Business secretary Kwasi Kwarteng said energy security is “an absolute priority” as he prepared to hold talks with industry representatives. It comes amid concerns about a rise in wholesale gas prices. Despite this, there’s one solution which could help make energy more affordable that Kwarteng isn’t talking about – namely the re-nationalisation of energy.
Whistling in the wind
Kwarteng will speak to chief executives from energy suppliers and operators. He’ll be discussing the extent of the impact of surging prices. The rise has been blamed on high global demand, maintenance issues, and lower solar and wind energy output.
Today, I’ll be speaking to chief executives of the UK’s largest energy suppliers + operators to discuss the global gas situation
Britain has a diverse range of gas supply sources, with sufficient capacity to more than meet demand
We do not expect supply emergencies this winter
— Kwasi Kwarteng (@KwasiKwarteng) September 18, 2021
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High gas and and electricity prices are “likely”
Dermot Nolan, former head of the regulator Ofgem, warned that Britain is likely to face high energy prices for the rest of 2021. Nolan is a former Ofgem chief executive. He said the increases were the result of depleted stocks following a cold winter in 2020, reduced supply from Russia, and increased demand for liquefied natural gas from East Asia.
He told the BBC Radio 4 Today programme:
It is not obvious to me what can be done in the very short run. Britain does have secure relatively diverse sources of gas, so I think the lights will stay on. But I am afraid it is likely in my view that high gas and high electricity prices will be sustained for the next three to four months.
It is very difficult to see what the Government can do directly in this regard.
It’s understood Kwarteng has meetings on 18 September with senior executives from Ofgem, Centrica, National Grid, Energy UK, Octopus, Ovo, SSE, EDF, ScottishPower, Shell Energy, E.ON, Bulb, and SGN.
While Kwarteng meets the companies profiting from high energy prices, others are calling for a return to nationalisation:
Energy prices are going up for millions of families in England this year. Scotland can avoid that for families in Scotland by creating a state-owned energy company. @NicolaSturgeon Scotland has spoken. Get it done.https://t.co/eK5BpV0zG4
— We Own It (@We_OwnIt) September 11, 2021
The case for nationalisation
As We Own It has written:
Gas and electricity was privatised in the late ’80s, starting with British Gas. Since then, prices have increased astronomically, and customer satisfaction is down at 32%. Shareholders are paid huge dividends while customers are forced to accept constant price increases.
Public ownership of energy networks will save £3.7 billion a year – enough to buy 222 new offshore wind turbines.
Meanwhile, meat producers are urging the government to step in to protect the food supply chain. The sharp rise in gas prices has resulted in a cut in the supply of carbon dioxide (CO2) to the industry. Two large fertiliser plants in Teesside and Cheshire produce CO2 as a by-product. But they have shut as a result of the sudden hike in wholesale gas prices.
British Meat Processors Association chief executive Nick Allen said CO2 is essential to both the ‘humane’ slaughter of livestock and extending the shelf-life of products. He told the BBC Radio 4 Today programme:
If we haven’t got the CO2 supplies, on the packaging side that reduces the shelf-life of products going on the shelves at a time when we are really struggling because of all the transport problems.
This has come as a huge shock, it has happened so quickly. I think everyone is outraged in the industry that these fertiliser plants can shut down without any warning whatsoever and suddenly take something which is so essential to the food supply chain off-stream just like that.
We really need Government to step in now and actually do something.
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