Winter has come early for the Government’s energy policy. Although temperatures have only just begun to dip, certainty over whether the UK is prepared for the cold has already plunged. In the space of one week, major policies affecting Britain’s gas and electricity supplies have been thrown into doubt. A European court ruling has brought a cornerstone scheme designed to keep the lights on to an immediate standstill. Meanwhile, Brexit fears have reignitedThe move threatens a return of price spikes over the winter, which could be made worse by growing fears over access to gas supplies. Behind closed doors, the industry is calling on ministers to prioritise policies which can help to keep a lid on prices. The growing reliance on foreign sources for gas does little to calm jitters that the UK could be held to ransom amid a winter gas supply crisis. It has just 1.5bn cubi c meters of gas storage capacity, or 2pc of the total gas system, following the closure of the Rough gas storage facility in 2017. concerns over Britain’s decision to forego investment in gas storage facilities.
Telegraph 17th Nov 2018 read more »
Electricity prices could double after the government suspended the UK’s system for ensuring there is a back-up power supply, experts have warned. The wholesale power price could hit £121 per megawatt hour (MWh) by next winter unless the so-called capacity market is reinstated, according to a report – risking higher energy bills for millions. The government suspended the capacity market on Thursday after the European Court of Justice (ECJ) found it breached state-aid rules. Under the mechanism, which had originally been cleared by the European Commission, power stations are subsidised to be on standby to provide extra electricity for the UK’s main network immediately, if needed. Some businesses are also paid to be ready to reduce their energy use when needed. However, payments and auctions have now been suspended while the government tries to find a way to re-establish the scheme. If no solution is found, projects could be pulled as they might no longer be economically viable, and prices could be pushed up by limits on supply. Prices on future electricity contracts leapt by an average of £1.40 per MWh on the day after the announcement, experts said. Analysts at the think-tank Aurora Energy Research forecast power prices next winter of about £60 per MWh if the capacity market is reinstated, but up to £121 if it is not. On Friday, the power price was £55. Energy suppliers tend to pass on to customers the cost of power by hiking bills. Many are already running on low margins following a spike in the wholesale gas price over the summer.
Times 18th Nov 2018 read more »