas supply sources, with sufficient capacity to meet more than demand. The UK gas system continues to operate reliably and we do not expect supply emergencies this winter.

He said customer protection and energy security were an absolute priority, and Ofgem would ensure that customers of shattered firms continue to receive gas and electricity.

We are confident that the supply can be saved, he added. Our largest source of gas is from domestic production and the vast majority of imports come from reliable suppliers such as Norway. We are not dependent on Russian oil and gas.

Ministers from across the government will step down to manage the wider implications of rising global gas prices, he said.

An industry insider said the business secretary intended to hold up to 20 one-on-one meetings with energy industry leaders this weekend as an intelligence gathering exercise to find out how bad things can be.

The government is understood to be open to considering short-term measures to help companies and households cope with the impending winter energy crisis, but may also consider a long-term jolt to accelerate the UK’s shift from fossil fuels and to address fragility in the energy retail 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 risen globally after a long winter in which gas stores in Europe and Asia were severely impoverished. Storage levels remain well below average and gas imports to Europe from Norway, Russia and the Middle East have slowed.

In the UK, rising gas prices have led to record electricity market prices because the UK relies on gas-fired power plants to produce almost half of the electricity. Low wind speeds have reduced renewable energy production in the UK, and a range of problems at UK power plants and a main cable connecting the UK to France have forced higher market prices. The rocket price of gas has also caused a slowdown across Europe for some fertilizer-producing chemical plants, a by-product of which is carbon dioxide, used in carbonated beverages and beer, as well as in the meat industry to stun animals before slaughter.

a gas pot flame
Ed Miliband, shadow business secretary of the Workers, said the rise in prices was part of a cost-of-living crisis. Photo: Gareth Fuller / PA

Fertilizer plants in Teesside and Cheshire have already closed. Ranjit Singh Boparan, owner of Bernard Matthews and 2 Sisters Food Group, said the supply of turkeys at Christmas could not be guaranteed. Co.2 the issue is a massive blow to the body and puts us at the breaking point, indeed it is poultry, beef, pork, and the wider food industry.

Dermot Nolan, a former Ofgem chief executive, said the increases were a result of impoverished stock following a cold winter last year, declining supply from Russia and rising demand for liquefied natural gas from the Far East.

He told BBC Radio 4 today program: It is not clear to me what can be done in a very short time. Britain has safe, relatively diverse sources of gas, so I think the lights will stay on.

But I fear that it is likely in my opinion that high gas and high electricity prices will be maintained for the next three to four months. Ofgem has already raised the price limit from an average of 1,138 per year to 1,277 from next month for someone with a variable standard rate. The next official review is in April, when it could rise above 1,500, according to The Energy Shop price comparison website.

Ed Miliband, shadow business secretary of the Workers, said the price increase was part of a cost-of-living crisis that underscored the need to cancel governments scheduled 20 per week to cut universal credit.

Failure is a fundamental failure of government long-term planning over the past decade that we are so exposed and vulnerable as a country, and it is businesses and consumers who pay the price, he said.

If we had invested enough in various, safe, zero carbon energy supplies and making energy efficiency a much bigger priority, we would not be in such an uncertain position.

Darren Jones, chairman of the Commons elected business committee, said: “We have known for a long time that the UK is highly dependent on imported gas. Low-income consumers need targeted help this fall / winter. And ministers need to take a step towards building a more resilient and sustainable energy system in the UK.

With around 80% of the UK’s 27.8 million households connected to gas supply, the UK relies heavily on natural gas.

Almost half comes from the North Sea plains, with most supplied through pipelines from Norway. But North Sea production will be halved by 2027, according to OGUKs Will Webster.

Letting production fall faster than we can reduce the risks of demand by leaving us increasingly dependent on other countries, and at the mercy of global events over which we have no control, he said.

Countries such as Germany rely much more on gas from Russia, and the nearly completed Nord Stream 2 pipeline under the Baltic Sea has been a source of concern for NATO countries concerned that it will give Vladimir Putin some political clout.

Gazprom, Russia’s state-owned energy company, was accused by 42 members of the European Parliament from across the political spectrum of deliberately manipulating the market last week after they demanded that the European Commission investigate.

Energy UK, which represents energy suppliers, said the firms will provide people with additional support this winter.

Ofgem said record prices were obviously putting pressure on companies and there were processes to help customers of companies that failed.

Sources

1/ https://Google.com/

2/ https://www.theguardian.com/money/2021/sep/18/dont-panic-business-minister-bids-to-calm-crisis-fears-as-uk-gas-prices-soar

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