Paper boss warns it's 'very, very clear' factories in ALL sectors could close amid energy crisis
By SEAMLESS DAILY
10 October 2021
an industry leaders to warn the government their factories could stop production due to rising energy costs.
Subscribe to ClimateCast on Spotify, Apple Podcasts, or Spreaker Mr Kwarteng met representatives of energy intensive industries on Friday to discuss the crisis affecting wholesale gas, which has rocketed in price by 250 % since the start of the year.
The energy watchdog Ofgem has already warned millions of households should expect to see a "significant rise" in their bills at the next price cap review.
"When the converse situation arises and the wholesale price starts to drop sharply, the price that will be passed through to customers in April might feel like a very, very poor deal, whereas at the moment the price cap feels like a price that is too good to be true."
The UK Government has deep concerns about Nord Stream 2 and its implications for European energy security.
business secretary kwasi kwarteng said yesterday : 'unlike other countries are nearly wholly dependent on russian gas.
In comments reported by The Times, the spokesman also warned about the damage to Ukraine, which currently hosts the largest pipeline network for Russian gas and benefits from large transit fees.
the energy intensive users group ( eiug ) chair, dr richard leese, said he welcomed the opportunity to meet the business secretary and is pleased he wants to find practical solutions to the challenges members face going into this winter.
business secretary kwasi kwarteng has also insisted that by decarbonising the uk's power supply, the government would ensure households are less exposed to swings in fossil fuel markets.
UK Steel boss Gareth Stace told Channel 4 News : "What we ’ re asking Kwasi Kwarteng today to do on wholesale prices is just to step in, to alleviate that pressure in the short term, just like in, say, Portugal or Italy.
He added : 'At the moment, there's an energy crisis.
Experts said the Russian president had substantial scope to boost gas supplies and alleviate the shortages that are causing wholesale costs to soar.
It's up to us, and to the industry and to other companies to try to minimise these price increases. '
Major industrial groups say soaring prices are already forcing some heavy industries, such as steel, fertiliser and brick manufacturers, to scale back production and, potentially, shut down.
They are calling for government support of the kind that was given to banks during the 2008 financial crash.
Supporters claim there is enough shale gas in the UK to support the country's needs for decades.
The technique, also known as hydraulic fracturing, involves pumping water and sand underground at high pressure to fracture the rock and release trapped oil and gas.
While some countries in Europe have to store gas to protect their security of supply, the UK has the best gas storage system in the world ‑ our reserves in the North Sea.
Any investment in nuclear energy today will not provide energy until the 2030s and the UK will need at least two large reactors and ten small plants just to maintain current levels of energy production.
Held to ransom by Putin : Kremlin is accused of hiking gas prices to force Europeans to approve pipeline By Harriet Line Chief Political Correspondent for the Daily Mail Vladimir Putin was last night accused of holding Britain and Europe to ransom over energy prices.
Gas prices have soared in recent months after shortages caused by a prolonged winter in Europe, higher demand in Asia, and reduced North Sea production.
the uk's energy system does not rely on gas from russia.
We are fortunate as a country that we have access to gas in British territorial waters, and from secure and reliable import partners such as Norway.
But crucially, the project is backed by Germany, which puts cheap reliable supplies of Russian gas ahead of the security interests of its east European neighbours.
Plans to add a green tax levy to energy bills are expected to be confirmed in the next two weeks, according to a report in The Times.
the crisis comes amid reports ministers plan to levy new charges on gas, with the times reporting that a new strategy will be published before next month's cop26 climate conference.
It commits the government to cutting the price of electricity by removing green levies and slapping additional costs on gas to fund the switch to low-carbon alternatives.
However, the step is likely to prove controversial, with households already struggling with soaring energy bills in the face of increased wholesale prices, triggered by global demand as economies recover from the coronavirus pandemic.
Earlier this week, Boris Johnson said Britain was aiming to produce "clean power" by 2035 as part of the nation's goal of reaching net zero carbon emissions.
The government will undertake a series of consultations on the carbon reduction plan, which is likely to start in 2023 and could add £170 a year to gas bills, The Times said.
A spokesman for the Department for Business, Energy and Industrial Strategy said : "The UK's exposure to volatile global gas prices underscores the need to move away from fossil fuels to protect consumers in the long term.
"We want to encourage people to take up more efficient technologies such as heat pumps and electric vehicles by removing levies on electricity over time, working with industry to drive down costs of technologies and ensure they are as affordable as current options."
The spokesman added : "We 'll set out our upcoming Heat and Buildings Strategy shortly.
It follows claims that Russia, which supplies much of Europe, is contributing to the volatility of the market by limiting stocks.
The Russian leader "would have been smiling ear to ear" after gas prices fell when he offered to help stabilise the market, said Mr Browder.
He added : "He's up to all sorts of nefarious activities and by having this kind of leverage over us he is hoping people in the corridors of power, here and elsewhere, will say, 'We can't say anything to Putin because if we do he is going to cut off the supply of gas '."
That's why I want to stress that the Energy Price Cap ‑ which sets a cap on the level an energy company can charge a customer ‑ is holding back a wave of instant bill increases for millions of customers.
Keeping this protection in place is non-negotiable for me.
Kwarteng sought to reassure the public of "the safety net that we have in place to shield consumers from instant price hikes this Christmas, and ensure everyone gets the supply they need.
Despite some pushing me to lift the cap, I am absolutely clear it is here to stay and will remain at the same level throughout winter.
Downing Street did not deny reports he had travelled to Spain, and declined to say whether the prime minister was working at No 10 or in Chequers as is commonplace.
Energy firms have warned that suppliers going bust could lead to households being hit with increased costs as they labelled the price cap "not fit for purpose" and “ too good to be true ”.
Paul Richards, the chief executive of Together Energy, which he said was currently making losses, told BBC Radio 4's Today programme : “ The price cap as a mechanism is not fit for industry, nor is it fit for customers.
It comes after Kwarteng held a meeting with leaders in energy-intensive industries, including representatives from the paper, glass, cement, lime, ceramics, chemicals and steel industries, though it is understood the talks failed to produce a solution to the crisis.
Leese said he had proposed three technical solutions at the meeting, asking the government to consider cost containment measures, the distribution of network costs, and emergency measures to "prevent lasting damage to very expensive plants and equipment" if a factory needed to shut down rapidly.
"However, what we need … is a sustainable long-term energy policy based on diverse sources of supply," he told the BBC.
The issue was also raised by Conservative MP Miriam Coates, who called on ministers to consider options to rescue the steel industry, which she said was under "serious threat" due to “ acute ” energy costs.
Following Friday's meeting, industry leaders contrasted the UK ’ s government ’ s failure to alleviate the crisis with the position taken by European governments.
The strategy would see the price of electricity fall while household gas bills could rise by £170 annually.
The Price Cap is working ‑ at the moment, wholesale gas prices are around 250 pence a therm, while the Price Cap is holding down prices at 65 pence.
As has been proven many times this year already, if a supplier fails, Ofgem ‑ the energy regulator ‑ is the first responder.
Suggestions that Nord Stream 2 ‑ a gas pipeline running from Russia to Germany ‑ would help to ease the volatility of global gas prices should also be treated with the scrutiny they deserve.
That is why earlier this week, the Prime Minister and I committed to decarbonising our electricity system by 2035, so that Britain's homes and businesses will be powered entirely by cheap, clean, and secure electricity generated in this country, rather than elsewhere.
This will mean investing and deploying a new generation of home-grown technologies, such as offshore wind, solar and hydrogen power, bringing down costs whilst ensuring we are less at the mercy of global price fluctuations outside of our control.
In the meantime, Sunday Express readers should be in no doubt that the Government will continue to prioritise protecting customers and securing our energy supplies now and well into the future.
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