It may be more difficult to keep the lights on across Europe during winter than governments admit.

Every week, people involved in electricity trading in the UK have the opportunity to interview the managers of the national grid.

You can watch the conference call from anywhere and get an idea of what those on the front lines of the power market are concerned about. It is becoming more frightening to listen to them week after week. This suggests that keeping the lights on this winter will prove much more difficult than European governments admit.

The rising prices are enough to be alarming. British households were informed Friday that their gas and power bills would rise by 80% starting Oct. 1. The energy price cap was increased to £3,549 ($4,189/year) from £1,971 in the last six months and £1,277 last winter.

The problem is not limited to rising costs, as the industry’s teleconference shows. Participants are increasingly using the terms “emergency” or “shortages,” with participants focusing more on when than if a crisis will occur. Imagine listening to conversations between Wall Street executives, Federal Reserve officials and other Wall Street employees during the 2008 global financial crisis.

Here’s an example question from last week’s session. “Are there any wargaming options for if/when cross-border trading collapses under security supply pressures this winter?” Another participant asked: “Can you have a session to talk through the emergency arrangements?” The grid’s predictions were blunt: “I don’t believe what you’ve written. And nobody else does.”

One intervention was especially insightful. One participant asked, “Based on the trading patterns of winter ’22 products, how does this position you with respect to securing winter power?” What is the background? The background? UK power prices for December 2022 are fast approaching £1,000 per megawatt-hour in the forward market. This is up 50% from current prices. What does this mean? Power shortages.

This tone is in contrast to the British government’s insistence that there’s nothing for people to worry about. Downing Street stated earlier this week that households, businesses and industries can rest assured they will receive the electricity and gas they require over the winter. We have one of the most reliable and varied energy systems in the country.

Officially known as the ” ESO Operational Transparency forum”, the weekly call allows market participants to question the managers of the Electricity National Control Centre. This hub moves power around the UK, from generators to traders and consumers to traders. The forum focuses on obscure issues in power trading. In recent weeks, the focus has shifted toward crisis management. A second example is from earlier in the month: “If a system stress event is active both in gas and power, how does the electricity system operator communicate with the gas control center? It is difficult to know which stress event has priority.

One of the key concerns is what would happen if European countries introduced beggar-thy-neighbour policies that shut down cross-border electricity flows. Norway has said that it is considering this. One market participant stated last week that the market must understand how interconnectors should be used during periods of high prices and possible generation shortfall.

Another topic is how much consumption could drop if consumers and businesses cannot afford high electricity and gas prices. One recent example was “What level of demand reduction or demand destruction are you anticipating for the winter ahead? This is a price response.” Another person repeated the question: “What level of demand reduction if any?” The grid managers could not supply any numbers to the callers.

The call should be focused on possible problems ahead. It exists to solve and anticipate problems. But having listened to the call on several occasions over the past few months, I can offer three conclusions. The looming power crisis is much worse than industry executives admit and far more dangerous than the government admits. High prices are a problem but supply security is also at risk. The third is that there is not enough time to prepare for the drop in temperatures.

In rare instances of the transparency that’s so needed, the Finnish grid manager told citizens earlier this week they should prepare for winter shortages. The European governments are required to tell their citizens about the severity of the crisis. This winter, it will be difficult to keep the power on if you minimize the severity of the problem, or worse, pretend there isn’t a problem.

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