We must not keep paying the price of failure: As North Sea oil and gas reserves dwindle, chairman of the foreign affairs select committee TOM TUGENDHAT argues Britain needs to focus on building up its nuclear reactors to solve the fuel crisis
We're less than 100 days from April, when a left-right combination of energy hikes and tax rises will clobber homes across our country.
In April the price cap – which has kept energy costs down for householders – is up for review. The average price is expected to jump by another £500.
On top of that, the collapse of smaller energy firms has left a £1.8 billion bill that must be paid by someone… and guess who it will be?
The price of European gas has also risen by 350 per cent in a year, putting it around ten times the cost in the US, where fracking has helped keep prices more or less stable.
These huge increases affect everything we buy, as energy prices drive the costs of manufacturing and transport.
In April the price cap – which has kept energy costs down for householders – is up for review. The average price is expected to jump by another £500 (stock image)
While Ikea has hiked prices by ten per cent, bakers Greggs is charging five per cent more – a sign of the pressure on low-cost retailers. Others are likely to follow.
The fix isn't easy. Too much has slipped beyond our control. And, like saving for a pension, the best time to start fixing this was yesterday.
For years, British gas users had low prices and supplies flowed so freely that we decommissioned our main gas storage facility in 2017. Why stockpile against stable prices and open markets?
Small energy companies tried to make the most of the easy market. But when the tide went out, they found they were swimming naked.
Their businesses only worked when gas was cheap. Firms in Europe are in the same boat. North Sea oil and gas reserves have been dwindling for years, but instead of looking for domestic fixes, we've imported fuel, and problems. Now we're way behind what we need.
The price of European gas has also risen by 350 per cent in a year, putting it around ten times the cost in the US, where fracking has helped keep prices more or less stable (stock image)
All this means we're tied into a European poker game without a hand – and we need a way out. We should have started looking for the door a decade ago.
First, we need more nuclear. We've been talking about replacing our reactors for years, and now this Government is finally doing it.
Rejecting Chinese involvement is essential because we can't trust their technology.
Crucially, small reactors need rolling out widely and quickly to generate closer to users. Britain is pretty good at them, and we know they're safe because we've been using similar systems to power our nuclear submarines.
We need to go further. Investing in hydrogen puts us at the cutting edge of a renewable technology whose only waste is water.
Aberdeen already has a basic hydrogen grid, but converting the rest of the country will take time. Until the small nuclear reactors and hydrogen systems are in place, we must work with others.
Britain is pretty good at them, and we know they're safe because we've been using similar systems to power our nuclear submarines. Pictured: File image of a nuclear powered submarine
To bring prices down today, we need America. It is good news that some of their natural gas exports are being diverted from Asia to Europe, but we need more to head our way.
We also need France. Its excess nuclear power can light up the south through the cables running under the Channel.
We need to think about transport, too. Transforming cars will have a dramatic impact on our dependency on others.
As we move to electric vehicles – they now account for one in seven sold in Britain – we'll look away from Arab oil nations towards the East.
China produces 80 per cent of the world's batteries, as well as wind turbines and solar panels. From Argentina to Zimbabwe, lithium mines are being snapped up by huge Chinese companies. Today, Beijing controls about 75 per cent of the world's lithium processing.
In the 1970s, inflation rocketed when the Arab states imposed oil-sale boycotts in protest at American support for Israel. How soon before the Chinese Communist Party pulls a similar trick in response to support for Taiwan or defence of human rights?
Above all, we must work with allies, regulate providers and invest in our energy future to avoid being dependent on unreliable others.
Soaring gas and electricity bills are a painful reminder that the cost of failure is far too high.
As we move to electric vehicles – they now account for one in seven sold in Britain – we'll look away from Arab oil nations towards the East (file image)
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