Energy: Pub landlord warns industry to brace for ‘carnage’
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The European Commission has announced it is working “flat out” on tackling the crippling costs by issuing emergency interventions and longer-term structural reforms. Since Russia’s invasion of Ukraine, energy prices have soared to record levels, as Vladimir Putin has repeatedly threatened to cut Europe off its gas supply. Even though the UK imports very little energy from Russia, its presence in the free market means that it is vulnerable to price rises in Europe.
However, these prices could soon fall, as the European Commission announced it is working “flat out” on an emergency package to lower bills.
It also announced the development of a longer-term “structural reform of the electricity market” while efforts to fill gas storage facilities have beaten expectations and are currently ahead of schedule.
The EU as a whole is within touching distance of its 80 percent of gas supplies by October 1, currently at 79.94 percent.
Over the past year, Putin has tried to manipulate the EU’s reliance on Russian gas by reducing flows, which has sent prices skyrocketing.
Experts have warned Russia’s invasion of Ukraine has been largely bankrolled by oil and gas revenues from the EU.
As such, a reform to the EU’s energy market could be a major blow to Putin’s war efforts as prices fall.
The day-ahead UK wholesale price per therm fell by more than 20 percent to 447p on Tuesday, while month-ahead contract prices dropped by 25 percent to 473p per therm.
While prices are significantly lower than the record highs faced by Europe earlier this year, it is still 12 times higher than the figures at the start of 2021.
It comes after Business Secretary Kwasi Kwarteng noted progress is being made in efforts to reopen the UK’s biggest gas storage facility.
The energy group Centrica, which owns British Gas, is looking to reopen the Rough facility, located under the North Sea off the east Yorkshire coast.
Mr Kwarteng said yesterday: “After months of work, the UK oil and gas regulator has today granted the required approvals and consents.”
Reopening a gas storage facility could be a significant move for Britain’s energy security, as the country has had very little storage capacity since Rough’s closure in 2018.
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Meanwhile, European countries have been scrambling to fill up their gas storage facilities ahead of winter, as fears grow that Putin will completely cut off Russian gas supplies.
The German economy minister Robert Habeck predicted gas prices in Europe would fall further as soon as Germany, which is Europe’s largest gas consumer, hit its targets for storage.
However, Europe’s plans to fill up energy stocks could be dealt a major blow as Russia has once again halted gas flows through the Nord Stream 1 pipeline, which flows from Russia to Germany through the Baltic Sea.
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