Crop growers urged to forward-purchase gas

Growers of protected crops are being urged to forward-purchase their gas to manage skyrocketing energy prices that otherwise could force them into bankruptcy, according to an energy adviser.

Rising prices and demand, and the decommissioning of nuclear power stations could have a devastating effect on prices and supply, said Commercial Utility Brokers.

Founder Royden Fairfax said 40 per cent of electricity was produced from gas, but this would rise to 60 per cent in two years. Demand for energy, meanwhile, could outstrip supply, resulting in a loss to our economy of £108bn, said his firm's report, The UK Gas Market.

With all but one of the UK's nuclear power stations slated for closure within the next 16 years, ever-increasing gas imports would have to take up the slack, he said.

"We are extremely concerned with prices and how unprepared people are. I would imagine companies could go bust because of rising prices and the need to meet demanding carbon targets."

Fairfax said firms would have to pay tens of thousands of pounds to reduce footprints and to audit every stage of the supply chain, down to how plastic pots are made.

"They need to forward-purchase their gas and sign up to a flexible contract, where you can buy gas by the month, quarter or half-year."

Fargro managing director Paul Sopp said: "Prices are a major part of a grower's budget, especially for ornamentals including cut flowers, as well as growers of edibles and salad crops."

Closure of nuclear power stations in the next decade would increase dependency on gas, which would drive up prices, he said. Alternatives like biofuels or energy made from waste were only viable for large-scale firms.

Swedeponic UK managing director Patrick Bastow said his firm had forward-purchased 10 per cent of its gas until 2012. "The Government will have to rely on gas-powered electricity stations, which will probably push up prices," he said.

"England is heavily dependent on imported gas, and it will become more expensive. The Government will have to rely on gas-powered electricity stations, which will probably push up prices."

Swedeponik was looking at heat pumps and biomass. But anaerobic digestion was out because his firm did not have the waste steams needed to fuel the system.


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