The looming energy crisis has been blamed on a handful of factors from Russian supply chains to Brexit – so economics specialist Ed Conway created a digestible Twitter thread to explain it on Tuesday.
Acknowledging the growing furore around rising gas prices and depleted food supplies, Conway – Sky News’ economics and data editor – warned the public should be “wary of seductive catch-all explanations”.
So which factors are really responsible for the collapse of suppliers such as Green?
1. It’s not all to do with Russia
Conway acknowledged some have been blaming Russia for slowing the gas flows it sends across to Europe in pipes, following controversy around a nearly completed pipeline called Nord Stream 2 across the Baltic Sea.
However, he noted that Russian flows have actually increased compared to the start of the year, even if they remain lower than the pre-pandemic levels, meaning low Russian supplies are not the sole reason for the current crisis.
This supply from Russia also accounts for less than 5% of UK gas.
2. What’s happened to our natural gas suppliers?
Domestic gas fields have slowed down their lines of production, and LNG – liquified natural gas – tank deliveries have reduced.
Imported gas supplies from areas like Qatar have lessened because there’s been increased demand all around the world.
The UK also has less gas storage than its European neighbours which means that if it is hit with a shortage, it’s ‘just-in-time’ model struggles to meet the demand.
Conway tweeted: “We’re not getting as much LNG tanker deliveries as usual and domestic gas fields aren’t producing as much as usual.
“These seem like bigger deals than Russian supply.”
3. Brexit is not really involved
Conway continued: “Another claim doing the rounds on Twitter is that the UK is uniquely affected by this crisis and that it’s all down to Brexit.”
After Brexit, the UK left the EU’s internal energy market.
But, as Conway added: “For a period last week UK prices were indeed WAY higher than most of Europe. But that wasn’t due to Brexit. It was because of the interconnector fire.”
He is referring to a major fire which started at a power unit in Kent. The blaze meant electricity coming from France was cut off – and National Grid does not expect the unit to recover, even partially, until October.
When pressed by another Twitter account, Conway tweeted: “Brexit certainly could impact energy in the coming years. But trying to pin the recent spike in prices on it seems baffling. Through what mechanism is Brexit responsible?”
4. UK energy prices are higher than EU countries at the moment
Conway tweeted: ″UK energy prices are stubbornly higher than in most EU countries. Gas and power prices are up everywhere but the level in the UK seems highest.”
Jonathan Brearley, CEO of energy regulator Ofgem, told The Sun: “If you look at gas prices – it is something we don’t think we have seen before at this pace.”
He added that millions of people in the UK are expected to be affected as energy suppliers could collapse in the upcoming weeks.
Conway also explained that as the UK has stopped relying so much on coal in recent years, imports usually take on the slack for power generation.
Wind power plays an important role in meeting energy demands too, but this source has dropped off in recent months due to the weather meaning wind turbines haven’t been as powerful.
While other European countries could suffer from these problems as well, the UK does not have the same backup energy supplies as its neighbours.
France gets much of its energy from its own nuclear power stations, while Norway and Sweden produce lots of hydroelectric power, and Portugal harnesses energy from water or the wind.
Both Germany and Poland still rely on burning coal, despite the environmental consequences.
5. The UK’s energy policy remains unclear
As Conway tweeted: “Hoping for a change in the weather doesn’t constitute an energy police. And still somewhat unclear what UK policy is...”
Yet, Downing Street has been fighting off the alarm about the energy supplies.
Prime minister Boris Johnson told Sky News: “The market is going to start fixing it, but in the meantime the government will do everything we can to help people, to help fix it, to make sure that we smooth things over.”
Energy secretary Kwasi Kwarteng has also claimed: “There is no question of the lights going out, of people being unable to heat their homes.
“There will be no three-day working week or a throwback to the 1970s.”
The government claims it has a “diverse and secure” range of suppliers as well.