Era of cheap energy over

07-11-2006

Era of cheap energy over
The era of cheap energy in the UK is over, the energy minister said last night.

Malcolm Wicks said the UK was unlikely to see a return to low gas prices because of diminishing reserves of North Sea gas, forcing the country to import supplies from the continent and further afield.

"But I would generalise by saying that although I hope prices are going to come down from the high levels they are at now, with all the extra supplies there are now coming in a world that is demanding more and more energy does not suggest to me that we are going to see a return to very low prices," he told Channel Four News.

Mr Wicks said there was a need for Britain to boost its gas storage capabilities for future generations.

"I think we need more storage in the future because the natural store has been the North Sea," he said.

"With that supply in decline we need, as it were, more artificial storage. There is quite a lot of investment coming along with ten projects looking for planning permission. We are now consulting the gas industry about supply and about storage."

Taking another view, Sam Laidlaw, chief executive of Centrica, said as new gas pipelines, connecting Europe to Russian and Norwegian gas, were coming on stream, gas prices would probably stabilise and "hopefully" start to come down.

"As they start to come down of course we will start to pass that on to customers," he added.


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