Top firms warned of power rationing
news.scotsman.com
BRIAN BRADY WESTMINSTER EDITOR
BRITAIN'S industrial giants have been warned by ministers to prepare for a total production shutdown in a bid to protect power supplies to domestic users.
Amid escalating concerns about dwindling supplies and soaring prices, the Department of Trade and Industry (DTI) is preparing to trigger contingency plans designed to limit consumption of gas and electricity
Scotland on Sunday can reveal that the government has revised its official estimate of how cold the winter is likely to be since an assessment was completed in October, and the demand on UK fuel supplies is now expected to be much greater.
Special measures for the looming crisis could see big industrial users, such as car manufacturers and steel plants, required to "restrain demand", while electricity generators will be told to switch to alternative fuels, including coal. If the actions fail to curb consumption, officials reserve the right to intervene to impose temporary switch-offs.
The interventions in industrial use are being prepared as part of a desperate bid to protect supplies to domestic customers, who already face rising fuel bills after the freezing temperatures across much of the country. Confirmation that the government had put industry and generators on notice for drastic evasive action came barely a month after business leaders condemned the "scandalous" rundown of the nation's fuel supplies.
The sharp decline in gas from the North Sea has left the UK more dependent than ever on alternative supplies imported by pipeline from Europe. Ministers and industrialists subsequently complained that Britain had been unfairly treated, left waiting for supplies and hardest hit by soaring wholesale gas prices.
The developing fuel crisis deepened last week with warnings that the increases would provoke huge rises in fuel bills for British householders this year.
Confusion over whether Russia will go ahead with its threat to turn off gas supplies to Ukraine, posing a threat to the stability of supplies in Western Europe, has caused further headaches in Whitehall.
"The generation and supply sectors have been experiencing a difficult time in recent months," a senior DTI source said last night. "We don't have the level of North Sea gas, we have deregulation of our market, so we are no longer an energy island. I think industry understands that, and they understand that we have to take measures to conserve what we have. We hope we don't have to go as far as the contingency plans allow us."
Ministers had previously hoped that market forces, notably through the high price of wholesale gas, would relieve pressure on gas supplies and the electricity generation network during the cold weather.
A Conservative spokesman last night said the government had to take some of the blame for the potential "rationing" of supplies to industry because of its failure to manage gas stocks and the electricity generation industry properly. But he added: "It is extremely important that domestic customers are the priority."
Employers' leaders have warned that businesses will carry the burden of the energy crisis, with blackouts "inevitable" for the most intensive consumers.
"We are going to have a real problem keeping the lights on for high-energy users," said CBI chief Sir Digby Jones, who claimed the crisis could see a million workers laid off during the cold spell.
"Everybody saw this coming except, it seems, the government. We have been warning about this for over a year."
The National Grid's original analysis of the likely demand for fuel during the winter, completed in October, suggested that there would be enough gas to maintain supply for customers.
But the organisation's 'Winter Outlook Report' warned that: "Significant demand response will be required if colder than average weather is experienced or gas deliveries are below our base case levels."
Grid bosses insisted they would be reluctant to use their rights to step in to interrupt supplies to protect dwindling fuel stocks - and instead urged generators and major consumers to cut consumption. |
