DEEP FREEZE
Power crisis as demand for gas soars and storage warnings ‘ignored’
BRITAIN was on the brink of running out of gas yesterday — hit by a perfect storm of freezing weather and problems with supply despite being warned that a situation like this was possible.
Factories cut production after the National Grid offered them cash to use less energy.
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That meant homes got enough gas.
And the Government urged families: “Do carry on using your heating and cooking meals as normal.”
Demand was a third higher than normal for early March. The cold snap means it is up across Europe.
But yesterday’s crisis could have been averted if British Gas owner Centrica had not been allowed to shut the UK’s biggest gas storage plant before Christmas.
Update: A red warning forecasting a 'risk of life' was issued on Thursday by the Met Office as Storm Emma continued the freezing conditions and brought threats of more snowfall
The facility at Rough off East Yorkshire accounted for 70 per cent of our stores, and at any one time it could hold enough gas to power 2.5million homes for a year.
The Energy and Utilities Alliance warned the Government not to allow the closure of Rough. Its chief executive Mike Foster said: “We repeatedly said situations like this would happen. Sadly we’ve been proven right.
Yesterday there were also short-term supply issues with gas fields in the North Sea and Norway.
A terminal was down in Barrow, Cumbria, and there was a problem with a pipeline from Holland.
Tom Marzec-Manser, of analysts ICIS, said: “All these little things add up when demand is so much higher than it should be at this time of year.”
At one point yesterday the wholesale price of gas soared by five times more than normal. But it will not affect the prices families pay because energy firms buy it in advance.
National Grid has already offered one unnamed major gas user around six time the usual price of gas to cut their demand later today, according to
Dozens of major businesses across the UK will have been asked to cut back on consumption to ease the crisis, according to Jeremy Nicholson, director of the Energy Intensive User Group.
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But he warned any compulsory shut-off of gas would be "extraordinarily damaging" to the UK economy.
He said: "There is nothing wrong with industry cutting consumption as long as it is for a short period of time.
"We would be alarmed if there was a compulsory cut off of gas - that would be extraordinarily damaging to the British economy but the signal given to the market today does seem to be working."
As well as the plunging temperatures hiking up demand, the issue has been made worse by supply problems in the Netherlands and Norway.
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The UK is far more vulnerable to gas supply shocks since the Government agreed to let the country's main gas storage facility at Rough shut down last year.
This afternoon energy minister Claire Perry urged households not to panic and to "carry on as normal."
She said: "The National Grid is following a standard procedure and people’s domestic supplies won’t be affected.
"I have spoken to National Grid this morning and we are in constant contact to monitor the gas supply throughout this extreme weather. So do carrying on using your gas heating and cooking meals as normal."
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Half the UK’s gas comes from Europe and the rest from North Sea oil fields. The UK was self-sufficient in North Sea gas until 2004.
The last time National Grid issued a warning like this was in 2010.
In 2013 the Government refused to subside storage facilities.
Foster said “Gas storage facilities work by buying gas when it is cheap in the summer, and then selling it when it is expensive in the winter.
“We have been left incredibly reliant on imported gas and are vulnerable to situations like this.
“The result is to ramp up the price of gas — it is currently around six times what it was two days ago.
“This hits big industry, especially the ceramics industry, who have to pay the hourly rate.
“This will lead to staff being laid off for the day and will have a huge cost for the industry.”
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National Grid data showed Britain's gas demand was almost 35 percent higher than usual for this time of year on Thursday.
On Thursday morning, wind power - rather than gas - was generating the largest share of the UK's electricity supplies too.
Wind was responsible for 27.4 per cent of supplies, compared to 24.8 per cent for gas.
The wholesale gas price in the UK more than doubled on Wednesday to their highest level in 10 years, with prices soaring by 108 per cent.
Mark Todd, of Energy Helpline told The Sun Online that it would be unlikely that households could see a rise in their bills because of the cold-snap.
He said: "Normally it will take much longer than a week or two weeks of cold weather to push prices up, so we're not expecting that.
"But what you might see is some suppliers pulling some of their cheapest deals from the market, so if you are thinking of switching supplier to a cheaper deal you should do it now."
More on money
A spokesman got the Department for Business, Energy and Industrial Strategy (BEIS) said: " We would not expect this short-term increase in wholesale prices to feed through to household bills – energy suppliers typically buy their energy over several months to help smooth out price fluctuations, thereby insulating consumers from price volatility.
"Households should not notice any disruption to their supply.
"A Gas deficit warning is not triggered because the country is short of gas, but is one of the short term measures that the National Grid can take to make sure supply meets demand."
If you are elderly and are worried about paying your energy bills, there is help available.
The winter fuel payment is worth between £100 and £300 depending on your circumstances, while you could also be entitled to cold weather payments too.
Back in 2013, the Government refused to subside gas storage facilities, which could have save consumers almost £1billion over 10 years.
The UK has a lower amount of storage capacity than other European countries - and these facilities could provide extra winter supplies when demand is at its highest.
Meanwhile last year British Gas owner Centrica closed the UK's largest storage plant, sparking fears the country would face more volatile prices over the winter months and become more reliant on imports.
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