RUS | ENG | All
Enter the email or login, that you used for registration.
If you do not remember your password, simply leave this field blank and you will receive a new, along with a link to activate.

Not registered yet?
Welcome!

2022-07-08 14:25:00

BRITAIN'S ENERGY CRISIS

BRITAIN'S ENERGY CRISIS

PLATTS- 07 Jul 2022 - Whoever becomes the UK's next prime minister will have a big "to do" list from the moment they enter Downing Street. A full-blown cost of living crisis, looming economic recession, and preventing war on the borders of Europe spreading will be top of their agenda. For Prime Minister Boris Johnson's eventual replacement, energy security is the solution for all three problems.

However, Johnson plans to remain a caretaker prime minister until the autumn, leading what will effectively be a "zombie" government unable to pass vital legislation ahead of winter. By the time a successor is selected, it will probably be too late to avoid the UK heading into a winter energy crisis with household energy bills spiraling further out of control. Gas prices and storage levels point to the need for a quick decision on boosting the UK's gas buffers and locking in long-term supplies is critically important.

The UK's gas storage capacity is tiny when compared with most of Europe. The UK has just 0.9 Bcm of gas storage relative to around 80 Bcm of annual consumption, compared with Europe which has roughly 105 Bcm of gas storage, equal to 22% of annual utilization, according to industry body Offshore Energy UK.

Britain's gas buffer, even with the luxury of three operating LNG import terminals, has been described as reckless.

With Europe's benchmark TTF day-ahead gas price assessed by Platts at Eur174/MWh July 6, up 165% since the start of the year, action is urgent. Reopening the offshore Rough storage site, closed during the government of Theresa May in 2017, looks a quick win to reverse what now appears to have been a short-sighted decision for any new political leader, although it would not be without its technical challenges and the site would not likely be available before the coming winter.

Importing more LNG at "eye-watering" high market prices is only a short-term fix. Although the UK has the infrastructure to import more LNG than most of its counterparts in Europe, these supplies won't come cheap. Spot prices have doubled in the last six months. The Platts JKM spot LNG benchmark price for August was assessed at $42.474/MMBtu July 7, S&P Global Commodity Insights data showed.

"Eye-watering gas prices are hitting consumers across Europe," said Business and Energy Secretary Kwasi Kwarteng on July 7, the day Johnson agreed to step down as leader of the Conservative Party. "The more cheap, clean power we generate within our own borders, the better protected we will be from volatile gas prices that are pushing up bills."

Although Kwarteng -- himself a potential candidate to succeed Johnson -- is aware of the problem, his ability to solve it will likely be impeded by a parliamentary logjam caused by political infighting in his own party and a bruising three-month leadership contest. Kwarteng's landmark Energy Security Bill could be the first victim of the political stasis in Westminster, which is likely to follow on from Johnson's resignation on July 7 and ensuing leadership contest.

The bill, presented to parliament July 6 requires parliament's approval and includes 26 measures ranging from support for low carbon technologies to new powers to prevent disruption to fuel supply on grounds of national security. However, significantly boosting gas storage with a major injection of public investment into infrastructure wasn't amongst the solutions included in the legislation.

Either way, the bill could struggle to receive enough backing from MPs, with many of the ruling Conservative Party likely to vote against any of Johnson's policies until a new leader is selected and the opposition wanting to force a vote of no confidence in the government and ensuing general election. Another scenario, of course, is Johnson even managing to survive as prime minister if the political landscape changes.

All of this, leaves UK energy security in limbo until the winter, by which time the problem may be too late to fix.

------


Earlier:

BRITAIN'S ENERGY CRISIS
2022, June, 22, 09:30:00
BRITAIN'S FUSION DEVELOPMENT
The Office of Nuclear Regulation is responsible for the regulation of the safety and security of nuclear installations in the UK. However, fusion reactors are not prescribed installations for the purposes of the Nuclear Installations Act 1965.
BRITAIN'S ENERGY CRISIS
2022, June, 22, 09:25:00
BRITAIN'S NUCLEAR HYDROGEN
A single nuclear power plant has the potential to generate enough hydrogen to decarbonise the heating of one million homes or 40,000 hydrogen buses from a site no more than a few square miles in size, with technology that is available today.
BRITAIN'S ENERGY CRISIS
2022, June, 16, 12:25:00
BRITAIN'S NUCLEAR PROGRESS
The UK Department for Business, Energy & Industrial Strategy (BEIS) said on 14 June that the government had published documents which show significant progress towards implementing a new funding model which will give nuclear projects the financial support they need and attract private investment.
BRITAIN'S ENERGY CRISIS
2022, June, 2, 11:10:00
BRITAIN'S NUCLEAR STOP
Hinkley Point B started operations in 1976 and, in 2012, the estimated end of its generation was extended to 2023, with a +/- 2 years proviso.
BRITAIN'S ENERGY CRISIS
2022, May, 25, 11:10:00
BRITAIN'S ENERGY SHOCK
The energy price cap is likely to soar to a record £2,800 ($3,499) in October, Ofgem Chief Executive Officer Jonathan Brearley told a panel of lawmakers on Tuesday.
BRITAIN'S ENERGY CRISIS
2022, May, 17, 13:15:00
BRITAIN'S TRANSPORT DECARBONIZATION
Truck manufacturers and the freight industry would benefit from a future on-route charging and hydrogen re-fueling system on Britain's motorway (freeway) network.
BRITAIN'S ENERGY CRISIS
2022, May, 16, 11:45:00
BRITAIN'S NUCLEAR DEVELOPMENT
In early April, the government published its Energy Security Strategy, setting out its ambitions for eight new reactors, plus small modular reactors, helping to produce 24 GWe of nuclear generating capacity by 2050, representing about 25% of the UK's projected electricity demand.
All Publications »
Tags: BRITAIN, ENERGY, GAS,