‘Only minor gas cuts this winter’ regulator reassures power plants |
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Thu, 06 Oct 2005 10:20
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Gas supplies have dropped to their lowest in a decade sparking fears of a bleak winter ahead with severe cuts in supply. Power stations and industrial users particularly cement and ceramic factories and chemical plants, are most likely to be hit by a shortage and subsequent shut-downs.
According to National Grid Transco Plc, the agency which monitors the amount of available energy for regulator Ofgem, the quantity of gas available this winter had dropped from 488 million cubic metres (mcm) last winter to 476mcm this year.
Total peak daily supply could drop from 336mcm (forecast in May’05) to 327 mcm. Additional figures from government sources say domestic natural gas production had also fallen 4.9 percent in the first four months of 2005. If the winter is more severe than expected, then industrial gas consumers such as gas-fired power stations will be turned off to ensure supply to domestic users.
The nation is likely to find its gas reserves strained as its own North Sea resources dry up forcing it to import gas for which the necessary pipeline and storage facilities aren’t yet in place.
Industrial and business users will have reason to criticise the government over its energy policy. Many of them face high energy bills, even 50 percent higher than last winter. The CBI which represents the manufacturing sector, said the government was being complacent over energy and was harping on being a model for liberalised energy supply. The issue has already been raised in a House of Lords report made 18 months ago.
The government is quick to point out its open door policy for foreign utilities groups which allowed groups such as EDF of France and Germany’s RWE and EON to set up power plants in the UK.
A spokesperson of Ofgem said the drop in available gas for winter was hardly cause for concern as it would only mean “a small amount of reduction for large gas users”.
While admitting that gas supplies are lower than last year, Ofgem’s chief executive Alistair Buchanan said they would still be able to supply to domestic customers, even in a severe ‘1 in 50’ winter (the kind of winter that occurs once in 50 years).
Buchanan also rubbished CBI’s accusation that the government was being complacent over the issue.
The shortage in gas supplies has made Britain increasingly dependent on imports.
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