The National Grid’s electricity system operator and gas system operator will release one of their regular winter outlook reports later.
They are designed to set out supply and demand scenarios as the weather gets colder and energy consumption tends to peak.
Amid an energy security and price crisis, this year’s outlook report has taken on particular significance, especially after the energy regulator Ofgem warned earlier this week that “due to the war in Ukraine and gas shortages in Europe, there (is) a significant risk that gas shortages could occur during the winter”.
“As a result, there is a possibility that (the UK) could enter into a gas supply emergency.”
There are lots of things that will impact the National Grid’s report and ultimately how confident it feels that the lights will stay on.
Supply is a critical issue
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Risk of emergency gas shortage
About half of the UK’s gas comes from the North Sea, but we import the rest either through pipes, or interconnectors, from Norway, the Netherlands and Belgium or via liquid natural gas shipments (LNG) from big producers like America and Qatar.
This supply is vital not just because 85% of UK homes rely on gas for heating, but also because the UK gets 40% of its electricity from gas fired power stations.
And although the UK doesn’t get very much gas at all from Russia, Europe does. If Russia further throttles supply to the continent, there could be knock on effects for the UK in the form of supply issues, rocketing prices, or both.
The UK is particularly exposed because of its limited gas storage facilities, meaning it can’t fall back on its own reserves in the same way that Germany can, for example.
Additionally the UK has to compete on the global market, particularly against Asia, for LNG shipments which make up about 17% of the gas supplied to the UK through production and imports.
UK’s large LNG imports infrastructure is an advantage
The UK has a big LNG imports infrastructure which gives it an advantage, but the predicted stability of this market will have a big impact on the National Grid’s risk assessment, as will any further predicted issues with the supply of electricity generated by France’s nuclear power stations, many of which have been offline for maintenance.
The National Grid will also estimate how much wind and solar power we can expect to generate in the coming months too, and how much “back up” electricity can be generated by some of the UK’s remaining coal fired power stations.
This brings us to the issue of demand.
In a tight situation, if supply cannot be increased, demand must be reduced.
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Prime Minister Liz Truss has pledged there won’t be energy rationing this winter but that is a bold promise to make.
Writing in The Times today, ahead of the inaugural European Political Community summit in Prague, she urged European leaders to work together “this winter so we keep the lights on across the continent”.
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But other European countries have already asked consumers to reduce consumption during peak hours and have been open about the possibility of energy rationing, beginning with big industry, should that be necessary.
There could be public awareness campaign asking people to use less energy
The National Grid has previously stressed that the blackout risk for homes is “very unlikely”, but in the spirit of preventing an emergency shortage is also consulting on measures like paying homes and businesses to reduce electricity and gas consumption if asked.
Separately the government might launch a public awareness campaign to ask (rather than tell) consumers use less.
And it is worth saying that despite Liz Truss’s promise, the government and the National Grid routinely updates plans for what is known as a “reasonable worst case scenario”, in which a combination of very cold weather and serious supply issues causes an energy shortage that requires rationing, rather than risking uncontrolled blackouts.
If this were to happen, gas fired power stations could be closed and big industrial users could be prevented from using energy.
There is also the possibility of electricity to households being turned off during critical hours, although the government has stressed this is unlikely.
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The last blast furnaces left operating in Britain could see their fate sealed within days, after their Chinese owners took the decision to cut off the crucial supply of ingredients keeping them running.
Jingye, the owner of British Steel in Scunthorpe, has, according to union representatives, cancelled future orders for the iron ore, coal and other raw materials needed to keep the furnaces running.
The upshot is that they may have to close next month – even sooner than the earliest date suggested for its closure.
Read more: Thousands of jobs at risk as British Steel consults unions over closure
The fate of the blast furnaces – the last two domestic sources of virgin steel, made from iron ore rather than recycled – is likely to be determined in a matter of days, with the Department for Business and Trade now actively pondering nationalisation.
The upshot is that even as Britain contends with a trade war across the Atlantic, it is now working against the clock to secure the future of steelmaking at Scunthorpe.
The talks between the government and Jingye broke down last week after the Chinese company, which bought British Steel out of receivership in 2020, rejected a £500m offer of public money to replace the existing furnaces with electric arc furnaces.
The sum is the same one it offered to Tata Steel, which has shut down the other remaining UK blast furnaces in Port Talbot and is planning to build electric furnaces – which have far lower carbon emissions.
These steel workers could soon be out of work
However, the owners argue that the amount is too little to justify extra investment at Scunthorpe, and said last week they were now consulting on the date of shutting both the blast furnaces and the attached steelworks.
Since British Steel is the main provider of steel rails to Network Rail – as well as other construction steels available from only a few sites in the world – the closure would leave the UK more reliant on imports for critical infrastructure sites.
However, since the site belongs to its Chinese owners, a decision to nationalise the site would involve radical steps government officials are wary of taking.
They also fear leaving taxpayers exposed to a potentially loss-making business for the long run.
The dilemma has been heightened by the sharp turn in geopolitical sentiment following Donald Trump’s return to the White House.
The incipient trade war and threatened cut in American support to Europe have sparked fresh calls for countries to act urgently to secure their own supplies of critical materials, especially those used for defence and infrastructure.
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Gareth Stace, head of UK Steel, the industry lobby group, said: “Talks seem to have broken down between government and British Steel.
“My advice to government is: please, Jonathan Reynolds, Business Secretary, get back round that negotiating table, thrash out a deal, and if a deal can’t be found in the next few days, then I fear for the very future of the sector, but also here for Scunthorpe steelworks.”
British Steel declined to comment.
UK
Prince Andrew’s Pitch@Palace branded ‘crude attempt to enrich himself’ as Chinese spy documents set to be released
Prince Andrew’s efforts to make money from his Pitch@Palace project have been branded as a “crude attempt to enrich himself” at the expense of “unsuspecting tech founders”, as new documents may shed more light on what he and his team have been attempting to sell.
Today is the deadline for documents to be released relating to Prince Andrew‘s former senior adviser Dominic Hampshire and his interactions with the alleged Chinese spy Yang Tengbo.
In February, an immigration tribunal heard how the intelligence services had contacted Mr Hampshire about Mr Yang back in 2022. Mr Yang helped set up Pitch@Palace China, a branch of the duke’s scheme to help young entrepreneurs.
The alleged Chinese spy, Yang Tengbo, has links with Prince Andrew
Yang Tengbo. Pic: Pitch@Palace
Judges banned Mr Yang from the UK, saying his association with a senior royal had made Prince Andrew “vulnerable” and posed a threat to national security. Mr Yang challenged that decision at the Special Immigration Appeals Commission (SIAC).
Since that hearing, media organisations have applied for certain documents relating to the case and Mr Hampshire’s support for Mr Yang to be made public. SIAC agreed to release some information of public interest. It is hoped they may include more details on deals that he was trying to do on behalf of Prince Andrew.
So what do we know about potential deals for Pitch@Palace so far?
In February, Sky News confirmed that palace officials had a meeting last summer with tech funding company StartupBootcamp to discuss a potential tie-up between them and Prince Andrew relating to his Pitch@Palace project.
The palace wasn’t involved in the fine details of a deal but wanted guarantees to make sure it wouldn’t impact the Royal Family in the future. Sky News understands from one source that the price being discussed for Pitch was around £750,000 – there are, however, reports that a deal may have stalled.
Photos we found on the Chinese Chamber of Commerce website show an event held in Asia between StartupBootcamp and Innovate Global, believed to be an offshoot of Pitch.
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Who is alleged Chinese spy, Yang Tengbo?
Documents, released in relation to the investigations into Mr Tengbo, have also shown how much the duke has always seen Pitch as a way of potentially making money. One document from 21 August 2021 clearly states “the duke needed money at the time, and saw the relationships with China through Pitch as one possible source of funding”.
But Prince Andrew’s apparent intention to use Pitch to make money has led to concerns about whether he is unfairly using the contacts and information he gained when he was a working royal.
Norman Baker, former MP and author of books on royal finances, believes it is “a crude attempt to enrich himself” and goes against what the tech entrepreneurs thought they were signing up for.
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He told Sky News: “The data given by these business people was given on the basis it was an official operation and not something for Prince Andrew, and so in my view, Prince Andrew had no right legally or morally to take the data which has been collected, a huge amount of data, and sell it…
“And quite clearly if you’re going to sell it off to StartupBootcamp, that is not what people had in mind. The entrepreneurs who joined Pitch@Palace did not do so to enrich Prince Andrew,” he said.
Rich Wilson was one tech entrepreneur who was approached at the start of Pitch@Palace to sign up, but he stepped away when he spotted a clause in the contract saying they’d be entitled to 2% equity in any funding he secured.
He feels Prince Andrew is continuing to use those he made a show of supporting.
He said: “It makes me feel sick. I think it’s terrible – that he is continuing to exploit unsuspecting tech founders in this way. A lot of them, I’m quite grey and old in the tooth now, I saw it coming, but clearly most didn’t. And a lot of them were quite young.
“It’ll be their first venture and you’re learning on the trot, so to speak. So to take advantage of people in such a major way – that’s an awful, sickening thing to do.”
We approached StartupBootcamp who said they had no comment to make, and the Duke of York’s office did not respond.
With reports that a deal may have stalled, it could be a big setback for the duke – especially with questions still about how he’ll continue to pay for his home on the Windsor estate now that the King no longer gives him financial support.
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