Households across Britain face a second winter of sky-high energy bills due to a lack of gas storage facilities to prevent supply shortages.
Days after British Gas owner Centrica announced record profits of £969million, energy experts have warned the UK’s continued dependence on imports will put us at the mercy of wholesale price fluctuations.
They argue the Government has failed to ensure the country is fully prepared for a cold winter when increased demand for gas and electricity will bring a repeat of the misery suffered last year.
Global gas prices soared after Russia’s invasion of Ukraine caused supply issues.
Analysis by the International Monetary Fund found household budgets here were hit “harder than any country in western Europe” by energy costs last year.
This was partly because many gas storage facilities were closed in 2017.
They are set to be re-opened but the UK can currently only store enough gas to last a few days – while countries such as Germany and the Netherlands can hold enough to meet months of demand.
Rishi Sunak is set to announce fresh investment in Britain’s oil, gas and renewable energy industry to ensure tyrants like Vladimir Putin can never again use energy as a weapon to blackmail.
The Prime Minister and Energy Security Secretary Grant Shapps will meet industry leaders this week to discuss boosting home-grown production and storage.
But energy insiders fear a harsh winter could leave millions unable to pay their bills. They have urged Chancellor Jeremy Hunt to draw up plans to bail out the poorest households with further subsidies on fuel bills, the Sunday Express has learned.
A spokesperson for Energy UK, which represents suppliers, said: “While prices have fallen, they are still extremely challenging for many customers and further increases cannot be ruled out.
“This winter will be difficult for many households and businesses. It is therefore essential the Government is ready with a targeted mechanism for customer support which can respond to events.”
Leading think tank the Henry Jackson Society is also warning the Chancellor must be prepared to offer further support, with subsidies targeted at people on lower incomes to reduce the cost to the Treasury.
It will say in a report this week: “Experts agree the winter of 2023/24 is not going to be any easier than the previous ones.
“It could be even worse.”
The report will add: “We urge the Government to continue with price caps (and similar subsidies for energy bills) whenever necessary to help households and businesses survive the winter.”
Centrica’s announcement of record six-month profits for British Gas – up from £98million a year earlier to £969million – was met with anger by customers.
The surge has been blamed on energy watchdog Ofgem raising its price cap to allow suppliers to charge more.
It currently limits annual bills to £2,074 for a typical household, down from £4,279 in November last year.
The Government’s Energy Price Guarantee also limits household bills but this is set at £3,000, which means costs could increase significantly. Industry insiders say allowing bills to come close to the £3,000 mark would leave millions unable to pay.
Ofgem figures showed 845,555 households were in arrears on their gas bill in the first quarter of this year, up from 598,300 in 2019.
Labour on Saturday night claimed the loss of storage facilities had cost £1.7billion by forcing the nation to buy gas at higher prices rather than buying when the charge was low and storing it.
Shadow Chancellor Rachel Reeves said: “Yet another failure on energy security hasn’t just left families paying more, it’s left us exposed and reliant on others.”
But the Tories hit back and accused Labour of putting 213,000 jobs at risk with plans to ban new oil and gas licenses.
A Conservative analysis found the policy could cost an additional £87billion in lost revenues, with Labour abandoning up to 1.16 billion barrels of oil and more than 19.8 billion therms of gas.
Mr Shapps said: “Energy security is national security. Since the illegal invasion of Ukraine the Government has driven Putin from our energy market, paid around half of a typical family’s energy bill and grown our economy by driving forward major energy projects.
“This week we will go even further, forging ahead with critical measures to power up Britain from Britain – including supporting our invaluable oil and gas industry, making the most of our home-grown energy sources and backing British innovation in renewables.”
