The story got even more juicy towards the end of last week, when the UK-Belgium Interconnector pipeline briefly went down, causing a spike in gas prices to a seven-year high. The failure was unfortunate, admittedly, but by no means unprecedented, and was swiftly resolved. The spike in gas prices also came at a difficult time, but it’s a market that follows the law of supply and demand. That shouldn’t come as a surprise – and in fact, you could legitimately spin this story another way. After one of the longest and coldest winters on record, and in spite of unexpected faults in the infrastructure, the UK did not even have to issue a gas supply warning, which in itself would have been fairly standard procedure. Still, “lights to stay on” doesn’t have quite the same ring to it as “lights to go off”, does it?
Despite the panic-mongering and wilful blindness to the facts of much of the reporting, this chain of events did highlight a number of important issues. First, gas storage. If the country is going to store more gas, it must work out a way to pay for it and a timescale to bring it forward.
Second, security of supply. As the high profile comments from SSE chief executive Ian Marchant demonstrated this week, there is a real problem here, which the government is making worse with its shilly-shallying over the capacity market.
Third, extreme weather. With the climate changing, we need to get accustomed to increased incidences of severe cold and extreme weather events, and suppliers and networks must mitigate and prepare for this.
Last but not least, it has highlighted the broken relationship with the national media and public, which has led to the spectre of fuel bill rises haunting every news story, changing run-of-the-mill market developments into front page scare stories.
Ellen Bennett
This article first appeared in Utility Week’s print edition of 29th March 2013.
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