The Ukraine is on the brink war as Vladimir Putin has threatened to invade within days and the Russian leader has made threats to cut off the gas supply to Europe.
British Ministers are now in emergency mode and are moving quickly to bolster up energy supplies to avoid “blackouts” in the UK.
A third of Europe’s gas supplies comes from Russia and the Ukraine is the key transit route for the gas to reach the EU from Russia.
Analysts have warned that Russia goes to war with Ukraine then this could further cut gas supplies into Europe, which could also spark start “rolling blackouts.”
Moscow has also threatened that they will cut off Europe’s gas if the US and Britain bans Russia from the SWIFT which is a global payments system.
With Europe on the brink of a war the British government have moved to get more electricity supplies ready for the next winter.
City analysts have warned that gas prices in the UK could cost as much as £10 per therm, as Russia is sending global energy prices soaring.
Gas supplies also have a knock on effect to the cost of electricity as this is used to generate more than a third of power in Britain, and the UK does also import some gas from the Netherlands and Belgium.
The British government has set a new target to procure 5.4 gigawatts of capacity for 2022 and 2023, which goes beyond the recommended 4.7 gigawatts by the National Grid ESO.
Business Secretary, Kwasi Kwarteng, told Fintan Slye, director of National Grid ESO, “While I agree with the analysis you provided in fulfilment of your remit under the Capacity Market Regulations, this target reflects the broader uncertainties within the power sector.”
Analysts have warned that there could be energy rationing and there will be “rolling blackouts.”
Analysts Chris Wheaton and David Round warned, “It’s not pretty. Energy rationing would be inevitable in this scenario, which would be disastrous for the European economy.
“Could we see quadruple-digit UK gas prices – over 1000p/therm in this event? Yes, we could, in our view.
“Demand for power would need to be reduced. This would require industry shut-ins, power rationing through rolling blackouts, to both reduce average demand and also shift and flatten power demand peaks.”
A government spokesman said: “Energy security is an absolute priority for the Government, and we take no chances with security of supply.
“The Capacity Market acts as an effective insurance mechanism, providing secure and affordable electricity that families and businesses can rely on.
“In setting the auction targets we consider a range of factors including the possibility that some sources of generation may not be available at the time of the delivery year. Through the Capacity Market, we have secured the electricity Britain needs to cope with peaks in demand out to 2024/25.”