Current energy situation

The last 2 weeks has seen some unprecedented rises in gas prices.  To put it into perspective, the wholesale price of gas was around £100 per therm at the end of August.  Little more that 2 weeks later is sits at £162 per therm.  The wholesale price of gas has now increased more than 400% in 1 year.

What are the reasons for this ??

1. Russia has reduced the general supply of gas for a number of months
2. European stockpiles are unusually low for this time of year
3. A number of gas producing platforms in the North Sea have been shut down for routine maintenance, deferred from last year because of the pandemic.
4. Windspeed has been lower than usual in September, meaning that UK wind turbines are having to be driven by back up gas fired power stations to produce electricity, significantly increasing the UK gas usage.
5. And, finally, last week one of two electricity cables bringing power from France to the UK caught fire, which is expected to be out of action until the spring.

The bottom line, there is currently a large demand on gas and a limited supply, which is causing concern to the UK economy.   There is a knock on effect to electricity prices, but to a much lesser extent, but they have also shown significant increases in the last 2-3 weeks.