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A cold, hard winter is coming because of a gas crisis that the Government had years to avert

3 100 21
22.09.2021

It’s going to be a cold, hard winter. We’re witnessing a nightmare combination of inflation, soaring gas prices, raised taxes, cut benefits, and food and labour shortages.

Boris Johnson is going to blame the pandemic, as he does for almost everything, but it’s a simplification designed to conceal his own responsibility. We see rising gas prices and labour shortages around the world. But we do not see the same crisis-level outcomes: whole sectors on the verge of collapse and empty shelves in supermarkets. And the reason for that is not due to Covid, but government policy.

There is a global surge in demand for gas, but the situation is particularly severe in the UK. This isn’t because of Brexit. Somewhere down the line, the UK’s departure from the EU’s internal energy market will lead to increased electricity prices, but that hasn’t meaningfully impacted us yet. It’s due to a lack of flexibility in the system.

In recent years, the Government downgraded coal and ramped up investment in wind power in order to reach climate targets. This was a commendable move, but it came with a risk. Wind is highly weather-dependent, meaning you can’t always rely on it. And Britain’s nuclear reactor stock is aging, meaning it’ll struggle to provide the level of energy needed to make up the shortfall.

That’s exactly what has now happened. Unusually low wind speeds mean production is currently 45 per cent below the five-year-average and several nuclear reactors are out of service. The Government has also not matched declining domestic North Sea gas production and closing coal plants with sufficient new low-carbon capacity. The UK remains reliant on imports of both gas and electricity and is therefore vulnerable to the volatile prices of these imports.

One way to protect yourself from this kind of outcome is to maintain a large gas storage capacity. In 2010, the House of Commons energy and climate change committee issued precisely this warning, telling the Government that “gas storage........

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