This autumn’s struggles with soaring gas prices shows ministers the market alone can’t deliver both security and affordability Each autumn, the Department for Business, Energy and Industrial Strategy (BEIS) and the energy regulator Ofgem present a statutory security of supply report to parliament. Last December, the department concluded that the “gas system has delivered securely to date and is expected to continue to function well”. As has become BEIS’s mantra, the report noted that the UK benefits from “a diverse range of supply sources and sufficient delivery capacity to more than meet demand”, which is right when it comes to physical security of supply. Around half the gas we consume comes from the North Sea and we get the rest directly via pipeline from Norway – via two interconnectors from continental Europe – and as liquefied natural gas (LNG) from the global market. It is the case that the UK has enough pipes and terminals to deliver all the gas that we may need and more. However, the National Grid’s recent gas winter outlook 2021-22 makes clear the cause of the current crisis, explaining that: “the underlying market arrangements in the UK are predicated on the basis that the market will provide and that the market will balance itself”. This speaks to “price security”, the price UK consumers need to pay in order to attract sufficient gas to meet national demand. Michael Bradshaw is professor of global energy at Warwick Business School and a co-director at the UK Energy Research Centre Continue reading...