Calls to diversify and decarbonise energy mix as gas prices spike
Industry group Oil & Gas UK said wholesale prices for gas are up 250% since January - with a 70% rise since August.
Exposure to global market prices is of particular concern to the UK, which relies on natural gas for half of its electricity generation and, in 2020, imported 60% of its natural gas supply according to The Department for Business, Energy and Industrial Strategy.
The current high prices have already led two large fertiliser plants to close. This has resulted in a cut of the supply of carbon dioxide (a by-product of fertiliser production) to the food industry and other manufacturers.
The price increases stem from a global surge in demand following a cold winter where gas storage facilities were depleted.
Recent nuclear reactor outages and a fire at the UK’s key interconnector to France have then further raised demand for gas.
Frank Gordon, director of policy at the REA, said: “The ever-present risk of high and volatile natural gas prices demonstrates the importance of a diverse decarbonised energy system – using all the different renewable and clean technologies available to us, including bioenergy, energy storage and marine, all working together to ensure a resilient system and lowering exposure to international prices and lowering emissions. We must also have a renewed focus on energy efficiency and insulating our homes to reduce our overall energy usage as a first step.
“Green sources of CO2 can be captured at ‘BECCS’ (plants which capture carbon from bioenergy generation) and green gas plants and this could help with shortages in CO2 supply to industry in the future, reducing reliance on the current small number of suppliers. We have also seen shortages of chemical fertiliser from fossil sources – but biofertiliser (digestate from green gas plants) is a brilliant replacement for mineral fertilisers at lower cost to the planet and compost (produced from food and /or garden waste) brings many soil improvement benefits and slow release fertilisers.
“Overall, renewables and flexibility sources can avoid the issues we have seen with volatile fossil fuel prices and deliver a range of other products, from green gas to green C02 and fertilisers.”