UK could spend £6.3m a day on Russian gas this year, think tank warns

The UK is at risk of spending billions of pounds on Russian gas imports this year, potentially funding its war in Ukraine, an energy think tank has warned.

The UK uses relatively little Russian gas, but it still accounts for about 6-7% of total imports, and about 4% of UK gas demand, having risen from almost none in 2017, according to analysis of government data by the Energy and Climate Intelligence Unit (ECIU).

Much of Britain’s gas comes from the North Sea and Norway.

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But if the UK continues to import Russian gas at that level, it could spend £2.3billion on Russian gas this year, equivalent to £6.3million per day, based on today’s wholesale gas price of about £68/MWh, ECIU said.

“Although not at the same level of some other European countries, the UK has been spending billions of pounds on Russian gas that could now be being used to fund Putin’s war in Ukraine,” said Dr Simon Cran-McGreehin, ECIU’s head of analysis.

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He called this another reason for the UK to “break its dependency on gas,” along with tackling the UK’s climate and energy efficiency goals.

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Fossil fuel firms ditch deals with Russian counterparts

Fossil fuel sales make up around two-fifths of Russia’s government revenue.

Since Russia invaded Ukraine, British oil major BP shed its 19.75% stake in Russian oil giant Rosneft, following pressure to stop money flowing into Moscow’s coffers.

Centrica, owner of Britain’s largest energy supplier British Gas, is in talks to ditch its gas supply deals with Russian counterparts, principally Gazprom.

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Energy efficiency is key

Wholesale gas price rises are driving the majority of recent energy bill hikes, with gas directly adding at least £500 to the average bill under April’s new price cap, and a further £68 due to supplier collapses.

“Deploying electric heat pumps and shifting from gas power stations to renewables is the way” to reduce British dependency on gas, Dr Simon Cran-McGreehin said.

The ECIU says that upgrading home insulation and heating efficiency, enough to bump up the average energy performance rating from band D to C, would help each household use on average 20% less gas.

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Overall UK gas demand would fall by 8%, and imports could be reduced by 15%, according to ECIU’s analysis.

A cross-party group of MPs recently found the government plans to decarbonise heating in homes “lacks clear direction” and are insufficient to “help meet the UK’s 2050 net zero target”.

The Business, Energy and Industrial Strategy (BEIS) Committee called on the government to support low carbon heating technologies, boost heat pump market, and help re-train gas boiler engineers.

Sky News has contacted the Business, Energy and Industrial Strategy department with a request to comment.

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