Britain forecast to face among Europe’s highest energy costs this winter
Great Britain is expected to have enough gas and electricity to meet demand this winter, but may pay some of Europe’s highest energy costs as it relies more heavily on imports. Forecasts point to expensive competition for gas and electricity amid tight European supplies, while recent market disruption has pushed gas prices sharply higher.
National Gas expects liquefied natural gas imports to rise by about 5% from last winter, and UK gas production to fall by 6%; the newly approved Jackdaw gasfield may modestly boost supply from next month. Ofgem approved a pipeline deal that will add around 10p a month to the average gas bill and help keep gas flowing. Great Britain is also forecast to be a net electricity importer, after spending a record £4bn on power imports in the year to August; gas-fired power use in the most extreme supply crunches could be 7% higher than previously forecast.
In short
- Britain is expected to meet winter energy demand.
- Import dependence could mean some of Europe’s highest costs.
- Tight supplies and competition may keep prices elevated.
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The case for
Higher energy costs may be a necessary price for securing reliable supplies while domestic gas production falls and Britain relies more on imports. The pipeline investment and additional gasfield output could help keep energy flowing during tight markets, and the modest monthly bill increase may be justified if it reduces the risk of shortages.
The case against
Among Europe’s highest energy costs would place a heavier burden on households and businesses, even though Britain is forecast to have enough energy to meet demand. Greater reliance on imported gas and electricity leaves consumers exposed to international price spikes, while the pipeline charge adds to bills and continued gas-fired generation may deepen dependence on costly fuel.
Explained simply
Britain uses gas to heat many homes and to generate electricity, so winter demand can make energy supplies and prices more sensitive to changes in the market. Gas can be brought in as liquefied natural gas or through pipelines, while electricity can also be imported from neighbouring countries.
The main players include energy suppliers, which buy fuel and power; National Gas, which operates the gas transmission network; and Ofgem, the regulator that oversees parts of the energy system. North Sea producers also affect how much gas is available from UK fields.
The cost of imported energy can influence wholesale prices and, in turn, household bills and businesses’ costs. Keeping supplies flowing through winter therefore matters for both the reliability and affordability of energy.
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Originally published by The Guardian as “Some of Europe’s highest energy costs expected in Britain this winter”.