The Lex Newsletter: winter ended, the energy supply crisis did not<br>冬天結束，但能源供應危機未止

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{"text":[[{"start":14.81,"text":"Dear reader, "}],[{"start":16.880000000000003,"text":"Twelve months ago, UK officials and energy companies were sweating over the possibility that Britain and Europe could face gas shortages over the winter. "},{"start":24.659,"text":"Fortunately, none of the worst-case scenarios materialised. "},{"start":28.239,"text":"But that shouldn’t breed complacency. "}],[{"start":30.76,"text":"Wholesale gas prices in Europe have fallen more than 90 per cent since hitting record highs of about €340/MWh last summer. "},{"start":38.614000000000004,"text":"The subsequent warm winter meant the continent entered spring with gas storage levels well above the five-year average. "}],[{"start":45.38,"text":"The worst of the energy storm may have passed. "},{"start":48.109,"text":"Yet the UK government mustn’t let itself be distracted from the pressing need to further bolster the country’s domestic supplies. "},{"start":54.42700000000001,"text":"National Grid, which oversees Britain’s energy system, highlights the mountain the country has to climb to wean itself off natural gas, most of which is imported. "},{"start":63.019000000000005,"text":"Fossil fuels as a whole made up 82 per cent of the country’s total energy supply in 2022, it says in a report published this week. "}],[{"start":71.72,"text":"Even before Russia’s full-scale invasion of Ukraine, domestic supplies of natural gas met only about 40 per cent of the UK’s needs. "},{"start":79.449,"text":"More than a third came via pipelines from Europe while the rest was shipped from countries, including the US, Qatar and Russia, as liquefied natural gas. "}],[{"start":88.96,"text":"UK energy company Centrica this week secured an $8bn deal with US group Delfin Midstream to buy 1mn tonnes of LNG a year. "},{"start":97.17699999999999,"text":"The 15-year contract could be sufficient to heat 5 per cent of UK homes for that duration. "},{"start":102.38199999999999,"text":"The majority of British homes are still fitted with gas boilers. "},{"start":105.874,"text":"The agreement is the latest example of Europe and China racing to lock in LNG shipments from the US to replace Russian exports. "}],[{"start":null,"text":"<div class=\"flourish-embed\" data-src=\"visualisation/14284231?hideSignature\"></div>"}],[{"start":113.58999999999999,"text":"However, it is likely that the Delfin agreement won’t commence until 2027. "},{"start":118.457,"text":"That is when the US group is due to complete a new LNG export terminal near Louisiana. "},{"start":123.46199999999999,"text":"Analysts pointed out that the terms of the contract mean Centrica’s energy trading arm could choose to divert shipments to the markets offering the highest prices. "},{"start":131.029,"text":"Last year, the trading and marketing business accounted for £1.4bn out of Centrica’s £3.3bn of total group adjusted operating profit. "}],[{"start":140.92999999999998,"text":"Centrica last year also extended an agreement with Norway’s Equinor to receive an additional 1bn cubic metres (bcm) of gas a year for three winters. "},{"start":150.009,"text":"Equinor already supplied 9 bcm a year to Centrica. "}],[{"start":154.45,"text":"Traders are cautious about the winter ahead. "},{"start":157.07899999999998,"text":"Fatih Birol, executive director of the International Energy Agency, warned this month that energy prices could rise again in Europe if gas demand in China ramps up. "},{"start":166.134,"text":"Much will also depend on whether both Asia and Europe experience particularly cold weather conditions. "}],[{"start":null,"text":"<div class=\"pic\"><picture><source media=\"screen and (max-width: 490px)\" srcset=\"https://thumbor.ftacademy.cn/unsafe/980x0/https://d6c748xw2pzm8.cloudfront.net/prod/45dee8c0-2090-11ee-9fa4-298a61c445f9-mobile.png\"><img src=\"https://thumbor.ftacademy.cn/unsafe/1920x0/https://d6c748xw2pzm8.cloudfront.net/prod/45dee8c0-2090-11ee-9fa4-298a61c445f9-standard.png\"></picture></div>"}],[{"start":172.35999999999999,"text":"Niall Trimble, managing director of The Energy Contract Company, a consultancy, said the following couple of winters could again prove tricky for similar reasons. "},{"start":181.314,"text":"Countries, including the US and Qatar, are racing to build new facilities to increase the global supply of LNG. "},{"start":188.16899999999998,"text":"But these could take several years to come online. "},{"start":190.862,"text":"LNG supply capacity should rise from 520 bcm<phoneme alphabet=\"ipa\" ph=\"\">/</phoneme><break time=\"0.3s\"/>year in 2021 to about 720 bcm<phoneme alphabet=\"ipa\" ph=\"\">/</phoneme><break time=\"0.3s\"/>year in 2027, said Trimble. "}],[{"start":201.7,"text":"Until then, “if there is a coldish winter here [in Europe] and a coldish winter in the far east, prices could soar”, he said. "}],[{"start":209.72,"text":"The UK has set stretching targets to improve its domestic energy security. "},{"start":214.374,"text":"These include raising offshore wind capacity from just over 13GW to 50GW by the end of the decade. "}],[{"start":221.13,"text":"But energy companies are becoming increasingly exasperated about how these targets will be achieved. "},{"start":226.397,"text":"Long waits of up to 15 years for grid connections stymie investment. "},{"start":230.352,"text":"With generous subsidies for clean energy schemes available in the US and EU, there is a danger that some companies could start to prioritise projects elsewhere. "}],[{"start":239.49,"text":"National Grid’s chief executive John Pettigrew lamented this week that the new power lines required to connect projects can also take a decade to pass through the planning system. "}],[{"start":249.07000000000002,"text":"The government has promised reforms to both. "},{"start":251.812,"text":"Mortgages may have replaced gas bills as the latest national obsession but ministers mustn’t let new challenges steer them off course. "}],[{"start":259.54,"text":"<h1>Other things I am enjoying this week </h1>"}],[{"start":262.81,"text":"Former UK prime minister Liz Truss, whose premiership lasted just 49 days after her “mini” Budget debacle last year, is making a comeback. "},{"start":271.114,"text":"She has convened a “growth commission” of 13 international economists in an effort to restore credibility for her “pro-growth” agenda. "},{"start":277.757,"text":"Read more about it in the Financial Times here. "}],[{"start":280.8,"text":"FT colleagues George Parker and Lucy Fisher assess whether Rishi Sunak’s government can avoid defeat in the next UK general election in this insightful Big Read. "}],[{"start":290.16,"text":"Fellow Lex writer Elaine Moore has a new podcast series asking whether the world has reached peak social media and what comes next. "}],[{"start":297.87,"text":"Have a good week, "}],[{"start":299.99,"text":"Nathalie Thomas "}],[{"start":301.78000000000003,"text":"Lex writer "}],[{"start":null,"text":"<div class=\"n-content-layout card-container \" data-layout-name=\"card\" data-layout-width=\"fullWidth\"><div class=\"n-content-layout__container\"><h3></h3><div class=\"n-content-layout__slot\" data-slot-width=\"true\"><p><em>If you would like to receive regular Lex updates, do add us to your </em><a href=\"https://www.ft.com/lex\"><em>FT Digest</em></a><em>, and you will get an instant email alert every time we publish. You can also see every Lex column via the webpage</em></p></div></div></div>"}],[{"start":302.82000000000005,"text":""}]],"url":"https://creatives.ftacademy.cn/album/d18e7dad-2aa1-4b7a-830a-21936d140157-1689216618.mp3"}

The Lex Newsletter: winter ended, the energy supply crisis did not
冬天結束，但能源供應危機未止

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The Lex Newsletter: winter ended, the energy supply crisis did not冬天結束，但能源供應危機未止

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The Lex Newsletter: winter ended, the energy supply crisis did not
冬天結束，但能源供應危機未止

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