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5 Jul, 2022 09:02

UK industry comments on gas rationing plan

Some industrial plants will not even survive two days if the government introduces emergency measures, FT reports
UK industry comments on gas rationing plan

Gas rationing, which could be introduced under the UK government’s emergency plan, would lead to the closure of many factories, some of which would be unable to survive even two days, the Energy Intensive Users Group warned, according to the Financial Times (FT).

Business Secretary Kwasi Kwarteng is scheduled to discuss the details of the emergency plan with industry representatives later this week. According to an FT government source, the ministers do not anticipate gas rationing this winter. This measure, one official said, is provided for the “extreme” and “hugely unlikely” scenario in which Russia cuts off all gas supplies to Europe and Norway then cuts off supplies to Britain as well.

The view is that in the current situation it is unlikely there will be gas shortages but as we move into winter, things could change,” Dave Dalton, chair of the Energy Intensive Users Group, which represents the UK’s heaviest industrial energy users, said.

Dalton, who is also the CEO of British Glass, said the industry hopes for “a bit more honesty” from the government on the matter of gas rationing.

“Glass is one of the most exposed [sectors] as it is a continuous process that is heavily dependent on gas. We could only survive a matter of hours, maybe over a day but it wouldn’t be two days,” Dalton explained, as quoted by FT.

The British Ceramic Confederation also warned against any “quick or short-notice shutdown” of gas supplies, saying it would be highly detrimental to the industry and, therefore, “robust contingency plans” are required.

The confederation previously expressed concerns over the soaring international energy prices, as well as the government’s policy of significant cap reductions on carbon emissions.

Other sectors, according to FT, could more easily adapt to changes in the energy supplies, but they have also called for contingency plans, warning of the dangers of operating on a stop-start basis.

European gas prices have more than doubled this year, reaching a historic high of $3,900 per thousand cubic meters in early March, after Russia launched its military operation in Ukraine. Amid reduced Russian supplies and an impending strike in Norway, a major energy supplier for the continent, further price hikes are expected.