Kwasi Kwarteng: “We may expect to see more energy companies exiting the market”

The Business and Energy Secretary addressed the Commons on the global gas price situation

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Kwasi Kwarteng made a statement yesterday to the House of Commons on the issue of global gas price rises and how they affect the UK’s energy market.

The Business and Energy Secretary said that the government does not expect supply emergencies this winter: “This is not a question of security of supply. The UK also benefits from an excellent relationship with Norway, one of our most important and reliable energy partners and that delivers nearly 30% of our total gas supply.”

He welcomed the statement from Norway that its gas production will significantly increase from 1st October to support the UK and European demand.

He added: “We have already seen four energy suppliers exit the market in the recent weeks and may well expect to see further companies exiting the market over the coming weeks.”

However, he said that is not something that should be cause for alarm or panic.

“I want to make it clear today that is not unusual for smaller energy suppliers to exit the market, particularly, I may add, when wholesale global prices are rising. We have clear processes in place to make sure that all customers are supplied with energy.

“The government will not be bailing out failed companies, there will be no rewards for failure or mismanagement. The taxpayer should not be expected to prop-up companies who have poor business models and are not resilient to fluctuations in price.

“We must ensure that the energy market does not pay the price for the poor practices of the minority of companies and that the market still maintains the competition which is a feature of today’s current system.”

The Business and Energy Secretary also said “the price cap is staying, not going anywhere.

“Our security of gas supply is robust. But it is the case that the UK is still too reliant on fossil fuels. Our exposure to volatile global gas prices underscores the importance of our plan to build a strong, home-grown renewable energy sector to strengthen our energy security into the future.

“Thanks to the steps that we have made as a government, renewable energy has quadrupled in terms of gigawatts capacity since 2010, far more than quadrupled in fact – but there is clearly a lot more we can do in this area.

“That is why we committed to approve at least one large-scale new nuclear project in the next few years, and are backing the next generation of advanced nuclear technology with £385 million, helping to attract billions of pounds in private capital and create tens of thousands of jobs.”

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