UK vows to protect gas consumers from price spike
The UK has prepared a plan to ensure that supplies of gas and power will continue to consumers uninterrupted in the event of a supplier going bankrupt amid record high wholesale prices, secretary for business, energy and industrial strategy Kwasi Kwarteng said on September 19.
A sharp increase in gas demand and supply constraints have driven wholesale gas prices in Europe to record heights, with futures for October at the Dutch TTF touching $950/'000 m3 on September 15. This has led to a number of small-sized energy retailers to cease trading.
Kwarteng had a meeting on September 19 with the CEO of energy regulator Ofgem, Jonathan Brearley, to discuss the crisis.
The CEO "has assured me of the well-rehearsed plans in place to protect the market and consumers," Kwarteng said. "I understand this will be a worrying time for businesses and consumers. We are working hard to manage the impact of global gas price rises...if a supplier fails, Ofgem will ensure customers' gas and electricity supply will continue uninterrupted."
"Our priority is to protect consumers," he continued. "If a supplier of last resort is not possible, a special administrator would be appointed by Ofgem and the govt. The objective is to continue supply to customers until the company can be rescued or customers moved to new suppliers."
The minister also noted that the Energy Price Cap shielded customers from sudden increases in gas prices this winter, while initiatives such as the Warm House Discount, Winter Fuel Payments and Cold Weather Payment, also provided some relief.
"Energy security will always be our priority. The UK benefits from having a diverse range of gas supply sources – both domestic, and from reliable import partners such as Norway," he continued. "I am confident security of supply can be maintained under a wide range of scenarios."
He added he had also met with the CEO of CF Industries, the biggest supplier of CO2 in the UK, to discuss ways that energy supply to the business can be maintained. CF Industries announced on September 15 it had halted operations at both its Billingham and Ince complexes in response to high gas prices.