The UK Government has come under pressure to intervene in the energy market as five suppliers have collapsed in the last five weeks, and major supplier Bulb has requested a bailout.

Half of all the UK’s electricity is generated by gas, and a global grab on the fuel has driven wholesale prices up significantly. Whilst large energy companies buy gas wholesale, many smaller energy companies buy gas on the spot market, making them vulnerable to gas price fluctuations.

Clive Moffatt, Former advisor to the Government on energy security spoke to Sky News and explained the why the UK’s energy supply is vulnerable.

UK reliance on gas

“We have a very high proportion of gas demand for heating which is around about 70% and we have about 40-50% reliance on gas for power (for electricity).” This is unlikely to change significantly in the next few years. Tripling the size of wind farm capacity isn’t going to increase our security, we are still going to need gas for power for domestic gas heating.

Dependence on Imports

The UK is very dependent on imports – “nearly 80% of our gas comes from outside sources and that’s primarily in the short term from LNG shipments from all over” the world which are subject to price fluctuations.

Lack of Storage

The UK has very little storage capacity at “less than 2% of our total annual gas demand”. We are going to need some more gas storage, to reduce the threat of price volatility or we will see a repeat of what we are going through at the moment.

He also went on to explain the need for UK Government to recognise the role that natural gas has to play in the journey to net zero ahead of COP26. He goes on to call for investment for gas power and gas storage. He warns “more needs to be done to reduce the threat of price volatility…or we will see a repeat of what we are going through at the moment.”

You can watch the full interview here: