How vulnerable is UK energy system as tensions rise between Russia and Ukraine?
The deepening tensions between Russia, the world’s biggest gas producer, and Ukraine have reignited fears that the Kremlin may weaponise its gas reserves by restricting exports to Europe in the face of potential sanctions.
Russia is western Europe’s largest single supplier of gas, a commodity that is in tight supply globally and has reached record market price highs in recent weeks, threatening to tip the UK into a national energy crisis.
Meanwhile, Europe may need to use even more gas to keep the lights on this winter after the French nuclear firm EDF warned that technical trouble at a string of its reactors would cut its electricity generation, meaning gas plants across Europe may need to run more than expected.
Gas plants were already in high demand over the past year after slow wind speeds reduced Europe’s renewable energy output in 2021. This played a role in draining Europe’s gas storage facilities to record lows after a long, cold winter last year.
Ministers have reportedly been warned that the UK could face further record-breaking prices for gas and at the petrol pumps. So, could Europe’s energy crisis become a catastrophe?
The good news is that the UK imports barely any gas from Russia. It meets about half of its gas requirements from the North Sea, while another third is sourced from Norway. The rest is imported by pipelines connecting the UK to Europe, or in the form of liquified natural gas (LNG), which is transported by tankers typically from Qatar or the US.
The bad news? The UK’s gas sources could all becoming eye-wateringly expensive if markets in Europe soar. The UK’s market is closely connected to markets in Europe, so a price rise in Germany or the Netherlands would lead to higher prices in Britain.
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