AN ESCALATION of the Ukraine situation could push up UK energy prices, the chief executive of regulator Ofgem warned yesterday.
Around one third of Europe’s gas comes from Russia, the majority through Ukraine, which has provoked fears of a supply shortage if Moscow cuts off supply amid escalating tensions with the West.
While the UK gets less than one per cent of its gas from Russia, Dermot Nolan told a committee of MPs that if Russia cut off supplies to Europe, “it would affect us significantly”. He said countries such as Germany would start competing with the UK to buy gas from Norway, raising wholesale prices. Nolan said Ofgem is “working intensively” on risk-modelling in the case of a supply shortage, alongside the Department for Energy and Climate Change.
Gas is set to play a larger part in the UK’s energy mix over the next five years, as coal-fired power stations and nuclear plants close.