Gas supplies to keep the UK’s lights on and homes heated face a ‘significant risk’ of running short this winter, the nation’s energy regulator has warned an energy retailer.
Ofgem highlighted its fears in a letter to SSE, a copy of which was leaked to The Times newspaper.
In the letter, the regulator said a “gas supply emergency” might arise in consequence of Russia’s war with Ukraine.
Grendon Thompson, Ofgem’s head of wholesale market management, reportedly said a gas supply emergency could impose load shedding on the largest consumers, forcing gas-fired power stations to close.
Thompson was writing, according to reports, in response to SSE’s request to alter regulations and ease the threat of heavy fines being incurred for non-delivery of electricity, should a gas drought force CCGT plants to interrupt their spinning.
An SSE spokesperson told media outlets that its request for rule modification “proposes to limit potentially very high charges to generators caused by events outside their control”.
Such an easing would, in SSE’s view, “protect security of supply by ensuring gas-fired power stations are able to provide vital flexible generation through challenging periods.”
Ofgem’s response offers “progression on an urgent basis” of the power company’s request. Other suppliers are believed to be echoing similar fears to the regulator.
National Grid has been advising D-BEIS on stress tests it has been carrying out to anticipate possible energy shortages in coming months.
Its “central case” suggests there will be adequate supplies, although privately NG officials admits the continuing crisis is putting “extreme” pressure on the energy system.
National Grid is due to release its winter outlook reports on Thursday, giving greater detail on its evaluation of whether supplies will remain available to avoid power cuts.
After Thompson‘s letter was made public, Ofgem sought to reassure observers.
A spokesperson said “Britain is in a good position with little direct import of gas from Russia; our own domestic gas production; reliable supplies from Norway; and the second-largest port capacity in Europe to import liquified gas.
“Nevertheless, we need to be prepared for all scenarios this winter.
“As a result, Ofgem is putting in place sensible contingency measures with National Grid ESO and GSO as well as the government to ensure that the UK energy system is fully prepared for this winter.”
- Over recent months Israel has offered to bolster British and European demand for gas. Up to 15 billion cubic metres each year could be exported to Europe, on contracts lasting until 2040 or mid-century, an outline marketing study seen by The Energyst proposes.
- Consultants Gina Cohen and Michael Barron base their business case on the discovery of 1 trillion cubic metres of new reserves under the Negev desert in the south of the country. Another 2 trillion under Israeli coastal waters may be available after investment, the analysts say.
- Their document from April of this year suggests Israel might market gas exports from Cyprus, whose contingent reserves are estimated at between 200 and 400 billion cubic metres.