Gas Stockpile Drain Prompts Price Rise Fears
Britain has drained its gas reserves so much after weeks of bad weather that fears have been raised of a looming spike in energy prices.
Households have been forced to increase their heating usage as the freezing weather continues, pushing the demand for gas to 20% higher than normal in March.
Gas stocks were reportedly just 10% full at Britain's largest storage facility on Thursday night, compared to 49% this time last year.
Energy prices will soar if Britain is forced to make up the shortfall by importing more liquefied natural gas from elsewhere, an energy expert has warned.
Andrew Horstead of the energy consultancy Utilyx told the Times: "There is immense pressure on the existing infrastructure.
"We are almost maxed out from imports through pipelines. The big concern is that there is very little flexibility left in the system."
He added that Britain would struggle to cope if a technical problem caused an unscheduled North Sea gas field to shut down.
Matt Osborne, risk manager at energy consultancy and brokerage firm Inenco, told Sky News that wholesale prices had spiked about 20% overnight, prompting the industry to respond quickly.
On Friday morning gas prices for within-day delivery then jumped more than 50% above Thursday's close following the closure of the pipeline linking Belgium to Britain after a pump failed at Bacton, Norfolk.
Downing Street said Prime Minister David Cameron is "confident" that the UK's gas needs will continue to be met.
A spokesman said: "The absolute key thing on this is that supplies are not running out.
"The gas market is how we source our supplies and that market continues to function well.
"The Prime Minister's key concern is that gas supplies continue. It is absolutely clear that supplies are not running out."
Asked if the Prime Minister was confident that this would remain the case, the spokesman replied: "Absolutely confident."
Britain is more vulnerable than other countries to gas shortages because of its limited storage capacity, which holds just 15 days' worth of energy supplies.
But a Department of Environment and Climate Change (DECC) spokesperson insisted that "gas supplies are not running out".
The spokesperson said: "Storage levels are low at the moment - as you'd expect towards the end of winter - and the UK gas market is tight.
"But the market is responding as it is designed to do - gas prices are rising and supply is being maintained accordingly.
"Gas storage would never be the sole source of gas meeting our needs, so it is misleading to talk purely about how many days' supply is in storage."
However, the gas fears come as the head of the energy giant SSE warned of the "very real risk" of the lights going out in Britain.
Ian Marchant said the Government was underestimating the problem, as he announced plans to cut back on power generation at five sites because the stations are either uneconomic or coming to the end of their lives.
He said: "It appears the Government is significantly underestimating the scale of the capacity crunch facing the UK in the next three years and there is a very real risk of the lights going out as a result."
He said the energy watchdog Ofgem had recently expressed real concern about the reduction of the UK's generation capacity margin that would follow expected plant closures in the next few years, predicting a 1-in-12 chance of the lights going out.
Mr Marchant added: "It is unlikely that the majority of the reductions in generation capacity and the delays to new investment we have announced today will have been included in this analysis.
"(This) highlights that the situation is likely to be even more critical than even they have predicted."
The DECC spokesperson added: "We are in close contact with National Grid, who are able to step into the market to source gas and increase incentives on gas suppliers if they think there is a risk of a supply shortfall."
what do you think?
Britain a land of gloom and doom
Britain....the country of doom and gloom. Its a battle between the 'experts' as to who can predeict the most terrible and catastophic forcast, which will be quickly followed by the chancellor putting a tax on predictions.
Quite so Marc, I wonder how long it will be before the so called "experts" on climate change will blame the cold weather on "Global Warming" and demand more money for research. They've been very quiet of late and as you say, they like nothing better than a bit of gloom and doom.............
Oddly enough, Gordon, you are (W)right in saying this is caused by Global Warming, because as the arctic icecap melts (which it most definitely is doing) the extra cold water resulting is changing the course of the Gulfstream, which for decades has given us a warmer climate than we should have at this latitude (roughly the same as New York, which gets terrible winters).
The north pole's ice is decreasing. However the ice cap at antarctic is increasing. Also, there has not actually been any increase in global temperature for the last 10 years. That's why they've gone quiet.
And polar ice drills used to measure the amount of co2 in the atmosphere over thousands of years, show that the amount of co2 in the atmosphere follows temperature rise, not drives it, do you think that during the ice age, ancient humans caused ice to melt through leaving their tv on standby, using the car too much
Yep, because the amount of CO2 man releases into the atmosphere is a tiny % of what our planet naturally produces. There has been warming periods in the last few thousand years - with no significant CO2 increase. There has been periods when the CO2 was TWENTY times higher than it is now - with no huge temperature increase. 30/40 years ago our planet was actually cooling. And some scientists claimed this was man made.
Does this mean we can look forward to reduction in price when gas usage is low? I'll go stand in the corner and give my head a rattle.
Don't be silly...........prices only go up
I never thought I would say this but I am questioning the merits of free market economics there are some things which perhaps demand 'efficient' state control
its not a free market /its a fixed market
Private companies rely on profits to continue their growth, and keep their shareholders pockets and bank accounts full. So they will make any excuse to increase prices. State run companies will employ 3,4,5 or more people to do the job of 1. Result..... Higher wage bill,zero profit, increase prices or close down. Whatever we have it's us poor souls who lose out.
Stephen. It certainly is as far as energy supplies are concerned.They operate a cartel but hold on, didn't the regulator tell us a few weeks ago there was no evidence of this? I will have a pint of whatever he is on.
Interesting replies but note I did say 'efficient' state run not as they were. Yes stephen it gives every appearance on the surface of being a cartel but they obtain their supplies from the same sources so now who is holding the upper hand? We need some real thought into energy sources but getting a think tank that has no vested interests seems to hold as much chance as us all winning the Lotto this week
rebel0931 Can't entirely agree with your employment ratios for state run companies.I worked for a state run electric co,1979-1985.Were never subsidized by the tax-payer and all profits were re-invested in the industry,well apart from the millions taken by the govt of the day,for general expenditure!!
Blue side as we now Import gas, how does the state control the price We no longer have the resources to support the population - immigration must be stopped
Where are these cream of the crop mega bonus earning top talented managers who are apparently incapable of any semblance of forward planning but who have obviously yet again perfected another way of saying 'we're going to screw you'.
vinandgill. You are right its a case of poor planning
hot air is what we need pump it strait from house of commons
It would need to be filtered to remove the bull
And why are the energy cartel crooks not required to have sufficent storage capacity to supply Great Britain through a cold winter? And why don't the "brilliant" minds in parliament have an energy policy for Great Britain that actually works?
John. Because your so called brilliant minds in parliament & the EU have bought into the global warming con in a big way. It is already costing us a fortune and soon we won't be able to get out of the house for useless windmills
Very true John. I was in Spain for a month when on the Costas it was quite cold. There are masses of windmills and when it was the coldest they were still
As an aside but sort of related issue john , you would be surprised how many cabinet members and MPs [all parties] hold directorships/sizeable shareholdings with utility companies responsible for UK supplies - not that for one minute I am cynical enough to suggest any sort of self interest !
Having just 15 days of storage is disgraceful - the strategic reserve for oil is several months. Like Blue Side, I am opposed to state control, but it is beginning to look necessary. We also need to get on with building nuclear power stations as we will soon have an electricity shortage as well.
But NOT the ancient Uranium-fuelled, foreign built/owned ones that the cretinous politicians have signed up to. Thorium-fuelled reactors are inherently safer, use a more plentiful/more easily obtainable fuel which does NOT require expensive processing before use, do NOT create anywhere near as much high-level waste, and can even be used to make existing high-level waste safer by converting it into less dangerous isotopes. They can even be much smaller, hence more quickly, and positioned closer to where the power is actually needed, thus saving a large proportion of the 17% transmission losses. Unfortunately, this is far too sensible/logical for any POLITICIAN to ever agree to!
It was state controlled along with all the utilities until maggie and co sold them off
When the British Public owned the GAS, Electric and Water there was always 25% over capacity in case of war, with them now Privatised they have sold off sites for housing and just imported more and passed the cost onto the consummer. The end is Nigh. on Question Time, Ken Clark made a sarcastic remark to Bob Crow about Opening Coal Pits, The Germans are opening coal power stations and by using new technogy they are very clean. We have a 1000 years of coal under our feet, USE IT!
We've had too many useless plonkers with no forward planning ability for the last 30 years. Even the general public can see whats needed (except the green lobby) re-nationalised utilities,re-open the mines and build the clean coal stations as you suggest Eric,also the gas by product can be used.
to many talkers and not enough doers is the trouble , the people who can do the job are shouted down and ignored
I was thinking: say I had a normal log fire place then suddenly there would be a shortage of logs and logs for fireplaces would cost £100 per bag of logs. Except, they wouldn't be logs because they'd be like catalogue log cabins for gardens, made of, is "prefabricated" the right word? Sections of flat boards with log shapes carved into them. Then, I wouldn't be able to have a metal log fire place because there would only be artificial ceramic or plastic ones. If I bought a prefabricated, DIY log cabin, which I have no intention of doing, made of flat boards, someone would just buy some real logs and make a proper one in a local field, in about one hour. Now I think of it, I did see the other week, on the television about methane gas being made from recycled materials. It could probably be made from compost, also? Why can't we just make gas instead of digging it out of the ground?
Sewerage companies are making gas out of humane waste/land fill .
Previous goverments decided to build gas fired power stations it was said at the time that this was a big mistake. Now we know.
THORIUM REACTORS!!!!!!! Inherently safer than the ancient uranium-fuelled ones the cretinous politicians want foreigners to build (and own!). Fuel is more plentiful, less dangerous to obtain and does not require the expensive pre-processing needed for uranium. Can also be much smaller, built more quickly, and closer to where the power is actually needed, thus saving some of the 17% transmission losses. As a bonus, they produce far less high-level waste and can even be used to convert existing high-level waste into less dangerous isotopes. Of course, this is SO logical and sensible that you will NEVER get a POLITICIAN even considering it ... they're too self-interested, greedy and, lets face it THICK!!!
The power produced would be too cheap to make the market traders cannot make money out of Thorium. You live in a Capitalist country and Bankers must get their bonuses.
And for some reason you didn't think I already knew that the world runs on greed? Why was that, I wonder ...
When our North sea gas first came online in the 90's they were going to give it away. We will be gas sufficient for ever they said. Now what? here we an island still sitting on a sea of coal and what did the mad cow do to the colleries?
she was mad mmmmmmmmmmmmmmmad
I see you have been voted down by a couple of dumb Thatcher fans Fred. She did more damage to this country than Adolf, the present bunch of gobsmiths are just as bad
You only seem to remember the bits of history which suit your point of view. Perhaps you forget that constant strikes by a multitude of separate unions was killing off manufacturing in this country, hence there not being any british-owned car makers here any more, and constant miners strikes engineered by that commie-funded 'B' Scargill were part of that. A hundred years ago, unions were needed, but by the 60s and 70s they were much too powerful and were pricing britain out of world markets; don't you remember the 20+ percent inflation we had for some time???
666, I worked down the mines for 14 years and the only strike I took part in was the 84-85 strike in an attempt to stop the insane mine closure programme. The right wing fairytales about British workers striking at the drop of a hat are just that, fairytales. A strike is a last resort for a worker, you don't get paid when you are on strike. As a single man at the time of the 84-85 Miners strike, I received the grand sum of ten pound a week from union fun ds and an occasional food parcel. Read Seamus Milne's excellent book "The Enemy Within" for a true account of the state propaganda war against the British Coalminers.
Another excuse for a price hike after announcing huge profits
Banking traders in for large bonuses as they shove the market prices up for gas . ONLY IN THE LAND OF DOPES AND TORIES.
why is it when things become in short supply we have to pay more? if a farmer digs up 500 tons of potatoes this year when last year it was 5000 why do we have to pay for his shortfall, simple, we expect in all walks of life the same whatever regardless, GREED!
Steve. Simple economics. If you have 2 people wanting 1 item it goes to the highest bidder and the other person loses out.
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They will use every and any excuse to put the price up and rip us off