Consumers in Britain are bracing for a surge in energy costs amid a global gas squeeze. AP
Consumers in Britain are bracing for a surge in energy costs amid a global gas squeeze. AP
Consumers in Britain are bracing for a surge in energy costs amid a global gas squeeze. AP
Consumers in Britain are bracing for a surge in energy costs amid a global gas squeeze. AP

Minister says UK 'can't nullify' energy crunch amid calls for fracking and wind expansion


Tim Stickings
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Fracking and onshore wind have been touted as potential solutions to an energy crisis in Britain that has put ministers under pressure over soaring consumer fuel prices.

The government says a rewritten energy strategy will be published shortly after Russia’s invasion of Ukraine added to the woes of Europe’s fuel consumers.

Cabinet minister Brandon Lewis said on Saturday that the government “can’t completely nullify” the effects of the global energy crunch as the UK faces calls to ease costs with a windfall tax on energy providers.

Such a tax “won’t necessarily have the impact on global prices that people think it will” and would deprive energy companies of money needed to produce more power, argued Mr Lewis on Sky News.

Protests were due on Saturday over what the opposition describes as a cost-of-living crisis, after energy regulator Ofgem announced a 54 per cent rise in its price cap during what it called a once-in-a-generation gas squeeze.

As ministers look to increase domestic energy supply, the Daily Telegraph reported Prime Minister Boris Johnson would be presented with plans to double the UK’s onshore wind capacity by 2030 and treble it by 2035.

Mr Johnson could sign off the proposals as soon as next week, it said. But some of his own Conservative MPs are sceptical of wind power and of loosening planning laws to build new turbines.

An expansion of onshore wind power is being proposed as a move to ease the energy crunch in Britain. Getty
An expansion of onshore wind power is being proposed as a move to ease the energy crunch in Britain. Getty

The prime minister, who once said turbines in Britain “couldn’t pull the skin off a rice pudding”, has warmed to wind power in recent years but has previously put more emphasis on offshore wind parks.

Another politically contentious option would be a revival of shale gas fracking, a practice that was halted in 2019 because of concerns that the drilling could cause earthquakes.

Business Secretary Kwasi Kwarteng has said that fracking would not lower costs because the problem in Britain is high global energy prices rather than a shortage of gas.

“Producers won’t sell shale gas to UK consumers below the market price. They’re not charities,” he said.

But some MPs are urging him to reconsider, and the head of British Gas owner Centrica, Chris O’Shea, said the idea was worth looking into.

“The key question is, do we want to source our gas from overseas? Or do we want to have more gas domestically? And shale is certainly worth exploring,” he told BBC radio.

However, “we do have to be careful, if it does cause earthquakes, it's not something we should do,” he said.

Mr Johnson has promised that Britain will stop importing Russian oil by the end of the year and look at reducing what is already a small quantity of gas purchases from Moscow.

Russian imports account for 18 per cent of Britain’s diesel but none of its petrol and heating oil, ministers say.

How the UAE gratuity payment is calculated now

Employees leaving an organisation are entitled to an end-of-service gratuity after completing at least one year of service.

The tenure is calculated on the number of days worked and does not include lengthy leave periods, such as a sabbatical. If you have worked for a company between one and five years, you are paid 21 days of pay based on your final basic salary. After five years, however, you are entitled to 30 days of pay. The total lump sum you receive is based on the duration of your employment.

1. For those who have worked between one and five years, on a basic salary of Dh10,000 (calculation based on 30 days):

a. Dh10,000 ÷ 30 = Dh333.33. Your daily wage is Dh333.33

b. Dh333.33 x 21 = Dh7,000. So 21 days salary equates to Dh7,000 in gratuity entitlement for each year of service. Multiply this figure for every year of service up to five years.

2. For those who have worked more than five years

c. 333.33 x 30 = Dh10,000. So 30 days’ salary is Dh10,000 in gratuity entitlement for each year of service.

Note: The maximum figure cannot exceed two years total salary figure.

How Tesla’s price correction has hit fund managers

Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.

It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.

The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.

Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.

Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.

He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.

AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”

A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.

Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.

Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.

Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.

By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.

Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.

In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”

Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.

She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.

Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.

Ordinary Virtues: Moral Order in a Divided World by Michael Ignatieff
Harvard University Press

Points tally

1. Australia 52; 2. New Zealand 44; 3. South Africa 36; 4. Sri Lanka 35; 5. UAE 27; 6. India 27; 7. England 26; 8. Singapore 8; 9. Malaysia 3

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UAE currency: the story behind the money in your pockets
Indoor Cricket World Cup Dubai 2017

Venue Insportz, Dubai; Admission Free

Fixtures - Open Men 2pm: India v New Zealand, Malaysia v UAE, Singapore v South Africa, Sri Lanka v England; 8pm: Australia v Singapore, India v Sri Lanka, England v Malaysia, New Zealand v South Africa

Fixtures - Open Women Noon: New Zealand v England, UAE v Australia; 6pm: England v South Africa, New Zealand v Australia

Updated: April 02, 2022, 10:37 AM