And so it came to pass last week: demand rocketed; spot prices all across Europe rose strongly in consequence; market players threw everything they had into these high prices (including some large industrial gas users, who sold gas back to the Grid); and we got by. As a demonstration of efficient markets in operation, this one was pretty good. It's all the more impressive when you know that (a) last year 'Rough', the UK's only really big gas storage facility put up the shutters for the last time; and (b) some of our usual sources of gas had some unfortunately-timed difficulties just when it mattered.
But it was a relatively close thing. The energy minister Claire Perry was asked if the government might be re-considering its 'brave' decision not to give public financial support for a new gas storage facility to replace Rough - her predecessors spurned Centrica's bid for a big hand-out, as we noted several years ago - and she gave it short shrift again last week. That's quite a contrast with the electricty sector, where large amounts of cash are spent in retainers for generators guaranteeing winter capacity - the 'Capacity Market'. So: 'market solution' it remains. A good job the global LNG market is awash with supply just now ...
So: did I just write "market players threw everything they had ..." ? Yup. How, then, do we account for this?
Nice to know who your friends are.
(1) ... and makes a nonsense of the idea you'll read here and there, that we could 'decarbonise' completely, and that we don't need gas at all.
(2) There is of course the little story of Mr Eggar and his *touch on the tiller* we've told before: it's how we got the IUK in the first place.
(3) We've also recounted several times how the UK LNG importing sector was rebuilt in the 2000's by the private sector, to a capacity that completely replaces our North Sea gas production - and all with no goverment intervention, direction nor public money of any kind.