High wholesale prices for gas and electricity threaten the UK’s “national crisis”, energy companies have asked the government to take appropriate action. This was reported on December 24 by the Financial Times.
The heads of EDF, Good Energy and Energy UK have asked the London government to resolve the situation amid rising gas prices after fuel prices hit a new record and have remained at unprecedented levels since then, the article said.
“This is a national crisis. Wholesale gas and electricity prices have risen to unprecedented levels in the past three weeks, creating an extremely challenging operating environment for every business in the industry, ”said Good Energy CEO Nigel Pocklington.
He warned that worsening conditions would result in an additional £ 3m in annual profits for his company.
Experts said that the crisis in Britain is associated with a shortage of Russian gas supplies to Europe.
“Gas prices have jumped sharply in Europe: over the past two weeks, prices have risen by more than 70% due to cold weather, nuclear shutdowns in France and reduced flows from the Russian supplier Gazprom,” the newspaper reports sources.
Analysts admit an increase in electricity tariffs up to 56%. At the moment, the average household in the UK spends £ 1,277 per year on these needs, but in April 2022 the amount of these expenses could rise to two thousand pounds.
As the newspaper notes, since the beginning of August, 26 British energy suppliers have gone bankrupt, as the rise in wholesale gas prices revealed flaws in the business models of many companies. Industry leaders have warned that even well-run companies are suffering from tariff increases.
On December 24, Stanislav Mitrakhovich, an expert at the National Energy Security Fund and the Financial University under the Russian government, said that Europe would not do without Russian gas and the Nord Stream 2 pipeline, despite the decline in prices on the gas futures or spot market.
He pointed out that Europe needs cooperation with Russia, since liquefied natural gas accounts for 10% there, the rest is pipeline supplies and extraction of blue fuel.
A day earlier, Bloomberg wrote that seven energy companies in Germany went bankrupt due to rising gas prices. The rise in gas prices has caused bankruptcy and energy companies in the UK. In the fall, the country’s government said that the UK benefits from the presence of different sources of gas supplies.
As Gazprom reported on December 24, Europe has withdrawn from underground gas storage facilities (UGS) more than 41% of the volume that was injected in 2021. In addition, on December 21 and 22, records were recorded in the extraction of gas from European UGS facilities per day – 700 million cubic meters. m and 712 million cubic meters. m respectively. This information was confirmed on his Facebook page by the head of the Ukrainian GTS Operator Serhiy Makogon. He wrote that the Russian gas holding is cutting gas supplies to the EU through Poland and Ukraine, which is why Europe has set a record for the extraction of gas from reserves.