British industry is at risk of repeated disruption to its gas supplies during cold weather unless energy companies are forced to invest in additional storage facilities, engineering leaders have warned.
The recent cold “snap” prompted National Grid to ask 95 firms on ‘interruptible’ gas contracts, to switch off power and switch to other means of generation. Customers on interruptible contracts receive a discount for allowing their supplied to be cut off at times of peak demand. The firms affected include large manufacturers such as Vauxhall, British Sugar and Cains Brewery.
Cains’ joint managing director Sudarghara Dusanj said the brewery was given 12 hours’ notice to stop using its supply and faced “substantial penalties” if it used gas after that point. “We have had the brewery for eight years and this is the first time we have ever had to do this.”
National Grid has also issued four “gas-balancing alerts” so far this month. The alerts warn industry that gas supplies could soon not be enough to meet demand.
Manufacturers’ organisation the EEF said that if National Grid was not able to disrupt gas supply to interruptible contract holders, the UK energy system would not have been able to meet the needs of all consumers. The result would have been that major industrial customers on firm gas supply contracts would have been cut-off.
Roger Salomone, the EEF’s energy advisor, said that the energy industry had been slow to react to the changing nature of gas supply, with the UK no longer able to rely on the luxury of ramping up supply from easily accessible regions like the North Sea. As a result, the UK had significantly lower storage capacity relative to demand than most other gas-consuming economies.
“Gas storage has not kept pace with our increased dependency on imported supplies,” said Salomone. “We desperately need more gas storage and unless that happens, then there will be a continued risk of disruption to supply during very cold periods.”
Salomone said the EEF had been lobbying the government on the matter for several years.
“There needs to be greater regulation in the gas supply sector,” he said. “A legal requirement for gas companies to have enough storage to match their obligations is needed.”
| COPING WITH THE BIG FREEZE |
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Despite prolonged snowfall days, most engineering and manufacturing firms have coped well with the bad weather. Sheffield-based heavy engineering firm Davy Markham continued to operate without any major impact on its business, and claimed preparation was the key.
 Managing director, Kevin Parkin, said: “It’s not the first time in our 170 year history that we have encountered heavy snow, so we were well prepared. The company has invested in tractors and snow ploughs which meant that we could keep access ways on-site clear. We also had good supplies of grit to keep pavements and roads safe. I think that only two employees failed to get in because of snow.”
The only real impact on Davy Markham’s business was outside of its control. Parkin said that the Police were slower to issue the licenses required to enable it to transport its huge pieces of equipment along motorways. |
© PE Publishing, 15 January 2010
