Tony Cooper, NIA Chairman

In terms of specific cause and effect there is no clear trend but there might perhaps be some common themes. The impact of rising demand on infrastructure which has had inadequate investment and which is everywhere swamping the switch to more sustainable energy sources, or a reliance on cross border supply. These have not been UK issues so far. They are about to become so.

Consider the following generalised question. What is the price premium required to maintain reasonable supply security if the supplier is subject to pressure simultaneously in their domestic and export markets? Consider the same question put more specifically.

What is the premium which will be necessary to ensure secure gas supplies for a market at the end of a long set of pipelines, over and above the inevitable extra system operating costs? Or the apparently different but essentially similar question of what premium a market must pay to maintain security if it is over reliant on scattered, intrinsically unpredictable intermittent sources?

Both these scenarios will shortly apply to the UK and in both cases there is a reliance on the view that, on the whole, geographically distinct sources of demand and supply will not be under simultaneous pressure. But on the whole is not always. We do get periods of UK wide still weather. We have just experienced a Europe wide heat wave, which seriously stretched the electricity exporter of last resort, Edf.

We need also to remember that a commercially acceptable risk may not be socially or politically acceptable. The public never swallowed Yorkshire Water's 100 year drought excuse and Government couldn't avoid some of the blame. There are grave risks therefore in putting particular pressure on the most secure and sustainable energy source we have.