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Business Secretary reassured that gas supply ‘not cause for immediate concern’

·4-min read
Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng (PA) (PA Wire)
Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng (PA) (PA Wire)

The Business Secretary has said there is no “cause for immediate concern” over the supply of gas in the UK following meetings with industry leaders.

Kwasi Kwarteng had said energy security is “an absolute priority” as he prepared to hold talks on Saturday amid concerns about a rise in wholesale gas prices.

The rise has been blamed on high global demand, maintenance issues and lower solar and wind energy output.

Mr Kwarteng spoke to chief executives from energy suppliers and operators to discuss the extent of the impact of surging prices.

He tweeted: “Today, I’ve held a series of individual meetings with senior executives from the energy industry to discuss the impact of high global gas prices.

“I was reassured that security of supply was not a cause for immediate concern within the industry.

“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.”

It is understood Mr Kwarteng had talks with senior executives from Ofgem Centrica National Grid, Energy UK, Octopus, Ovo, SSE, EDF, ScottishPower, Shell Energy, E.ON, Bulb and SGN.

He said that protecting customers from huge price rises was “an absolute priority”.

Mr Kwarteng said on Twitter: “The Energy Price Cap exists to protect millions of customers. Initiatives such as the Warm Home Discount, Winter Fuel Payments and Cold Weather Payments will help further.”

The Business Secretary added he was confident energy security could be maintained while also increasing the usage of renewables.

He said: “Energy security is an absolute priority. We are confident supply can be maintained.

“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.

“However, our exposure to volatile global gas prices underscores the importance of our plan to build a strong, home-grown renewable energy sector to further reduce our reliance on fossil fuels. Renewable energy has quadrupled since 2010, but there is more to do.”

Mr Kwarteng said he would meet industry regulator Ofgem again on Sunday before organising a roundtable with industry leaders on Monday.

He said he will “remain in constant contact” with colleagues across Government to “manage the wider implications of the global gas price increase”.

A former head of the regulator Ofgem warned Britain is likely to face high energy prices for the rest of the year.

Dermot Nolan, a former Ofgem chief executive, said the increases were the result of depleted stocks following a cold winter last winter, 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.

“It is very difficult to see what the Government can do directly in this regard.”

Earlier, Ed Miliband, Labour’s shadow business secretary, said: “A basic duty of Government is to ensure secure, affordable energy supplies for businesses and families.

“It is a fundamental failure of long-term Government planning over the last decade that we are so exposed and vulnerable as a country and it is businesses and consumers that are paying the price.

“If we had been investing at sufficient scale in diverse, secure, zero carbon energy supplies and making energy efficiency a much bigger priority, we would not be in such a precarious position.

“Ministers must recognise the severity of the cost of living crisis now facing families as a result of rising energy prices and their unfair tax rise and cancel the cut to Universal Credit.

“They must also ensure security of supply and take the long-term action to put in place a much more robust, resilient and diverse energy infrastructure.”

An Ofgem spokesman said: “Currently wholesale gas prices are at a record high, driven by international supply and demand factors.

“This is undoubtedly putting pressure on companies – with four leaving the market over the last few weeks.

“Ofgem cannot comment on whether further suppliers will fail, but we have the systems and processes in place to ensure that customer needs are always met.

“For those customers who are with energy companies that can no longer trade, a new supplier will be appointed.

“Ofgem is working closely with Government to manage the wider implications of the global gas price increase.”

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