Energy price cap rethink sparks fears of higher bills –

While government officials have been cautious not to make it look like Russia is blackmailing Europe with its new pipeline, Vladimir Zhabarov, a member of Russia’s upper house, put it bluntly on Thursday: “Nord Stream 2 could be operational as early as this year, otherwise Europe is going to freeze.”

Timothy Ash, a senior strategist at Bluebay Asset Management, said it marked the “first time since the Cold War that Russia has been able to manipulate European markets to get what it wants. This is Europe on its knees. It has no other way to cover its energy needs. Putin played Europe like a fiddle.” 

Gazprom and the Kremlin have repeatedly insisted Russia has been supplying its customers with gas in accordance with existing contracts. 

Russia is Europe’s largest supplier of gas, accounting for 43pc of the EU’s imports last year.

Britain is trying to cut its reliance on fossil fuels. Mr Kwarteng confirmed government plans to decarbonise the UK’s electricity system by 2035 – 15 years earlier than planned – with a ramp up of wind and solar power as well as at least one nuclear plant.  

Gas-fired power plants will still be part of the mix, however, as long as they are coupled with carbon capture technology. 

Publishing its winter outlook for the electricity market, National Grid’s electricity system operator said it expects supply will more than meet demand, albeit it warned of high costs to bring on supplies at short notice. National Grid said it also expects gas markets to balance.

Additional reporting by James Crisp, Nataliya Vasilyeva in Moscow, Justin Huggler in Berlin and Joe Barnes in Brussels

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