United Kingdom

Business Secretary claims Britain will avoid energy emergency after Russia accused of rigging prices

Business Secretary Kwasi Kwarteng has claimed Britain will avoid an energy emergency in the coming months despite warnings of a 'black swan event' after Russia was accused of rigging gas prices. 

Kwarteng said he did 'not expect supply emergencies this winter' as he prepared for talks with chief executives of the UK's largest energy suppliers and operators to discuss the global gas situation today. 

It comes amid warnings of a 'black swan event', an unpredictable episode with often severe consequences, after global gas prices surged due to high global demand, maintenance issues and lower solar and wind energy output.

Business Secretary Kwasi Kwarteng has claimed Britain will avoid an energy emergency in the coming months despite warnings of a 'black swan event' after Russia was accused of rigging gas prices

The business secretary said energy security was 'an absolute priority' as he was set to discuss the extent of the impact of surging prices with chief executives.  

Mr Kwarteng tweeted: '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.

'Energy security is an absolute priority. We are working closely with @ofgem and gas operators to monitor supply and demand.'

It is understood Mr Kwarteng has meetings on Saturday with senior executives from Ofgem, Centrica, National Grid, Energy UK, Octopus, Ovo, SSE, EDF, ScottishPower, Shell Energy, E.ON, Bulb and SGN.

The talks come after Russia was accused of rigging the prices of gas to damage Britain's economic recovery from Covid and shortages that could ruin food chain supply in just two weeks.  

The country's state-owned energy firm, Gazprom, is now facing an investigation into the rise in price.  

And more than 40 MEPs last night signed a letter to the company in which they accused it of 'deliberate market manipulation'.    

The country's state-owned energy firm, Gazprom, is now facing an investigation into the rise in price. Lawmakers said they were suspicious of the company's 'effort to pressure' Europe to agree a fast launch to its Nord Stream 2 gas pipeline (pictured)

A former head of the regulator Ofgem warned Britain is likely to face high energy prices for the rest of the year.

Dermot Nolan, a former Ofgem chief executive, said the increases were the result of depleted stocks following a cold winter last winter, reduced supply from Russia, and increased demand for liquefied natural gas from the Far East.

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.' 

Government ministers last night were in emergency talks with food producers to try and tackle the issue. 

Two fertiliser plants were forced to close down in the north of the country due to a lack of carbon dioxide available in the food industry which has a devastating effect on the product of lots of products including meat.   

And food supply chains are already under a significant amount of strain due to a shortage in delivery drivers caused by test and trace systems forcing isolation and some drivers leaving the UK after Brexit. 

And more than 40 MEPs last night signed a letter to the company in which they accused it of 'deliberate market manipulation'. Pictured: Russian President Vladimir Putin 

Meat industry workers warned last night that the disruption in supply mean carbon dioxide stocks would run out within two weeks, meaning it can't be used to stun pigs and chickens prior to being killed.  

A group of European Parliament lawmakers has asked the European Commission to investigate Gazprom's role in soaring European gas prices, saying the company's behaviour had made them suspect market manipulation.

Gas prices in Europe have surged in recent months, helping to drive European electricity costs to multi-year highs. 

Electricity prices in the UK skyrocketed to 11 times above normal levels on Monday. 

In a letter to the EU's executive Commission around 40 of the Parliament's 700 lawmakers said they suspected Russia's Gazprom had acted to push up gas prices.

'We call on the European Commission to urgently open an investigation into possible deliberate market manipulation by Gazprom and potential violation of EU competition rules,' said the letter.

In response to the accusations, Gazprom said it supplied its customers with gas in full compliance with existing contracts.

The European Commission said it had received the letter and would reply in due course. 

The lawmakers said they were suspicious of the company's 'effort to pressure' Europe to agree a fast launch to its Nord Stream 2 gas pipeline, which still has to clear regulatory hurdles that could take months to complete.

Gazprom announced last week that it had completed construction of the Nord Stream 2 pipeline to Germany, doubling its gas exporting capacity via the Baltic Sea.

Nord Stream 2 has faced sanctions from the United States and criticism from other countries wary of the EU increasing its reliance on energy imports from Russia

The EU lawmakers cited incidents including recent shut-ins of some of Gazprom's production and said the company had refused to book gas transport capacities through existing pipelines.

'All these factors allow to suspect that the record natural gas price surge in Europe in the recent weeks may be a direct result of Gazprom's deliberate market manipulation,' the letter said.

Nord Stream 2 has faced sanctions from the United States and criticism from other countries wary of the EU increasing its reliance on energy imports from Russia. 

Tobias Ellwood, a former minister and chairman of the defence committee, told the Telegraph: 'This attempt to manipulate gas prices is an example of grey zone conflict where economies are directly targeted to cause political strife and raise civil unease. An example of the constant competition we now face from authoritarian regimes.'

Chris Bryant, a member of the foreign affairs committee, told the publication: 'Russia has been abusing the energy market in Europe for years, holding countries to ransom and forcing up prices. We need a strong united front with other European countries to stop this cynical abuse. Boris Johnson needs to guarantee our energy security without relying on Russia.' 

Gazprom released a statement saying: 'Gazprom delivers gas under consumer requests fully in line with contract obligations.'   

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