YESTERDAY, the wholesale price of gas surged to a record high after one of the only three pipes used to import natural gas into Britain was shut down after encountering a fault.
Was this just an accident? No, it is only the latest in a predictable series of energy supply problems that indicates Britain’s power system is increasingly vulnerable to interruption. The days when the UK enjoyed energy self-sufficiency from North Sea oil and gas, backed up by efficient nuclear power stations, is long gone. Unfortunately, successful governments have only fretted about the problem without actually doing very much about it.
Gas is Britain’s main domestic energy source. But a steady decline in North Sea output has made us reliant on imports, so far mostly from Norway. However, even Norway is struggling to fill the gap, leaving the UK scrabbling for gas on the world market. Any interruption to supply is therefore dangerous and expensive. This has been obvious for more than a decade. Yet Britain still has only one-eighth of the gas storage capacity of Germany to act as a back-up in case of emergency.
Meanwhile, Britain’s older generation of nuclear power stations are reaching the end of their operational life. Yet we are still reliant on them for 20 per cent of our electricity. Despite grandiose plans from the last Labour government and the current coalition to replace these plants, private investors are balking at the cost and risks. There is little hope that replacement nuclear plants will be available when the old stations close in the 2020s.
Despite massive subsidies, wind power provides only 10 per cent of the country’s electricity – and only when the wind is blowing. Wind energy cannot replace gas or nuclear as baseload. It is also expensive to produce, as consumers are finding out. The political focus on renewables, while correct from an environmental standpoint, has diverted attention from solving the twin problems of gas security and replacing the older nuclear power stations. Britain desperately needs an energy plan that is affordable and which is reasonably quick to institute. This demands a mix of energy sources to avoid being too dependent on any one, imported or otherwise. Nuclear could be part of the mix but the cost (£14 billion per plant) is possibly prohibitive. Wind power is here to stay but is no panacea. Which brings us back to gas. Britain needs larger stored gas reserves to avoid the sort of insane price spike that occurred on Friday driven by the pipe problem and the huge unseasonal demand. We may also need to consider exploiting domestic supplies of shale gas through so-called fracking, though environmental safeguards have to be in place.
No solution to our energy problems will be perfect. All entail risk and cost. But one thing is for sure: if we spend another decade talking about the energy gap and doing nothing about it, the lights really will go out.
Law debate puts homebuyer at risk
The Law Society of Scotland, aka the lawyers’ trade union, has just voted in favour of changing its current rules that allow a solicitor to act for both a buyer and mortgage lender in the same property transaction.
The society says this is to avoid potential conflicts of interest and pressure from lenders. It has a point, as lawyers often do. However, few such conflicts of interest have arisen and the Council of Mortgage Lenders has condemned the change, arguing that dual representation will cost buyers more money. But big mortgage lenders in England have a history of forcing house buyers to accept solicitors from their own approved lists. Who is right?
It is understandable that Scots solicitors, especially in small practices, feel they are in danger of being squeezed out of the conveyancing business by big mortgage lending firms. Equally, lenders are right to worry about the need for a profession legal service when property transactions are becoming more complex. Unfortunately, it is the ordinary homebuyer who is in danger of being left out of the debate.
It is understandable if purchasers feel their interest and their wallets are being sacrificed in a turf war between lawyers and mortgage providers at a time when families are already counting every penny.
One solution would be for the Law Society of Scotland to hold further talks with the Council of Mortgage Lenders, to see if an accommodation can be achieved. There is no need to rush to judgment on this issue. Especially because anything that adds to the cost of house purchases in a fragile property market will cause buyers to think twice. And that will do no-one any favours.