UK planning for worst-case energy scenario – reports

Cold weather combined with gas shortages is expected to force UK authorities to enact a “reasonable worst-case scenario,” providing for four days of blackouts during the upcoming winter, Bloomberg reports, citing people familiar with the government’s planning.

The probable outages may affect not only industry, but also the country’s households, as a result of an electricity capacity shortfall amounting to about a sixth of peak demand – even after emergency coal plants have been fired up.

At the same time, Britons are expected to see average annual energy bills rise above £4,200 ($5,086) in January from the current fee of just under £2,000, adding to the soaring consumer price inflation. 

Meanwhile, the government’s base case scenario doesn’t include blackouts. The first stage of the UK’s emergency plan reportedly involves the network operator directing flows of gas on the system, temporarily overriding commercial agreements, while the second stage includes halting supplies to gas-fired power stations, triggering planned power cuts for industrial and domestic users. 

The UK energy industry regulator Ofgem has said it would adjust its cap quarterly rather than half-yearly due to current volatility in energy markets, meaning bills are likely to rise again in January.

Britain, which has reportedly been shipping record amounts of gas to continental Europe, has very little domestic storage capacity. The UK Department for Business, Energy and Industrial Strategy (BEIS) said Britain isn’t dependent on Russian energy imports, as it has its own North Sea gas reserves and “steady imports from reliable partners.” It also pointed out that the UK has the second largest LNG port infrastructure in Europe and “a gas supply underpinned by robust legal contracts.”

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