UK regulator Ofgem approves deal to preserve winter gas imports

Great Britain’s energy regulator, Ofgem, has approved an agreement to reverse a planned capacity cut at a major Belgian gas pipeline, preserving an import route for winter. The deal between National Gas, which runs Great Britain’s gas networks, and the pipeline’s owner will add about 10p a month to the average gas bill, the Guardian reported on 23 October.

Energy system operators expect enough gas and electricity to meet demand over the coldest months, partly by paying higher market prices than neighbouring markets to secure imports. Without the pipeline intervention, gas could have run out in a worst-case scenario combining failure of an important part of the gas network with plunging temperatures. That risk was not the central winter forecast.

More gas by sea and lower domestic production expected

The UK has some of Europe’s smallest gas stores after decades of relying on domestic production from the North Sea. UK production was forecast to fall by 6% this year compared with last winter.

Alongside pipeline supplies, National Gas forecasts about 5% more imports of liquefied natural gas (LNG), delivered by ship, than last winter. LNG market prices are three times their level before the Middle East crisis severely disrupted Gulf supplies, the Guardian reported. That comparison concerns market prices, not household gas bills.

National Gas’s winter outlook suggests prices could remain elevated if UK buyers have to compete more fiercely with other European countries for LNG cargoes while gas storage levels across the continent are low.

Electricity imports and gas backup

The National Energy System Operator forecasts that Great Britain will import more electricity than it exports over the colder months. The Guardian reports that those imports are likely to cost more because European power supplies are tighter than last winter.