Powering down

On the face of it, the explosion at a gas plant in Austria should have had little impact here in Britain; but so reliant have we become on energy imports that we are vulnerable to disruptions in the supply line hundreds of miles away. The Baumgarten plant disaster not only pushed up spot prices across the continent, but its UK impact was exacerbated because the Forties pipeline in Scotland was out of action, the Netherlands reduced gas supplies via undersea interconnector and one of Norway’s largest gas fields was taken offline. UK gas prices soared, while the price for delivery in January rose to the highest levels in four years.

The Government’s energy strategy is to replace old coal-fired and nuclear power stations with renewables and new gas-fired power stations. While we wait for these, Britain has begun to import an increasing amount of electricity from continental Europe. It is forecast that the UK will receive 10 times more power from undersea interconnectors by 2030 compared to projections made in 2012.

As a recent report from the Centre for Policy Studies pointed out, this imported electricity has a competitive advantage because it is not subject to the Carbon Price Floor or transmission charges faced by British generators. Moreover, we are closing down coal-fired power plants while buying energy that is likely to have come from coal plants. The more reliant Britain becomes on energy imported from Europe, the more vulnerable we become to disruptions in supply, capacity restrictions and price shocks. The Government must build greater resilience into the system by strengthening UK energy security.