Page 6 - Gi flipbook April 2018

NEWS | INDUSTRY

The recent cold weather has
affected UK gas supplies

Industry risks being left in the cold

as gas market hits 12-year high

BRITAIN’S LARGEST across Europe have important pipeline system guard against the risk of
ENERGY users have bolstered the demand for shut down at the same time tight supplies later on. But
reignited calls for an urgent gas heating this winter, as a deadly explosion at to accurately match their
government review of the lifting short-term prices on Europe’s main gas hub. demand some must be
country’s gas supplies after the gas market to highs not For Britain’s bought on the short-term,
freezing temperatures seen since Britain’s first 'gas manufacturers energy can or ‘spot’, market. Spot
forced the market price to supply alert' from National make up a third of their contracts are also used as a
12-year highs. Grid in 2006. total expenses, meaning benchmark for longer-term
An alliance of industry At the same time, pipelines the sudden surges can contracts, meaning volatility
groups has warned that linking the UK to gas markets dramatically lift production can still feed through to
the winter gas price shocks in Europe floundered and a costs. When National advanced buying strategies.
expose the vulnerability major gas-processing plant Grid is forced to call on Andrew Large, of the
of the UK gas market and shut in Norway. industrial users to cut their Confederation of Paper
pose a major risk to the The price of gas climbed to gas use, the consequences Industries, said the UK’s
sustainability of British reach almost £2 per therm can be serious. reliance on a variety of
manufacturing, according to at the end of February as Laura Cohen, Chief gas imports to meet local
The Daily Telegraph. the ‘Beast from the East’ Executive of the British demand may be a strength,
The second major gas saw the country struggle Ceramic Confederation, said but it does not guarantee
market spike this winter with below freezing the gas market volatility that gas will be delivered.
emerged just two weeks temperatures and snow. shows how vulnerable “It’s not just about the
before the group was due The four-fold hike from the UK is to gas supply or physical gas flows, the
to face the government the average gas price this demand shocks. other part of the equation
over its concerns. time last year was the “We need government to is the price of it,” he said. “If
A government spokesman second major market shock undertake an enquiry into you’re an energy-intensive
said officials were this winter after the UK’s UK gas storage capacity as a industry and using as much
monitoring gas supplies main gas storage facility matter of urgency,” she said. gas as we are using that
closely but did not expect shut down for good. Many manufacturers dramatically undermines
supply disruption. Around two months of bricks, tiles and paper the sustainability of your
Freezing temperatures ago, the North Sea’s most buy gas ahead of time to long-term operation.” ■

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News.indd 1 15/03/2018 14:23