Coal to boost winter energy supply amid fears over Putin gas
KWASI KWARTENG has asked National Grid to bolster electricity supplies using coal this winter amid concerns Russia’s supply of gas to Europe will be cut off.
The Business Secretary has instructed National Grid’s electricity system operator (ESO) to work with the industry to make sure extra generating capacity not fuelled by gas is available.
Last month Mr Kwarteng wrote to the owners of the UK’S remaining coalfired power stations to ask them to stay open longer than planned.
In a letter to Fintan Slye, executive director of the ESO, this week, Mr Kwarteng warned of “high levels of uncertainty and volatility expected in energy markets over the winter”.
He said: “While we are in no way dependent on gas from Russia, I am mindful that a shortage of gas in Europe could put considerable pressure on the European gas market and suppliers of liquefied natural gas, with the potential for additional, consequential impact on electricity markets. We must therefore consider all prudent steps to mitigate these risks and bolster our energy security this winter.
“These risks would be best mitigated by significantly increasing the amount of capacity that is available over the winter, particularly non gas-fired
‘I am mindful a shortage of gas in Europe could put considerable pressure on the European gas market’
capacity. To this end, I request that you work with industry to explore and seek to deliver frameworks to support the operations of additional non gas-fired capacity over the coming winter that would otherwise not be available.”
The letter is likely to add to concerns about prolonged high gas and electricity prices. On Thursday, the Government introduced a windfall tax on oil and gas producers to help provide support for households with energy bills.
Rishi Sunak, the Chancellor, has raised the prospect that the tax could be widened to electricity generators profiting from high energy prices, although Mr Kwarteng is believed to be opposed to the idea. Gas is currently used to meet more than 35pc of the nation’s electricity demand. The UK has typically bought less than 4pc of its gas directly from Russia, but is connected to European markets which are heavily reliant on the Kremlin’s fossil fuel.
The EU gets about 40pc of its gas from Russia but is trying to cut its reliance. Meanwhile, Russia has cut off supplies to Poland, Bulgaria and Finland.
Yesterday, Kadri Simson, the EU’S energy commissioner, told the Financial Times that any member state might be next to cut off, and the EU is preparing contingency plans.
Under market rules, power generators are paid to be on standby to provide back-up supply, funded by consumer bills. Drax and EDF were both due to shut down their coal-fired turbines this year, while Uniper was due to shut one of its four turbines this year and keep the other three running to 2024.