Friday, 26 July 2013

Payments to industry to cut gas use in a gas “emergency” http://www.energy-broker.co.uk/payments-to-industry-to-cut-gas-use-in-a-gas-emergency/

Industrial gas users could be paid by the National Grid to turn off some or all of their machinery if the UK ever faces a gas supply “emergency”.

Under new plans by the regulator Ofgem, large gas consumers will be able to put themselves forward to cut their gas demand, in contracts bid for in advance, if there is a shortage.

The payments are one strand of a shake-up to the rules to make sure the UK can always get enough gas. Since the North Sea reserves have dwindled, the UK depends significantly on gas shipments from overseas.

The current contingency plan for a crisis – for example if a shipper fails to buy enough gas to cover its UK customers’ obligations – it has to pay charges to the National Grid, the national gas pipeline operator. This is called the “cash-out” price and it is frozen at a relatively low level. On top of this, gas supplies could be restricted to customers.