The Telegraph: Gas is running low as chill continues21/03/2013
The coldest March in decades is putting a strain on the supply of stored gas, according to a fresh analysis that predicts reserves could be depleted as soon as April 8.
With the Met Office forecasting that the cold weather will stretch into April, analysts said that Britain may be forced to reduce gas supplies to big business customers. The analysis of supplies also heightens concerns over how Britain will meet its future energy needs.
Those fears were added to yesterday when SSE, one of the largest electricity suppliers, said the Government was badly underestimating the risk of a power shortage in coming years.
“The Government is significantly underestimating the scale of the capacity crunch facing the UK in the next three years,” said Ian Marchant, SSE’s chief executive.
“There is a very real risk of the lights going out as a result.”
SSE’s prediction came as the company announced plans to close a quarter of its unprofitable and polluting plants. The more immediate need may be to find ways of bolstering gas reserves should the cold weather persist.
Britain retains about 15 days’ worth of energy demand on hand compared with roughly 100 days for France and Germany.
Analysts said companies could import liquefied natural gas from Qatar – the world’s biggest producer – but that would take about two weeks to arrive by ship.
The Department of Energy and Climate Change said it was monitoring the situation. The rapid depletion of stored gas is expected to put more pressure on the Government to accelerate the development of nuclear power plants that it has said will play a central role in providing the future energy needs.
The warning from SSE echoes that made last month by the head of Ofgem, the energy regulator, as supply pressures force up energy prices.
“I don’t think you’ll see the lights go out,” said Iain Turner, an analyst at the investment firm Exane BNP Paribas. “I think you’ll see volatility in the prices.”
With household incomes falling in real terms, solving the long-term energy needs is becoming a political priority.
John Hayes, the energy minister, disputed accusations that the Government was being complacent. “We’re alive to the challenge facing us,” he said. “The amount of spare power available today is currently comfortable.”
EDF, the French power company building two nuclear plants, warned the Government this week that they would only become a “reality” if subsidies were agreed for the £14 billion projects.
However, the Budget also underlined that the Government was betting shale gas would help meet the energy needs.
George Osborne announced a new tax regime designed to encourage companies to drill for the gas trapped deep underground in rock formations.