Low gas supplies spark energy price hike fears

Weeks of unusually cold weather have drained nearly all of Britain’s gas supplies, sparking fears of a spike in energy prices, it has been reported.

Households have been forced to turn up their heating as the freezing weather continues, pushing the demand for gas to 20% higher than normal in March, according to reports.

Last night gas stocks were just 10% full, compared to 49% this time last year, it said.

Energy prices will soar if Britain is forced to make up the shortfall by importing more liquefied natural gas from elsewhere, an energy expert warned.

Shut down

He said that Britain would struggle to cope if a technical problem caused a North Sea gas field to shut down.

Andrew Horstead of the energy consultancy Utilyx said: “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.”

Britain is more vulnerable than other countries to gas shortages because of its small storage capacity, which holds just 15 days worth of energy supplies.

It comes 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.

Closures

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 tightening of the UK’s generation capacity margin that would follow expected plant closures in the next few years, predicting a 1:12 chance of the lights going out.

“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, which highlights that the situation is likely to be even more critical than even they have predicted.”