The problem of an erratic energy supply leading to possible power cuts and certain price rises has been kept off the political debate, but it’s now inescapable.
Gas price rises have meant that smaller energy companies cannot meet their price commitments and may be forced out of business. Two companies are now in talks with the Business Secretary, Kwasi Kwateng, about a bailout. There will be others.
Wholesale gas prices have risen by 250 per cent since January. Prime Minister Boris Johnson is expressing boosterish confidence that the problem is only “temporary”. This seems optimistic.
The crisis coincides with the PM’s arrival in New York to call on world governments to do more to cut carbon emissions. But the rush for renewables cannot be at the expense of a stable energy supply.
We want to get to net zero but we also have to boil our kettles. One factor in all this has been that the wind has dropped, as it does. Renewables are less reliable than coal and gas — and gas imports come from Russia.
Many of these problems are global. But some actions by the Government here have not helped. The decision, for instance, to drastically cut our strategic Rough gas storage facility off the Yorkshire coast now seems risky.
We are increasingly reliant on interconnectors bringing energy from Norway and Germany, but what if their supplies are at risk?
We will have to act. As taxpayers we shall probably have to pay to bail out endangered energy companies and as consumers we shall certainly have to pay more.
This in turn feeds inflationary pressures and demands on public finances at a time when we are not yet creating the economic growth to pay for them.
Hard choices are unavoidable.