Britain faces no crisis in security of supply during the current spate of gas price hikes and supplier failures, energy secretary of state Kwasi Kwarteng told MPs this afternoon (Mon 20th).
In a long statement to Parliament made after 15:30 hours, the minister said protecting business and domestic customers was at the heart of the government’s approach.
To suggest that the nation’s lights would go out or that homes would be left in the cold was ‘unhelpful, alarmist and untrue”, the secretary of state asserted.
The National Grid ESO had a full range of tools to ensure that generation of electricity would continue as normal, Kwarteng promised.
Britain’s supply of gas is among the most diversified in the world, Kwarteng stressed. Around half comes from home sources such as the North Sea, around 30% or over two international connectors and the balance is imported as LNG.
D-BEIS’s close talks with suppliers had led, the minister said, to Norway’s Equinor agreeing to increase ‘significantly’ supplies to the UK, taking effect from 1 October.
Economies rebounding after Covid lockdowns, plus bad weather events in the US, had increased worldwide gas demand particularly in Asia “far more drastically than anyone could have predicted,” said Kwarteng.
The secretary of state ruled out any prospect of lifting Ofgem’s energy price cap. The measure saves around 15 million homes up to £150 per year and deserved to continue, said Kwarteng.
Also beyond consideration was any chance of government bail-outs for “failed suppliers whose faulty business models did not deserve taxpayer support”, in the minister’s words.
Suppliers exiting the market was a sign of healthy competition, as had been seen over the past five to ten years of market liberalisation. Ofgem had powers to assign customers to new suppliers.
Customers, particularly vulnerable domestic suppliers, would be protected from price spikes, by continuing measures such as the Warm Homes Discount, the minster promised.
Also ruled out was lifting environmental levies within tariffs or any retreat from liberalising competitive markets or, in Kwarteng’s words, a return to the ‘cosy oligopoly of recent years’.
On carbon dioxide, the Beis chief said Whitehall was monitoring ‘minute by minute’ the efforts it was coordinating with suppliers who were seeking to reverse the effect of shutdowns last week by big producers on Teesside and in Cheshire.
Build more renewables, escape fossil fuel dependency: Energy secretary of state
The gas price crisis demonstrated, Kwarteng said, that “the UK is still too dependent on fossil fuel sources of energy, and that we must strengthen and accelerate our energy transition.
Despite renewable energy capacity quadrupling in since 2010, Britain needed to reinforce low carbon fuel generation. The government had put £385 million into competitions spurring new developments of nuclear technology.
“Customers come first. We must act to protect them”, Kwarteng concluded.
The secretary of state was due to make a joint statement later today with Ofgem’s chief executive Jonathan Brierley.
For Labour, Kwarteng’ shadow Ed Milliband agreed on the preservation of the price cap, and environmental levies. But he said consumers faced a triple whammy of energy cost hikes, the ending of furlough support and an imminent £1,000 cut in Universal Credit.
The gas shortage and the price rises it would inflict on consumers bring pushed the government’s decision to cut UC from ‘indefensible to unconscionable’, in Milliband’s words.