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Demand for natural gas in the UK soared during the coldest March in 50 years. This has led to a supply shortage, and some experts to suggest that Britain’s gas supplies could actually run out by the 8th of April, forcing them to import from Norway and Russia at far higher prices.
Whilst the government has been championing a “dash for gas” which has seen demand for the fuel increase significantly, they have done little to increase the storage capacity in the country. After the month of higher than expected demand the UK now only has a two day’s supply in reserve.
Ian Marchant, the chief executive of Scottish and Southern Energy, one of the UK’s largest power suppliers, commented that, “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.”
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This news acts as a blow to Chancellor George Osborne, who has been the driving force behind the “dash for gas” that would see natural gas become the number one power source in the UK.
Marchant offered a solution, stating that “the government can reduce this risk of power cuts very easily, by taking swift action to provide much greater clarity on its electricity market reforms.”
But Andrew Pendleton, the head of campaigns at Friends of the Earth, warned of the risk “that these companies are holding us to ransom, in order to make the environment more favourable to their forms of generation. There is a lot at stake here. Basing our energy strategy on gas rather than clean forms of energy such as renewables means we could be held to ransom more and more in the future in this way. It could do a huge amount of harm.”
The government must be carfeul, but they must also act quickly, any delays could see the UK in dire trouble within just a few years.
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com