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The UK will rely on imports for 70 per cent of its gas needs by 2020, Centrica’s chief executive Sam Laidlaw said today.
Speaking at an international energy conference in Houston, Texas, he argued that investment in UK energy generation had “almost ground to a halt” because of political uncertainty and argued that shale gas had the potential to make a “significant contribution” to the UK’s future energy mix.
Laidlaw claimed that increasing political intervention in the energy market such as Labour’s planned price freeze, a potential inquiry into competition and talk of breaking up “an already fragmented industry” was hindering investment.
In a warning to politicians, Laidlaw said security of supply risks becoming the “forgotten priority” of European energy policy.
In the UK an estimated 3.7 Gigawatts of coal-fired generating capacity will be shut down by the end of 2015 as a result of European directives to curb emissions. He argued that the risk of power cuts were increasing with the country’s reserve capacity forecast to shrink to 4 per cent and no new capacity being built.
Laidlaw said: “In primary energy, the UK’s production of gas is falling rapidly. North Sea oil and gas output has fallen by 38 per cent over the last three years. By 2020 we will be reliant on imports to meet 70 per cent of the country’s gas needs. So when it comes to security of supply, there is a pressing need for solutions.”
According to the energy boss, whose company is spending £160m on shale gas in Britain, the country must look to diversify sources. Last year Centrica signed a 20-year deal with Cheniere to export Liquefied Natural Gas from Louisiana with the first cargo due to be shipped in September 2018. It has also taken a stake in the Bowland shale licence in Lancashire.
“In primary energy, the UK’s production of gas is falling rapidly. North Sea oil and gas output has fallen by 38 per cent over the last three years. By 2020 we will be reliant on imports to meet 70 per cent of the country’s gas needs. So when it comes to security of supply, there is a pressing need for solutions,” added Laidlaw.
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