Winter is coming, Jonathan Mills knows. It’s his job to ensure that the season won’t be too cold and bitter for Britons. Mills, who was named the UK’s director-general of winter resilience this month, has been tasked with staving off the worst effects of the country’s energy problems. The Russia-Ukraine war, in particular, has squeezed global supplies of oil and natural gas, sending prices soaring.
The shortage of fuel will mean that Britons will pay unprecedentedly high bills to heat their homes this winter. In a worst-case scenario modeled by the government, up to 6 million households will be hit with power cuts, and industrial gas users may face limits on how much gas they consume.
Mills was appointed precisely to avoid this scenario. A former director of energy strategy in the government, Mills also worked on reforming the British electricity market during a stint at the Department of Energy and Climate Change. This work included investing in a new generation of power stations and ensuring secure power generation — the latter being precisely the assignment ahead of him this year.
Replacing Russian gas imports
Last year, Russian imports made up 4% of gas used in the UK, 9% of oil, and 27% of coal — not as much as the EU, as a government note points out, but enough to be rattled by the war’s disruptions to the energy markets.
Other countries are now competing with the UK to buy from its main suppliers, such as Norway and the US. The UK’s gas storage levels also are low, according to data from Gas Infrastructure Europe. On June 28, the UK had 9.2 terawatt-hours’ worth of gas in storage, compared to Austria’s 42.6 and Germany’s 147.3. Even Latvia had more gas in its stores than the UK.
In response to the shortages, the UK is keeping open coal-fired power plants that were scheduled to close this year, even though the country had committed to phasing out all coal power by next October. And under the government’s emergency gas plan, the UK will shut off supplies to the EU through its two-way interconnector pipelines if the Russian gas crisis worsens.
It will fall in part to Mills, the winter resilience czar in charge of ensuring that fuel supplies last the season, to determine whether to close that tap or not.
The UK faces power cuts and steep energy bills this winter
Ofgem, the government’s energy regulator, sets a price cap for average annual energy bills paid by households. In April, the price cap was revised upwards by 54%, from £1,277 ($1547) to £1,971 per year.
Cornwall Insight, a research firm, projected that further revisions are in store — to £2,980 for the last quarter of 2022 and then to £3,003 for the first quarter of 2023.