Centrica, owner of British gas, has warned soaring prices could raise household bills and cause energy-intensive businesses in the UK and Europe to curb activity this winter.
Demand for gas peaks in winter while gas storage replenishment rates have lagged throughout the summer. Centrica has stated that a prolonged or particularly cold winter will drive prices higher and that energy-intensive companies will be forced to curb production.
Some analysts believe such a scenario would only emerge at the peak of winter demand. The Department of Business, Energy and Industrial Strategy (BEIS) said the UK has “highly diverse sources of gas supply” but also that the country’s “exposure to volatile global gas prices underscores the importance of our plan to build a robust domestic renewable energy sector”. While daily demand for gas can be met, limited stores present the key risk, especially if a long, cold winter transpires.
Large manufacturers and energy-intensive industries have also raised concerns about the impact high gas prices on electricity prices.
Adapted from an article in the Financial Times