Britain pleads with Europe to help ‘keep the lights on’ this winter

Britain is pleading with Europe to help ‘keep the lights on’ this winter amid fears of blackouts and energy rationing caused by Putin’s Ukraine invasion. 

Liz Truss is attending a summit of European leaders in Prague on Thursday, with French president Emmanuel Macron among those she is expected to meet, to discuss the energy crisis.

She is expected to say that energy interconnectors keeping power flowing between the UK and the EU mainland should stay open.

Ms Truss will also tell the opening plenary session in Prague: ‘Europe is facing its biggest crisis since the Second World War. And we have faced it together with unity and resolve.

‘We must continue to stand firm – to ensure that Ukraine wins this war, but also to deal with the strategic challenges that it has exposed.’ 

Ms Truss will seek to stress the UK’s role in European matters – including Ukraine – despite leaving the EU, Downing Street said.

The Prime Minister will say: ‘The threat was left to fester for far too long. Now, at last, we are tackling Putin’s aggression head on. 

‘And we should take the same approach with other challenges before us – including long-standing regional issues like energy and migration. ‘Instead of the old approach which merely dealt with the symptoms, it’s time to address the fundamental causes.’

It is also expected that the National Grid will warn of potential shortages of energy in cold weather.

This could occur if wind speeds are low and electricity cannot be imported.

According to the Times, the National Grid’s analysis is also expected to reveal that there could be gas shortages in Britain on a cold day.

This could happen if Britain cannot import supplies from elsewhere in Europe. 

Great Britain produces a lot of its own gas, but the majority is still imported. It has pipeline connections to Norway, which supplies a large amount of the country’s gas.

Britain imported very little Russian gas before the war, but will still be affected by the shortages likely to be faced in Europe.

During winter cold snaps Britain normally imports gas from storage sites in mainland Europe – it has very little storage of its own. But now European countries are likely to need this gas themselves after losing the supply from Russia.

Ofgem wrote in the letter obtained by The Times: ‘Due to the war in Ukraine and gas shortages in Europe, there is a significant risk that gas shortages could occur during the winter 2022/23 in Great Britain.

‘As a result, there is a possibility that GB could enter into a gas supply emergency.’

And according to the International Energy Agency (IEA), a long and chilly winter – or a late cold snap similar to the 2018 ‘Beast from the East’ – could see the amount of gas in storage across the EU drop as low as five per cent this year.

There are fears this could lead to blackouts in Europe, with the IEA warning storage levels need to remain at 33 per cent until the Spring for ‘a safe and secure winter’. 

And in a stark warning, the Paris-based intergovernmental group today said it could ‘not be ruled out’ that Russia could cut turn off the tap completely, as it continues to use natural gas as a ‘political weapon’.

Currently, natural gas storage is almost 90 per cent full across Europe – above the EU’s current target.

Supplies of Russian gas to Europe are currently down by around 50 per cent this year, compared to 2021.

While the UK gets little gas directly from Russia, it is part of the European market and it therefore suffers the same effects of surging costs and huge competition for supplies.  

The IEA, whose members include the UK and the US, warns European countries could wind up competing with Asia to ship in already scarce and expensive liquid gas (LNG).

It also urged homeowners to be ‘responsible’ with their usage this winter in order to help lessen the risk of shortages.

The Paris-based IEA said in its quarterly gas report, released on Monday that European Union countries would need to reduce use by 13 per cent over the winter in case of a complete Russian cutoff amid the war in Ukraine.

Much of that cutback would have to come from consumer behaviour such as turning down thermostats by 1 degree and adjusting boiler temperatures as well as industrial and utility conservation, the group said.

Just a trickle of Russian gas is still arriving in pipelines through Ukraine to Slovakia and across the Black Sea through Turkey to Bulgaria.

Two other routes, under the Baltic Sea to Germany and through Belarus and Poland, have shut down.

Another hazard in the study was a late winter cold snap, which would be particularly challenging because underground gas reserves flow more slowly at the end of the season due to less gas and lower pressure in the storage caverns.

The EU has already filled storage to 88 per cent, ahead of its goal of 80 per cent before winter. The IEA assumed 90 per cent would be needed in its Russian cutoff scenario.

Businesses in Europe have already cut back natural gas use, sometimes simply by abandoning energy-intensive activity such as making steel and fertilizer, while smaller businesses like bakeries are feeling a severe crimp in their costs.

High prices for gas, which is used for heating homes, generating electricity and a host of industrial processes are feeding through to record consumer inflation of 10 per cent in the 19 EU member countries that use the euro and sapping so much consumer purchasing power that economists predict a recession at the end of this year and the beginning of next.

European governments and utilities have made up much of the Russian shortfall by purchasing expensive supplies of liquefied natural gas, or LNG, that comes by ship from countries such as the U.S. and Qatar and by obtaining increased pipeline supply from Norway and Azerbaijan.

The goal is to prevent storage levels from falling so far that governments must ration gas to businesses. Gas storage must remain above 33 per cent for a secure winter, according to the IEA, while levels below that risk shortages if there’s a late cold snap.

Lower levels also would make it harder for Europe to refill storage next summer, while higher reserves from conservation would help lower extremely high prices.

European leaders say the cutback in Russian gas is energy blackmail aimed at pressuring governments over their support for Ukraine and sanctions against Moscow.

Since Russia halted flows this month through the Nord Stream 1 pipeline running under the Baltic Sea to Germany, it and the parallel Nord Stream 2 – built but never operated after Germany refused to certify it – were damaged in underwater explosions that European governments say are sabotage.

Demand for liquefied gas has driven up prices and tightened supply to the extent that poorer countries in Asia cannot afford it. Bangladesh is experiencing widespread power blackouts, while Pakistan faces rolling blackouts and has introduced reduced working hours for shops and factories to save electricity.

‘Interregional competition in LNG procurement may create further tension, as additional European needs would put more pressure on other buyers, especially in Asia, and conversely cold spells in Northeast Asia could limit Europe´s access to LNG,’ the agency said.

The gas crisis in Europe has also deprived Asian countries of the limited number of floating regasification terminals, which were expected to play a major role in LNG imports in Southeast Asia. Europe has secured 12 of the vessels and plans another nine.

It comes as the already pricey cost of gas could rise even further as OPEC+ considers cutting output by more than 1 million barrels a day for its biggest reduction since the pandemic.

In early Asian trade on Monday morning, oil prices jumped more than 3 percent in a bid to support the market.

Brent crude, the global oil benchmark, fell to $87.96 a barrel last week – its swiftest decline since the pandemic set in.

The average price for a gallon of gas in the US is currently at $3.79 a gallon, the AAA reported.

The price rose for five days in a row last week after interest rates set by the Federal Reserve increased to 3.25 percent amid fears of a global recession.

Oil prices had been tumbling for four straight months since June, as COVID-19 lockdowns in top energy consumer China hurt demand, while rising interest rates and a surging U.S. dollar weighed on global financial markets.

To support prices, the Organization of the Petroleum Exporting Countries (OPEC+), which combines OPEC countries and allies such as Russia, is considering an output cut of more than 1 million bpd ahead of a meeting on Wednesday, OPEC+ sources told Reuters.

This significant production cut is poised to anger the United States, which has been putting pressure on Saudi Arabia to continue pumping more to help oil prices soften. The US is also looking to reduce revenues for Russia, as the West seeks to punish Moscow for sending troops to Ukraine.

OPEC+ accelerated some production cuts over the summer ahead of President Joe Biden’s visit to Saudi Arabia in July, when he controversially fist-bumped Saudi Crown Prince Mohammed bin Salman (MBS) as he arrived for a meeting with the controversial royal.

OPEC+ made a small increase in pumping oil in August but has since worked to reverse those actions.

The OPEC+ meeting will take place on October 5 against the backdrop of falling oil prices and months of severe market volatility which prompted top OPEC+ producer, Saudi Arabia, to say the group could cut production.

If the cut is agreed upon, this will be the group’s second consecutive monthly cut after reducing output by 100,000 bpd last month.

Ministers have discussed a potential campaign which will aim to get Brits to reduce their energy usage.

The public information campaign would encourage Brits to lower their thermostat and shower instead of take a bath.

Although it has been ruled out by Downing Street, discussions have happened between National Grid and energy suppliers who may launch their own campaigns.  

While it has been reiterated by the PM and her government that energy supplies for Brits are safe this winter, officials have raised fears in private of shortages. 

They have raised their fears in what has been called a ‘reasonable’ worst-case scenario. 

Elsewhere, fears are growing that Norway could shut its interconnectors with the UK and EU. 

The country would be able to give Britain 1.4 gigawatts (GW) of electricity.

They can do this through a 730km cable linking Blyth in Northumberland and Kvilldal in Norway, which is enough to power 1.4 million homes.   

This assumes that Britain can important 5.7 GW of electricity via interconnectors.  

It comes as the Norwegian government has said that rain left reservoirs used to power hydroelectric dams short of water.

The Norwegian government has said it will prioritise refilling the dams instead of power production. 

Pipelines with Britain, Belgium and the Netherlands can send gas in either direction.

This depends on where prices are higher and for most of the year, gas is exported by Britain through the pipelines.

This helps to fill large storage sites on the mainland. However in winter Britain sometimes imports some of this gas back.

There are also electricity cable links, three with France and one separate one for Belgium, France and the Netherlands and Norway.

There is great uncertainity over this winter as Europe is also in the clutches of a gas crisis.

Although National Grid has said lights should stay on, it is unclear if the energy links are reliable.

It comes as countries turn to emergency measures to protect their supplies.

France and England’s power links are crucial as Britain has been sending electricity to the country, something which is being heavily relied on. 

But Britain has also assumed there will be imports from France.  

One analyst said that if both countries are short of power the cables could be shut down to stop a bidding war.

The National Grid said that it would be supporting other energy companies in a bid to prevent disconnection across the EU.

To prevent blackouts, it could use coal ;plants or ask people to use less electricity.

It would do all of this while still exporting power and only plans to stop sending energy if supplies in the UK facer issues. 

Conservative former cabinet minister Nadine Dorries, a backer of Ms Truss during the leadership race, warned that the PM needs to change course or risk leading the Tories to a landslide defeat at the next general election.

 Ms Dorries told The Times: ‘I understand that we need to rocket-booster growth but you don’t do that by throwing the baby out with the bathwater. You don’t win elections by lurching to the right and deserting the centre ground for Keir Starmer to place his flag on. 

‘If we continue down this path, we absolutely will be facing a Stephen Harper-type wipeout. I’m sure she’s listened and will stop and rethink.’

 Former Canadian prime minister Mr Harper lost power to Justin Trudeau in the 2015 election. It was also reported the Conservatives have stopped working with Isaac Levido, the Australian political strategist who played a key role in the Tory election win in 2019. 

Lee Cain, former communications chief to Ms Truss’s predecessor Boris Johnson, said it was a ‘monumental error’ given that Mr Levido helped spearhead the ‘best election campaign in decades’.  

 Ms Truss is expected to join Czech premier Petr Fiala for a working lunch. As foreign secretary she was a sceptic of the planned summit, so her decision to attend has caused some surprise.