With energy bills soaring in the country after the cap on energy prices was raised by Ofgem and inflation spiked, the Government now is faced with potential deductions in the exported amounts of gas from Russia. A senior Government source has stated Western countries could look into reviewing their net zero policy, as one of the ways to become less reliant on Russia.
According to the analyst, this is mainly due to the UK’s exposure to wholesale energy prices.
Mr Armitage said: “As a result of Europe’s over-dependence on Russian gas, any material curtailment of its supply to the continent would result in a significant scramble to buy Liquified Natural Gas (LNG) from the United States and Qatar.
“This would have to be purchased on the wholesale market at a huge cost.
In his article, Mr Armitage outlined a three-step plan that the Government should implement.
However, he noted: “A greater sense of mission is required to meet the scale of the deteriorating situation.
“Every sinew should be strained in Whitehall to issue more of them, which could be made conditional on a proportion of the gas extracted from new fields being earmarked for the UK.”
In addition, Mr Armitage highlighted the additional costs placed on energy bills as “no longer sustainable”.
He said that this includes the environmental, social, and VAT costs, which now amount for 30 percent of an average electricity bill and 7 percent for a gas bill.