UK and EU ‘urgently’ need to agree emergency energy plan, say Lords

The UK government should “urgently” strike an agreement with the EU to co-operate on emergency energy supplies in case Russia triggers a severe shortage by cutting off gas exports to the continent, an influential House of Lords committee said on Thursday.

The Lords economic affairs committee warned that there was no concrete accord between Britain and the bloc over managing an energy supply emergency, despite their interdependency in relation to the trade of gas and power via subsea cables and pipelines.

“This is something we need to grip urgently,” committee chair Lord George Bridges told the Financial Times. “What was seen to be very unlikely but a few months ago is now seeming more likely, and therefore we have to have a plan.”

Bridges’ comments came after the EU on Wednesday asked all member states to reduce gas demand by 15 per cent from August 1, warning of the severe risk of further cuts to Russian supplies.

Gas interconnectors between Britain and the continent have in recent months been running at maximum capacity to help the bloc fill its gas storage facilities ahead of the winter, with high volumes of liquefied natural gas arriving at UK ports before being sent on to the mainland. However, Britain, which has limited gas storage capacity, traditionally relies on imports from the EU during the winter, when demand is greater.

Unusually, Britain has since April also been a net exporter of electricity to the EU, as gas-fired power stations take advantage of increased LNG cargoes to generate electricity destined for member states including France, whose large network of nuclear reactors is experiencing difficulties. Britain normally relies on net imports from the mainland, especially if wind farms and solar are not generating significant amounts.

The committee’s plea echoes comments by ENTSOG, which represents European gas groups. It said last month that political arrangements were needed across Europe “to know what we can expect from each other as neighbouring countries in the case of a severe crisis”. 

Individual countries each have emergency plans, but energy companies have warned that these were designed to address short-term outages at, say, a gasfield or pipeline rather than prolonged shortages.

The EU on Wednesday published its own emergency plan for conserving gas. The plan noted that, since the start of this year, the bloc had received 14bn cubic metres more gas via pipelines from four regions, including the UK, but did not mention a supply agreement with Britain.

“The [European] Commission will remain vigilant to protect the single market,” it added.

Under the UK’s gas emergency plan, interconnectors would be shut off by National Grid — which oversees the energy system — in the event of a severe shortage that threatened the system’s stability.

An EU official insisted the European Commission was “in close contact with the UK government on these issues”, adding that the post-Brexit UK-EU Trade and Cooperation Agreement set out rules “for co-operation on risk preparedness and an obligation not to endanger mutual security of supply”.

The UK government did not directly respond to the question of an energy co-operation agreement but insisted the country had “no issues with either gas or electricity supply” and was “fully prepared for any scenario”.

The economic affairs committee also called on ministers to publish an energy demand reduction strategy, following an inquiry into security of supplies and how to reach net zero emissions.