UK Govt launches consultation on security of gas supply

London (Platts)--17Oct2006

The UK Government launched Monday a consultation on "the effectiveness of
current gas security of supply arrangements to ensure the UK market is as
resilient as possible," the Department of Trade and Industry said.
Energy minister Malcolm Wicks said that the government's energy review
report, published in July, had recognized that "as we become increasingly
dependent on imports, we need to make sure the market is as resilient as
possible to potential interruptions."
"It is for the energy industry to deliver security of supply," he said,
"and we're already seeing investment to the tune of GBP10 [Eur14.84] billion
in new gas infrastructure. But, as a government, we need to make sure the
regulatory framework remains the right one and that the incentives are the
most effective."
The consultation is part of a series the government is launching on the
back of its July energy review. Earlier in October the government began
consulting on changes to the Renewables Obligation system that supports
renewable generation, and several further consultations are expected in the
coming months.
The DTI said the latest investigation will look at "whether existing
arrangements as well as current Government initiatives in areas such as
planning are sufficient, or whether further steps are needed."
It added that further steps could include: a legal obligation on energy
suppliers to have enough gas for commercial and industrial users in a severe
winter; regulating gas storage companies to make sure gas held in storage is
put to best use at the right times of the year; measures to help industry and
households become more flexible and efficient in how they use gas; ensuring
new gas-fired power stations have back-up fuel sources such as oil distillate;
and ensuring the provision of centrally determined levels of gas supply
capacity.
Wicks said the government was "consulting on possible changes to the
energy market and want to hear views and see evidence of whether these, or
other approaches, are needed to make sure the gas keeps flowing."
Speaking at the official opening of the new Langeled gas pipeline with
Norway, Prime Minister Tony Blair said: "Without action to ensure reliable
supplies and replace power plants, there will be a dramatic shortfall in our
energy capacity and risks to our energy security over the next few decades. We
are determined to create the right infrastructure to meet the challenges of
the next century."

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