• 4 minutes Europeans and Americans are beginning to see the results of depending on renewables.
  • 7 minutes Is China Rising or Falling? Has it Enraged the World and Lost its Way? How is their Economy Doing?
  • 13 minutes NordStream2
  • 2 days Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav
  • 2 hours California to ban gasoline for lawn mowers, chain saws, leaf blowers, off road equipment, etc.
  • 14 hours "Here is The Hidden $150 Trillion Agenda Behind The "Crusade" Against Climate Change" - Zero Hedge re: Bank of America REPORT
  • 21 hours "A Very Predictable Global Energy Crisis" by Irina Slav --- MUST READ
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 20 hours An Indian Opinion on What is Going on in China
  • 1 day Can Technology Keep Coal Plants Alive and Well?
  • 2 days Two Good and Plausible Ideas about Saving Water and Redirecting it to Where it is Needed.
  • 2 days Succession Planning in Human Resources for Vaccinated Individuals in the Oil & Gas Industry
  • 4 days Perfect Energy Storm in Europe: turning our back on fossil fuels is easier said than done!
  • 18 hours U.S. : Employers Can Buy Retirement Security for $2.64 an Hour
  • 23 hours Storage of gas cylinders
  • 4 days Nord Stream - US/German consultations

Gas Crunch Threatens UK Energy Industry With Wave Of Bankruptcies

The UK energy industry is facing a wave of bankruptcies amid a gas supply crunch that has sent electricity prices soaring, leaving suppliers vulnerable.

Since the start of the year, seven electricity suppliers in the country have gone under, Bloomberg reports, because of failing to hedge against price hikes. This meant that they sold electricity to clients at lower prices than the current ones. They must now buy it expensively and then sell it cheaply, which is the fastest way to bankruptcy.

As a result, the industry has called on the government to help with an emergency financing package of several billion, as well as a provision to take on unprofitable clients from bankrupt energy suppliers.

Prime Minister Boris Johnson has called the problem temporary, saying it was the result of recovering economic activity after Covid-19 lockdowns.

“They [the problems] are caused by the resurgence of the global economy as Covid starts to retreat in parts of the world,” Johnson said, as quoted by the Financial Times. “Particularly in Asia there is a phenomenal demand for gas — LNG in particular. And you’re seeing that demand affect supply around the world. As the world economy starts firing on cylinders — to use a hydrocarbon metaphor — things will start to smooth out.”

Until things smooth out, however, British businesses and consumers are facing much higher electricity bills than normal. With the crunch showing no signs of abating anytime soon, temporary might come to mean prolonged. The same is true for much of Europe.

“It could get very ugly unless we act quickly to try to fill every inch of storage,” according to Marco Alvera, chief executive officer of Italian energy infrastructure company Snam, as quoted by Bloomberg. “You can survive a week without electricity, but you can’t survive without gas.”

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage



Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News