(Bloomberg) -- The U.K. is considering all options to address the energy crisis, but people should prepare for longer-term high prices, Business Secretary Kwasi Kwarteng told a committee of Parliament.
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In the European Union on Wednesday, the spike in power and natural gas prices hijacked talks about the bloc's transition away from fossil fuels, according to a person familiar with the matter.
Europe is facing a gas shortage after a long and bitter winter left storage sites depleted. Refilling them this summer hasn't been easy, with top supplier Russia curbing flows to the continent. Liquefied natural gas is also heading to Asia.
Two of OPEC's key members said the impact of the gas crisis is likely seep into the oil market.
Several U.K. power firms have stopped taking in new clients as small energy suppliers struggle to meet their previous commitments to sell supplies at lower prices.
European gas prices have more than tripled this year, reaching a record last week.
U.K. Suppliers Won't Dwindle to 10, Says Kwarteng (12:11pm U.K.)
Kwarteng doesn't expect the current crisis among retail energy suppliers to cause the market to contract to 10 suppliers, a number he said had been speculated about in the media.
"A wholesale collapse or exiting the market of that nature would severely reduce competition and that's not what I'm anticipating," Kwarteng said. "I'd be very surprised if we got to that figure."
He said it likely won't be necessary to go beyond existing measures to reallocate customers from failed suppliers, but that contingency plans are being prepared.
Supply Diversity to Shield U.K. From Russian Shocks: Kwarteng (12:01pm U.K.)
U.K.'s energy strategy will protect it from Russia's ability to control the supply of gas, Kwarteng said.
"The way to be resilient generally, regardless of what Russia does is to have diversity of supply," he added. That "will protect us against any shocks to the system which may deliberately be orchestrated by Mr. Putin's regime."
U.K. Weighing All Options to Fix Crisis: Kwarteng (11:43am U.K.)
Kwarteng said the country is looking at all options to address a crisis that has pushed energy suppliers to the brink of collapse amid a surge in gas prices. While those prices would normally decline, Kwarteng said people need to prepared that this time could be different.
"We have to prepare for longer term higher prices," he said in remarks to the House of Commons Business, Energy and Industrial Strategy Committee.
Gas Crisis to Push Oil Demand, Prices Higher (11:14am)
The impact of the gas crisis is likely to seep into the oil market, driving demand and prices higher, two of OPEC's key members said. Crude could rise by $10 a barrel over the next three-to-six months as consumers are forced to shift from gas to other fuels, Mele Kyari, managing director of Nigerian National Petroleum Corp., said in an interview with Bloomberg Television.
Iraq warned on higher oil demand, and stands ready to pump more crude if the increase in consumption warrants it. "There is some new concern," Oil Minister Ihsan Abdul Jabbar said in Dubai, where he's attending Gastech, a conference for the gas and hydrogen industries. "If there is agreement within OPEC, we will be ready."
Power Crisis Hijacks EU Green Deal Talks (10:59am U.K.)
The spike in power and natural gas prices hijacked a debate about the European Green Deal at a meeting of energy ministers in Slovenia on Wednesday, according to a person with knowledge of the talks.
Ministers raised the issues of price volatility and the impact of soaring energy costs on public support for the clean shift. Some were concerned about the social consequences of the EU proposal to extend the region's carbon market to fossil fuels used in transport and buildings, said the person, who declined to be identified because the meeting is private.
Ofgem Expects 'Lessons Learned' After Crisis (10:51am U.K.)
"We are going to have a lessons learned after this," Jonathan Brearley, chief executive officer at U.K. energy regulator Ofgem, told a parliamentary committee. He added that the situation changed very quickly in August and that all companies are currently feeling the strain of higher prices..
U.K. Crisis Exposes Retail Vulnerability: Energy UK (10:48am London)
The power crisis in the U.K. has exposed the vulnerability of the country's retail power sector, said Emma Pinchbeck, chief executive of Energy UK, the trade association for the energy industry.
"There are features in our market design that make it very difficult for our retailers to adapt to the current situation," she said at a Parliament hearing. "The real worry is the sector is so fragile as a whole. Players that might be expected to pick up customers are worried about doing so because of the cost of doing it."
"We think good, well-run companies will fail," she added. "That is function of both the price shock and market design."
U.K. Energy Supplier Green Weighs Options (9:41am London)
U.K. power and gas retailer Green may decide to shut its business within days, the company's CEO Peter McGirr said by phone. The supplier is working with Alvarez & Marsal to explore options for the future, but unless the government takes action such as lifting a cap on prices, the company will likely close, he said.
Kwarteng has already said the government won't bail out small suppliers and that the U.K. will keep the price cap in place.
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