UK energy crisis – live: Action on gas prices needed ‘now’, with factories ‘days’ from shutdown, industry says

Different areas of manufacturing are “intrinsically linked” and the failure of one will affect the entire industry, EIUG chairman Dr Richard Leese said.

He told BBC Breakfast: “We’ve already seen the tip of the iceberg with fertiliser consequences – energy intensive industries manufacture goods throughout all supply chains, everything from minerals to paper goods.

“All of that is intrinsically linked, for example, when the fertiliser factory closed or paused, the CO2 is not just needed for food – we use it in the cement industry to supress explosion risk.

“Those goods are used throughout the supply chain, it’s all interlinked, so if one industry sector is affected, we’re all affected.”

The government is reportedly planning to introduce new “green” charges on gas that could add £170 a year to gas bills.

A new strategy commits the government to cutting the price of electricity and imposing a levy on gas bills, The Times has reported.

The strategy will be published before the Cop26 climate conference in Glasgow next month.

A spokesperson for the Department for Business, Energy and Industrial Strategy said: “The UK’s exposure to volatile global gas prices underscores the need to move away from fossil fuels to protect consumers in the long term.

“We want to encourage people to take up more efficient technologies such as heat pumps and electric vehicles by removing levies on electricity over time, working with industry to drive down costs of technologies and ensure they are as affordable as current options.

“We’ll set out our upcoming heat and buildings strategy shortly. No decisions have been taken on our approach.”

The UK and India had agreed on Friday plans to transform their power sectors to generate clean energy.

The meeting took place as both nations – among many countries – are reporting severe issues relating to energy supply and costs.

The UK has seen sky-high energy prices as a result of lower supply of natural gas, and parts of India has been plunged into darkness due to a lack of coal to fuel power plants.

The virtual meeting was held between British business secretary Kwasi Kwarteng and Indian union minister for power and new and renewable energy RK Singh.

The ministers spoke on the ongoing energy transition activities in their countries such as renewables, including solar, offshore wind, storage, electric vehicles (EVs) and alternative fuels, a press release from India’s Ministry of Power says.

The agreed on an action plan on power and clean transport, renewables, green finance and clean energy research as part of Roadmap 2030, which was launched by both countries’ PMs during India-UK Virtual Summit in May.

Energy supplies are increasingly being used as a “weapon” by foreign powers to put pressure on other countries, the defence secretary has said.

Ben Wallace’s warning about “unconventional” weapons came as No 10 raised fears that a new gas pipe line being built by Russia could have security implications for the UK.

And closer to home, the French government’s Europe minister Clement Beaune threatened this week to use energy supplies as a way to “put pressure” on Britain to comply with the Brexit agreement, amid tensions over fishing licences.

Our policy correspondent Jon Stone reports:

More international news for a moment, as Lebanon is plunged into darkness by a power outage expected to last for several days.

The country’s two largest power stations have been forced to shut down due to a fuel shortage, a government official told Reuters on Saturday.

Refresh our breaking story for updates:

India’s Prime Minister Narendra Modi was warned today that capital city Delhi could face a “severe” power crisis as it has endured a coal shortage for the “third month in a row”.

Delhi Chief Minister Arvind Kejriwal wrote to the PM to surge his government to take action to make sure enough coal and gas is delivered to power plants supplying electricity to the city.

He tweeted: “Delhi could face a power crisis. I am personally keeping a close watch over the situation. We are trying our best to avoid it. In the meanwhile, I wrote a letter to Hon’ble PM seeking his personal intervention.”

Today, millions of people in two northern Indian states – Rajasthan and Punjab – have been plunged into blackouts of up to four hours each after a number of power plants were shut due to the lack of coal.

The energy crunch is biting harder in eastern Europe than in the West, a Bloomberg News journalist has said.

Chief energy correspondent Javier Blas said Kosovo’s largest exporter – the Ferronikeli nickel factory – has shutdown all production.

It comes as leaders in the British manufacturing industry warned today that some factories are just days away from shutting down due to record gas prices.

Albania’s government has declared a state of emergency and is today expected to announce energy emergency measures.

It comes after Serbia’s government warned earlier this week that it could choose to ban electricity exports during the winter to lower domestic power prices.

Industry leaders have put forward three proposals to the government on Friday to avoid interruption to supply chains this winter.

They spoke with business secretary Kwasi Kwarteng, and warned him that electricity costs five times their normal levels were “not sustainable” for factories.

Dr Richard Leese, the chairman of the Energy Intensive Users Group (EIUG), told BBC Breakfast: “Winter cost containment measures looking at the carbon costs particularly that are placed on energy intensive users.

“There is partial relief to some energy intensive but it’s not widespread – we’re subject to qualification rules that are legacy rules from European Union membership.

“Our second measure is to look at network costs within the UK. Network costs are distributed differently to other European countries in terms of energy intensive industries getting a higher proportion of the network costs, and that’s something within Ofgem’s gift.

“The third measure is to look at emergency measures, should any of our energy intensive plants need to shut down rapidly, looking at the threshold for emergency relief to try and prevent lasting damage to very expensive plants and equipment.”

Some manufacturing industry heads have warned that some factories are just days from temporarily shutting down due to the gas price crisis.

David Dalton of the British Glass Manufacturers Association said some companies were “days away” from halting production.

Gareth Stace, director general of UK Steel, told ITV News that, unless the government takes action, the steel sector will see “more and more pauses of production in certain times of the day and those pauses will become longer.”

Andrew Large, director general of the Confederation of Paper Industries, told ITV News that he could not rule out factories having to suspend production due to increased energy costs.

The industry heads held talks on Friday with business secretary Kwasi Kwarteng but said the meetings ended with no immediate solutions.