UK exposure to international energy risks will grow

Significance

The United Kingdom’s high dependence on natural gas for heating and electricity generation has amplified the impact of high gas prices in Europe. The crisis has been compounded by the accelerated closure of coal-fired power plants, declining domestic gas output and a lack of gas storage.

Impacts

• Policy support for renewable energy will be maintained.
• Reduced consumer spending power represents a key risk to the economic recovery 2022.
• The government’s attention may turn to the neglected area of gas storage capacity.
• The cost of living crisis makes it likely that London would risk a trade war with the EU.