As temperatures plummeted today, there was concern over energy supplies. The amount of gas in storage has been run down as homes turn up the heating. To make matters worse, one of the two main pipelines from Europe broke down this morning. Officials have stepped in to reassure the public. There is no risk of the country running out - but we are running low.
Around 15% of the UK's gas comes from storage and stocks are "very low" according to industry insiders I have spoken to. It is normal for stored supplies to run low at this time of year - but the situation is made worse by this cold snap coming right at the end of the winter.
Alongside that, the "interconnector" pipe bringing gas from Europe broke down this morning. From 7am, a technical problem stopped the gas flow into the UK through that pipe from the Netherlands - it took about four hours to restore. Ofgem, the industry regulator, tells me it is monitoring the situation closely. It is liaising with Government and National Grid. So far so bad - or so it sounds. But I'm told there is not, at the moment, cause for alarm. The National Grid is not predicting disruption to household supplies. The UK has a spread of supply: it comes from storage; from imports (via two pipelines) and imports from tankers. As a result the national grid quote is clear and simple "there is plenty of gas available" They make the following points:
- The market is responding positively today – Liquefied natural gas (LNG) and storage have come on or have increased and there is plenty of gas available. Interconnector flows are restored.
- We anticipate that two cargos of LNG will be coming to the UK within a matter of days.
- Gas in storage is at levels that we would expect this time of year. Storage (especially long range) works by injecting in summer and withdrawing in winter when prices are higher – so you’d expect storage stocks to be lower at this time of year than at the beginning of winter (or even January).
- We are close to the end of winter and, while we are never complacent, temperatures should soon start rising and there is now less likelihood of a prolonged cold snap than earlier in the winter.
- Britain is fortunate in having diverse sources of gas supplies as well as storage – we still have UKCS, Norway, interconnectors, LNG – and the National Grid provides information about supply and demand to the market, and the market should respond by bringing in supplies from elsewhere if supplies from storage are low.
- Gas being used for electricity generation has stayed at normal levels and there hasn't been a sudden increase in demand from gas-fired power stations.