UK’s energy firms hold talks with government amid fears gas price spike could lead to food and fuel shortages
The government is meeting with representatives from Britain’s energy firms amid fears a spike in gas prices could lead to food and fuel shortages.
Sky News understands Business Secretary Kwasi Kwarteng will spend today talking to senior executives from Ofgem, Centrica, National Grid, Energy UK, Octopus, Ovo, SSE, EDF, Scottish Power, Shell Energy, E.ON, Bulb and SGN.
Mr Kwarteng tweeted that the UK government does “not expect supply emergencies this winter”.
It follows reports that some companies that use gas in the production of products have shut down due to the high price of the fuel.
A resulting shortage of carbon dioxide is said to be stoking worries there could be gaps in the supply of meat, as the industry uses CO2 in the slaughter of animals.
But there are also concerns some people will be unable to afford the high cost of heating their homes over winter.
A spokesperson for the Business, Energy and Industrial Strategy department told Sky News: “The UK benefits from having access to highly diverse sources of gas supply to ensure households, businesses and heavy industry get the energy they need at a fair price.
“We are monitoring this situation closely and are in regular contact with the food and farming organisations and industry, to help them manage the current situation.”
In an unusual move and in a reference to consumers, government officials have written an “explainer” to set out why “the Great Britain (GB) gas system has… sufficient delivery capacity to more than meet demand”.
Kwasi Kwarteng has said there will be no gas supply issues in the UK
The rise in gas prices has been blamed on high global demand, maintenance issues, and lower solar and wind energy output.
A former Ofgem chief told the BBC Radio 4 Today programme that Britain is likely to face high energy prices for the rest of the year.
Dermot Nolan 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.
The government has been urged by meat producers to protect the food supply chain after the gas price hike resulted in the industry suffering carbon dioxide shortages.
Fertiliser plants in Teesside and Cheshire, which produce CO2 as a by-product, have halted production as a result of the sudden rise in wholesale gas prices.
Sky’s Ed Conway says that in the coming months, we can expect many more industrial plants to temporarily cease production.
Nick Allen, chief executive of the British Meat Processors Association, told Sky News his industry’s concern was “what conversations are going on with this company that shut down these two fertiliser plants”.
He said: “We’re in the dark about as to what negotiations going on there, but we sincerely hope that something is happening.
“In very simple terms, if we can’t humanely slaughter the poultry and pigs, you could see British poultry meat and British pork disappear off the shelves in the next couple of weeks.
“The impact it will have at farm level is absolutely horrendous, from our perspective this is something that really needs to be taken seriously now.
“What’s going to happen back at farm level where these animals are left on the farm? What are the farmers going to do with them? It’s unthinkable some of the consequences here, and that’s why it’s really important the government gets stuck into this, it needs government intervention at some level.”