What the three-day Nord Stream 1 closure could mean for the UK

The pipeline has been closed temporarily but there are fears it may not be reopened. Credit: AP

Russia's Gazprom stopped the flow of natural gas through a major pipeline from Russia to Europe early on Wednesday, a temporary move it announced in advance.

The Russian state-controlled energy giant said earlier this month it would cut the flow of gas through the Nord Stream 1 pipeline until Saturday.

As energy prices soar in the UK - with further increases expected over the coming months - there are fears the impact of the pipeline's closure could be more long-lasting.

Why is it being shut?

According to Gazprom, the only remaining turbine, which is located at the Portovaya compressor station, needs maintenance.

The head of Germany's Federal Network Agency, Klaus Mueller, has said the maintenance work is technically incomprehensible and he considers it a way of punishing Germany for siding with Ukraine since the Russian invasion.

Gazprom has repeatedly reduced the flow of gas through Nord Stream 1, claiming technical issues such as equipment repairs.

The pipeline in Portovaya Bay will undergo maintenance work. Credit: AP

Germany calls these cuts a political move to sow uncertainty and push up prices amid the war in Ukraine.

Russia has also reduced the flow of gas to other European countries that have sided with Ukraine in the war.

Germany is particularly affected as Russia recently has accounted for about a third of the country’s gas supplies.

What’s the impact on the UK?

Some fear the pipeline won’t be reopened. Even without the closure, the UK could see gas prices remain high over the next few years, even if some of the current extreme costs ease off.

As Europe severs ties with Russia, the UK is going to become increasingly reliant on liquified natural gas (LNG), which is transported around the world on ships, said Nathan Piper, an oil and gas analyst at Investec.

This is naturally more expensive than gas piped across continents, and will mean prices stay well above the historical average.

In the ten years before the current gas crisis, prices averaged around 50p per therm, a popular unit of measurement.

Now it stands closer to £6, a 12-fold increase.

“I think we have to accept that we’ll have to endure much higher gas prices than we’ve been to. And the era of cheap energy is over,” Mr Piper said.

Prices were already rising before Russia invaded Ukraine, but since then the situation has worsened.

Asked what else could go wrong, Mr Piper said LNG terminals might break down, and Russia could cut off its remaining gas flows to Europe.

Fewer gas supplies could mean less electricity is generated. Credit: PA

“What we’re relying upon is that all the LNG terminals are able to produce gas,” he said. “A lot of these terminals are running almost at maximum capacity.

“And if you run anything at maximum capacity, there is the issue that it could break down. The other thing is that the Russians could shut off the Nord Stream 1 pipeline completely.”

Gas prices spiked earlier this week after Gazprom announced it would shut the pipe.

“The question mark is will they turn it back on,” Mr Piper said. What happens next remains to be seen.

Could there be blackouts?

“Blackouts will be avoided by what economists call demand destruction, where businesses and people cut their usage because they can’t afford to keep it up,” Mr Piper said.

“Heavy industry across Germany across Europe elsewhere, is effectively shutting down because they can’t secure gas or electricity prices at anything like a competitive level over the next two or three years,” he said.

A part of the pipeline in Germany, which could be particularly impacted. Credit: AP

London Energy Consulting chief executive David Cox, however, warned the UK does face the prospect of power blackouts this winter.

People will “only get through this winter with the aid of government money”, he insisted – accusing politicians at Westminster of “glossing over” the problem of soaring energy bills.

Speaking on The Sunday Show, Mr Cox said: “We’re going to be short of gas in Europe for this winter. That will drive prices potentially even higher.

“Not only that, we might be short of gas to the extent that we have blackouts, we don’t have enough gas to burn to make electricity, and that is a serious problem the government are glossing over at the moment.”

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France's prime minister Elisabeth Borne warned that a worst-case scenario this winter could lead to rolling two-hour power cuts in French homes, amid the broad energy crisis aggravated by the war in Ukraine.

She said the situation is partly due to the consequences of the war in Ukraine and also to the planned shutdown of about half of France's 56 nuclear reactors for maintenance notably to repair corrosion problems.

France relies on nuclear energy for about 67% of its electricity - more than any other country - and on gas for about 7%.

In the UK, the North Sea supplies about 40% of the UK’s gas, according to Mr Cox, leaving the UK to import the remainder of its supply.

However, Mr Cox said shortages in Europe meant the UK would not be able to turn there and could instead have to import supplies from countries further afield, such as the US and Qatar.

The analyst said 40% of UK electricity came from gas-fired generation, adding: “If we don’t get that gas the lights will go out and we will have power cuts.”