Frozen food, turkey and chicken supplies could run short as a result of the escalating energy crisis, shoppers were warned last night as the Government called urgent talks with suppliers. Ocado, the online grocer, warned customers it has a “limited stock” of frozen items due to a “UK-wide shortage of dry ice”, while poultry and other meat producers face being unable to cull their animals due to a shortage of carbon dioxide gas. Ranjit Singh Boparan, the owner of Bernard Matthews and 2 Sisters Food Group, said Christmas dinners could be “cancelled” as a sharp rise in natural gas prices has meant two large fertiliser plants in Teesside and Cheshire – which produce CO2 as a by-product – have shut, cutting supply to the food industry. It comes amid concerns that four energy companies could go bust in coming days and part of a spate of bankruptcies set to push up customer bills. Kwasi Kwarteng, the business secretary, will meet the regulator, Ofgem, on Sunday and hold crisis talks with the energy industry on Monday. It follows a round of calls between Mr Kwarteng and major energy suppliers into the evening on Saturday, after which industry sources said he “definitely gets how incredibly serious this is”. “If you are not hedged you are in big trouble,” said the source. “We are into science-fiction levels of prices – if you are trying to secure energy at these prices you risk losing hundreds of millions of pounds.” Four energy suppliers have already collapsed over the latest two weeks, with wholesale natural gas prices about 450pc higher than this time last year and electricity prices hitting £540 per MwH on Monday – about eleven times higher than their record over the latest decade. There are concerns that four more – supplying around one million customers in total – could collapse in coming days due to the soaring prices. Baringa, the energy consultancy, is said to have warned that there could be “less than 10 suppliers” by the end of winter, compared to about 50 now. The small players who have rushed into the market in recent years are likely to be most at risk.
Telegraph 18th Sept 2021 read more »
Simon Heffer: Environmental hubris has left Britain vulnerable to Putin’s gas blackmail. Of course Russia will take advantage of Britain’s shocking failure to safeguard its energy security. The Government’s utopian approach to environmentalism – including the end of coal power, shunning fracking, and demanding we drive electric vehicles powered by renewable energy – has always come at a cost. But seldom has that cost been so painful as that exacted by Russia’s apparent rigging of the price of gas through its supply company Gazprom. Preening ourselves about our green credentials, and thus choosing not to exploit huge gas resources under our land and in our own waters, we have made Britain enormously vulnerable. We foolishly talk up our ability to be powered by renewables – a form of electricity generation that has yet to meet the rhetorical claims politicians make for it. Instead, we are at the mercy of Russia’s decisions about the price of gas: and our vulnerability increases as other factors harm our power supplies.
Telegraph 18th Sept 2021 read more »
Soaring wholesale prices have closed five small suppliers since early August due to inadequate hedging strategies or weak balance sheets that could not cover the cost of energy committed to supply. There is growing concern among the CEOs of major suppliers that five companies, including People’s Energy and Utility Point, have 570,000 domestic customers and are just the tip of the iceberg. “By the time winter comes, we could have less than 10 suppliers,” said Baringa, an energy consultancy. As of the end of March, there were still 49 domestic suppliers, according to the latest market share data available from Ofgem.
FT 18th Sept 2021 read more »
‘Don’t panic’: business minister bids to calm crisis fears as UK gas prices soar. No cause for alarm now, says Kwasi Kwarteng as energy discussions are likened to early Covid crisis talks. The government was scrambling on Saturday night to reassure Britons that rising gas prices would not plunge the country into an energy crisis, as ministers held a series of emergency meetings with energy companies and regulators to establish whether the nation could keep the lights and central heating on this winter. A senior industry insider likened the meetings held between the business secretary, Kwasi Kwarteng, and energy industry leaders to the early crisis talks held following the outbreak of Covid-19. In a statement on Saturday, the business secretary went to some lengths to try to reassure the public, saying there was no cause for immediate concern. “I was reassured that security of supply was not a cause for immediate concern within the industry,” he said. “The UK benefits from having a diverse range of gas supply sources, with sufficient capacity to more than meet demand. The UK’s gas system continues to operate reliably and we do not expect supply emergencies this winter.” He said protecting customers and energy security were both “an absolute priority”, and Ofgem would ensure that customers of firms that went bust would continue to receive gas and electricity. “We are confident supply can be maintained,” he added. “Our largest single 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.” Dermot Nolan, a former chief executive of Ofgem, said the increases were the result of depleted stocks following a cold winter last year, reduced supply from Russia and increased demand for liquefied natural gas from the far east. He told the BBC Radio 4 Today programme: “It is not obvious to me what can be done in the very short run. Britain does have secure, relatively diverse sources of gas, so I think the lights will stay on. “But I am afraid it is likely in my view that high gas and high electricity prices will be sustained for the next three to four months.” Ofgem has already increased the price cap from an average of £1,138 per year to £1,277 from next month for someone on a standard variable tariff. The next official review is in April, when it may rise above £1,500, according to The Energy Shop price comparison website.
Observer 8th Sept 2021 read more »