THE UK could face days of planned power cuts that would see libraries and railways shut down under emergency plans that could come into force in January when temperatures plummet.
A perfect storm of cold weather and gas shortages could lead to the implementation of organised blackouts that could impact on businesses and homes across the country, as well as forcing the closure of railways, libraries and other Government buildings.
As the Government prepares for winter, people familiar with its plans have suggested the ‘reasonable worst-case scenario’ indicates electricity capacity could fall short by a sixth of peak demand.
This could spark emergency blackouts, according to Bloomberg, which claims to have spoken to a source familiar with the Government’s thinking, although they added this scenario is not expected to happen.
If put in place, it would come at the same time as when energy bills are expected to surge past £4,000 as the price cap set by regulator Ofgem more than doubles.
A dire new forecast by energy consultancy Cornwall Insight has predicted this will rise even further in April as bills surge to £4,400, with consumer campaigners such as Martin Lewis demanding action from the Government.
In the event of power shortages this winter, it is reported that those running the gas network will temporarily override commercial agreements to direct the flow of gas.
This would be followed by stopping gas from being sent to power stations, which would see blackouts take place, raising spectres of the 1970s.
Despite coal-fired power stations like this one in Ratcliffe-on-Soar, there could be power outages in the UK this coming winter
Under the emergency plans some services such as railways could be shut down temporarily in an effort to conserve energy
The ‘reasonable worst-case scenario’ includes provision for days of blackouts in the UK if energy usage exceeds supply
It is being reported the Department for Business, Energy and Industrial Strategy has raised concerns about the security of energy supply this winter, and under its contingency plans energy could be rationed leading to the temporary closure of railway lines, libraries and other Government buildings.
This would be despite contingency plans being brought online, including firing up emergency coal power plants and the restoration of Britain’s biggest gas storage site at Rough, and could leave the UK relying on imports from the EU and Norway.
This is fraught with risk though, with Norway recently announcing with it was looking at ways of limiting electricity exports to prevent blackouts in its own country this winter, while France’s nuclear grid which normally exports electricity, only has half its power plants running at the moment due to maintenance and repair issues.
There will be hopes that European nations will be keen to help with gas and electricity supplies after the UK shipped record amounts of gas to the continent in the months following the Russian invasion of Ukraine to shore up supplies there.
A spokesperson for the Department for Business, Energy and Industrial Strategy said the reports of potential blackouts is ‘wilfully misleading and not something we expect to happen
‘We are not dependent on Russian energy imports, unlike Europe, with access to our own North Sea gas reserves, steady imports from reliable partners, the second largest LNG port infrastructure in Europe, and a gas supply underpinned by robust legal contracts, meaning households, businesses and industry can be confident they will get the electricity and gas they need.’
It could raise difficult choices for Boris Johnson’s successor as Prime Minister, with Liz Truss or Rishi Sunak both potentially facing an energy crisis in their first few months in office, in addition to the ongoing cost-of-living crisis which has seen energy bills surge.
Energy consultancy Cornwall Insight predicted bills will increase to around £3,582 in October, up from £1,971 today, before rising even further in the New Year.
Ofgem will set the price cap at £4,266 for the average household in the three months from the beginning of January. This is around £650 more than its previous forecast just last week.
MoneySavingExpert’s Martin Lewis today described the rise as ‘tragic news’ and warned the increased cost would be ‘unaffordable for millions’.
He urged the Government to launch an immediate ‘action plan’, suggesting the implementation of any new mitigating schemes could not wait until the end of the current Conservative leadership contest.
Energy bills has rocketed in recent months due to the rising price of natural gas, partly as a result of the war in Ukraine.
EU prices are at near-record levels amid fears Russia could soon turn off the gas tap completely, with leaders already discussing energy rationing
UK gas prices are soaring after Russia began throttling off supplies to Europe, causing a global shortage as EU leaders scramble for supplies
The cost of living has become a key issue in the Tory leadership race, with Rishi Sunak vowing direct support to help families get through an ‘extremely tough’ winter, while Liz Truss is resisting any ‘handouts’.
Mr Sunak said that, if elected, he would extend the package of support he announced earlier this year, which gave every household £400 off their energy bills, while those on means-tested benefits received a further £650.
Asked today if she would provide direct support to households, Ms Truss told reporters: ‘What I don’t believe in is taxing people to the highest level in 70 years, and then giving them their own money back.’
Today Mr Sunak said: ‘People need proven methods that will deliver for them quickly. So I will use the framework I created to provide further support and give millions of people the peace of mind they desperately need ahead of the winter.
‘In order to keep any one-off borrowing to an absolute minimum I will first seek efficiency savings across Whitehall to provide direct support for families to help with the unprecedented situation we face.’
But a Truss campaign source said the former chancellor had ‘changed his position on cost of living two or three times in the space of a few weeks’.
‘Three weeks ago he was saying more borrowing was irresponsible and inflationary. Has he changed his mind? It’s a mammoth strategic U-turn.’
Ofgem last week announced changes to how it will calculate the price cap on energy bills going forward.
‘While our price cap forecasts have been steadily rising since the summer 2022 cap was set in April, an increase of over £650 in the January predictions comes as a fresh shock,’ said Craig Lowrey, principal consultant at Cornwall Insight.
‘The cost-of-living crisis was already top of the news agenda as more and more people face fuel poverty – this will only compound the concerns.
‘Many may consider the changes made by Ofgem to the hedging formula, which have contributed to the predicted increase in bills, to be unwise at a time when so many people are already struggling.’
However, he also defended Ofgem’s decision, which will hopefully lead to lower bills in the second half of next year.
This will happen because Ofgem is making it easier for energy suppliers to recover their costs. By doing this, fewer suppliers will fail – and the cost of those failures will not need to be passed on to customers.
‘With many energy suppliers under financial pressure, and some currently making a loss, maintaining the current timeframe for suppliers to recover their hedging costs could risk a repeat of the sizable exodus seen in 2021,’ Mr Lowrey said.
‘Given that the costs of supplier failure are ultimately met by consumers through their energy bills, a change which means that this is less likely is welcome, even if the timing of it may well not be.’
Part of the increase in the forecast is also due to rising wholesale energy prices, Cornwall said.
The price cap forecasts from Cornwall showed bills reaching £4,427 in April, before finally dropping slightly to £3,810 from July and £3,781 from October next year.
Dr Lowrey said that the Government must take action to step in and protect households from the runaway costs.
The Government has already promised £400 to every household, and extra help for the more vulnerable.
‘If the £400 was not enough to make a dent in the impact of our previous forecast, it most certainly is not enough now,’ Mr Lowrey said.
He said that the current price cap is not controlling consumer prices and damaging suppliers’ business models, and asked if it was fit for purpose.
‘The Government must make introducing more support over the first two quarters of 2023 a number one priority.
Asked today if she would provide direct support to households, Ms Truss told reporters: ‘What I don’t believe in is taxing people to the highest level in 70 years, and then giving them their own money back’
Today Ms Truss met apprentices during a visit to the Reliance Precision engineering company in Huddersfield
The row came as Mr Sunak pledged billions more to help households with energy bills
Energy bills has rocketed in recent months due to the rising price of natural gas, partly as a result of the war in Ukraine. Germany is, by a long way, the largest importer of Russian gas in the EU, but rising prices affect the UK too
Russia has reduced flows through the Nord Stream 1 pipe which goes to Germany to just 20 per cent capacity, sparking panic
Lib Dems demand recall of Parliament – as Liz Truss rules out ‘handouts’
‘In the longer-term, a social tariff or other support mechanism to target support at the most vulnerable in society are options that we at Cornwall Insight have proposed previously.
‘Right now, the current price cap is not working for consumers, suppliers, or the economy.’
The Tory leadership row over the cost-of-living crisis deepened today as Ms Truss was accused of writing an ‘electoral suicide note’ with her plans for economic reform.
Deputy Prime Minister Dominic Raab, who is supporting Rishi Sunak, sparked fury in the opposition camp as he levelled the claim at his opponent, the current favorite to enter No10.
A poll yesterday suggested the public were more interested in action to control rampant inflation, with fewer than 20 per cent wanting tax cuts.
But Ms Truss’s campaign hit back, saying Mr Sunak appeared to be running on a ‘Labour economic ticket’ that would lead Britain into a recession.
A campaign source said: ‘The suicide note here is Rishi’s high taxes and his failed economic policy that he’s peddled for the past two-and-a-half years when he was chancellor.
A new poll today suggested Ms Truss remains the candidate best place to beat Labour, with voters saying he remains a better choice of PM than Keir Starmer.
She was also boosted today by the backing of Aaron Bell, a backbench Tory who was one of the loudest critics of Boris Johnson.
The two leadership candidates face their first leadership hustings in the Red Wall of ex-Labour seats in the North and Midlands tonight, in Darlington.
Last week the Bank of England warned of a five-quarter recession starting later this year, with inflation potentially hitting 13 per cent.
Sunak supporter Mark Harper today suggested no help for hard-pressed families would be considered – if at all – before the new Tory leader takes office next month.
Boris Johnson has already refused to intervene before he leaves No10 despite pleas from figures including Gordon Brown to hold emergency talks with both candidates.
The Bank of England has predicted that inflation will reach 13% in the coming months
Mr Harper also backed Mr Raab’s ‘suicide note’ jibe.
He told Times Radio: ‘First of all, he’s made it clear that if he’s elected as leader of the party and prime minister there will be more help and I think that will give a lot of people, particularly those who are the most vulnerable, a lot of peace of mind, which compared to his opponent (Liz Truss) in this contest, who’s ruled out more handouts and only going to be delivering help through tax cuts that isn’t going to help pensioners or the most vulnerable … I think people can have a lot of confidence if they look at his (Mr Sunak’s) track record.’
He added: ‘He’s been clear all the way through that he would look at the situation to see what was required to help people … Targeted, limited support for a period has much less of an impact than permanent, large, unfunded tax cuts that are funded by borrowing.
‘Rishi’s also made it clear that, if we need to, we’ll look at delivering some savings from the existing enormous Government budgets to look at funding some of this.
‘I think there’s a very big difference between large, permanent unfunded tax cuts that go to the wealthiest in society, rather than targeted help, targeted at those that are struggling to pay their energy bills, and that’s what Rishi is setting out.’
But Communities Minister Paul Scully, who is supporting Liz Truss, said people must be ‘tearing their hair out’ at Tory in-fighting.
He told Times Radio: ‘It’s a shame that we’re hearing that sort of language. That sort of blue-on-blue, as it’s always known, kind of language is not really helpful, doesn’t really help.
‘People looking from the outside must be tearing their hair out because all we want to do is do the best for the country, for people.
‘But in terms of tax cuts, what Liz has said is the right thing to do – the first Conservative thing to do is don’t take the money from people in the first place, rather than just take money to give it back to them.’
Source: Daily Mail