Appel to government
UK energy output ‘must rise’ to control prices
Britain must produce more of its own gas supplies to meet demand and keep the lid on prices, says an energy trade group.
Offshore Energies UK has today urged the UK government to actively encourage more output or gas, not least to compensate for the ban on Russian imports.
In June a House of Commons briefing showed for the third consecutive month the UK imported no gas from Russia and the first month with no imports of gas, oil or coal.
OEUK warned that global efforts to remove Russia’s oil and gas will cause supply and therefore price implications for years to come, repeating its calls for a long term energy strategy which recognises that 85% of UK households continue to rely on gas for heating.
The UK’s trade deficit reached its highest level as a share of GDP since records began. This is caused in part because the UK imports much more oil and gas than it exports.
Despite high demand, the production of oil and gas in UK waters continues to decline, with the industry now meeting half of domestic gas needs and the equivalent of more than 80% of oil.
OEUK Energy Policy Manager Will Webster said: “Consumers are all too aware of the impact cutting Russian supplies has had on the global price of oil and gas, and the reality is these effects will be here to stay for at least the medium term.
“This is why the UK must prioritise energy produced here.
“Today gas heats 85% of UK homes so in the short and medium-term, governments must support oil and gas in UK waters and carefully manage already declining production levels.
“At the same time, these same companies are also building the energy system of the future including expanding renewables to meet more of the UK’s electricity needs, while also developing hydrogen and carbon capture which could play a role in domestic heating and industrial power.
“We are seeing the reality of how complicated the transition to a lower carbon energy future will be, with a clear need to manage supply and demand as a whole and not in isolation.
“The transition is a necessity, which is why we continue to emphasise the need for consensus on a long term and comprehensive energy strategy which prioritises production of energy in the UK and accelerates the transition for industries and consumers.”
Labour price freeze plan
The calls from OEUK comes as Labour leader Sir Keir Starmer has unveiled a plan to freeze the energy price cap, vowing that his party “wouldn’t let people pay a penny more” on their gas and electricity bills this winter.
Halting price rises in both October and January would save the typical family £1,000 and keep inflation under control during the cost of living crisis, according to Labour.
Sir Keir said his “fully-funded” £29bn plan to keep the cap at current levels throughout the winter would partly be covered by expanding the windfall tax imposed on oil and gas giants.
The energy price cap, the maximum amount companies can charge domestic users, is currently set at £1,971 a year – but it is expected to climb to almost £3,600 a year in October and over £4,200 in January. There is no price cap on businesses.
Liberal Democrat leader Sir Ed Davey – who proposed an energy price cap freeze a week ago – took a swipe at the timing of Labour’s policy.
“Glad you liked my proposal to cancel the energy price rise. I also have some thoughts on electoral reform that you’re welcome to adopt,” he tweeted.
Chancellor Nadhim Zahawi wants to cut gas and electricity bills by an extra £400 in January through a new lending scheme for energy providers.