Britain braces for winter blackouts under emergency plans for January

2022-08-09

Britain braces for winter BLACKOUTS in January: Government’s ‘doomsday’ planning warns UK could face DAYS of planned power cuts with railway stations and libraries shut down

Cornwall Insight said bills will increase to around £3,582 in October, from £1,971 today, before rising yet again
Ofgem set to put price cap at £4,266 for average household in he three months from the beginning of January
Energy bills and the cost of living is a key issue in the Tory leadership race between Rishi Sunak and Liz Truss
There are reports that a perfect storm of gas shortages from Europe could lead to planned blackouts in winter
This could lead to the closure of libraries, railway stations and Government buildings in a bid to save energy

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.

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

How energy bills have increased over time

2018 – £1,300

2019 – £1,353

2020 – £1,295

2021 – £1,339

(Average household bill – House of Commons Library)

January 2022 – £1,309

August 2022 – £1,971

(Ofgem price cap)

October – £3,582

January 2023 – £4,266

(Cornwall Insight forecasts)

v its forecasts last week

October 2022: £3,359

January 2023: £3,616

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.

MailOnline has contacted the Department for Business, Energy and Industrial Strategy for comment.

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.’

Thousands of ‘energy bill martyrs’ including the head of the Women’s Equality Party and a Church of England curate say they will stop their payments this winter as forecasts showed bills could surge to £4,700 a year.

Up to 75,000 have pledged support to Don’t Pay UK, a civil disobedience campaign urging people to cancel energy bill direct debits.

At the same time, a poll shows rising anger with what some see as the failure of politicians to address a crisis facing millions of households who will struggle to feed their families, keep the lights on and stay warm.

Mandu Reid of the Women Equality Party

Polling by Public First found most Britons expected a boycott of bills or taxes, while a third said there was a risk of public protests echoing the poll tax riots in the early Nineties. Forecasts emerged over the weekend suggesting typical annual bills could rise 270 per cent in a year – driven by Russia’s invasion of Ukraine – taking them to £4,700 from April.

Mandu Reid, of the Women’s Equality Party, tweeted: ‘I’ve just signed up for @dontpayuk’s energy bills payment strike. Energy prices are soaring, millions are falling into poverty, and the Govt is nowhere to be seen… so it’s up to us to take action. They won’t be able to ignore us if we rise up together. #PeoplePower.’

Other signatories include the Reverend Mo Budd, 35, a Church of England curate from south London, who told the Sunday Times: ‘Members of the Church of England are not traditionally known for taking a direct-action approach to political or social crises. However, the scale of the cost of living crisis demands a different response.’

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.

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’

Lib Dem leader Ed Davey today called on the government to recall Parliament and announce and emergency budget to announce action on tackling the energy crisis – as Liz Truss ruled out any ‘handouts’ to help struggling families.

Sir Ed said the Government should cover the shortfall to energy suppliers to ensure they can supply customers at the current rates. The party estimated the cost of the policy would be £36 billion and suggested the windfall tax on oil and gas company profits should be expanded to help cover it.

Sir Ed, in a warning to Tory leadership hopefuls Rishi Sunak and Liz Truss, said: ‘The contest to be leader of the Conservative Party might as well be happening in a parallel universe. Neither candidate has any idea how to help families and pensioners through what could be the toughest winter in decades.

‘We need bold and urgent action to help families pay their bills and heat their homes this winter. There is no other choice.’

Sir Ed added: ‘This is an emergency, and the Government must step in now to save families and pensioners £1,400 by cancelling the planned rise in energy bills this October.’

‘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.

He said her strategy for dealing with inflation and the cost of living crunch – through tax cuts as soon as she takes power – risked casting the Tories into the ‘impotent oblivion of opposition’.

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

What reasons does Ofgem give for changing the energy price cap frequency?

Ofgem has issued this list today of what it describes as ‘the wider benefits of a quarterly price cap’:

‘The energy market moves far more quickly now so six months is too long and it’s not sustainable for people to pay a rate up to six months old’
‘Every six months means either consumers paying more than the current rate for months if wholesale prices fall or suppliers having to sell gas at a loss for months if wholesale prices go up risking collapse of suppliers which costs all consumers more money’
‘It also simply delays the inevitable and means bigger changes twice a year instead of smaller changes four times a year’
‘In the meantime, suppliers could go bust causing huge disruption and extra cost for consumers’
‘The cap cannot artificially hold down prices, but it can stop rapid fluctuations, which we’ve seen in the wholesale market, being passed straight onto consumers and ensures that prices don’t rise fast but fall slowly – the quarterly price cap will strengthen this further’
‘Reduces the need for backwardation as the price cap can more accurately reflect the current wholesale rates’

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.’

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