UK ministers warned of ‘emerging risk’ to gas supply

LONDON — Ministers must act now to address an “emerging risk to gas supply security,” the government’s official independent energy advisers have warned. 

The government must make plans to avert a threat to future gas supplies, the National Energy System Operator (NESO) said. 

While the advisers say the conditions creating a gas supply crisis are unlikely, any shortage would have a severe impact on the country.

In its first annual assessment of Britain’s gas security, expected to be released later today but seen by POLITICO, the NESO said diminishing reserves of gas in the North Sea and competition for imports are creating new energy security risks, even as the country’s decarbonization push reduces overall demand for the fossil fuel. 

Britain is projected to have sufficient gas supplies for normal weather scenarios by winter 2030/31, but in the event of severe cold weather and an outage affecting key infrastructure, supply would fall well short of demand, NESO projects.  

The scenario in the report involves what the NESO calls the “unlikely event” of a one-in-20-year cold spell lasting 11 days alongside the loss of vital infrastructure.  

If this were to occur, the consequences of a shortfall in gas supply could be dire.  

It could trigger emergency measures including cutting off gas from factories, power stations, and — in extreme scenarios — homes as well. It could take weeks or months to return the country to normal.  

The vast majority of homes still use gas boilers for heating.  

Vulnerability

Informed by the NESO’s findings, ministers have published a consultation setting out a range of options for shoring up gas security. 

It comes amid growing concern in Whitehall about the U.K.’s vulnerability to gas supply disruptions. Russia is actively mapping key offshore infrastructure like gas pipelines and ministers have warned it has the capability to “damage or destroy infrastructure in deepwater,” in the event that tensions over Ukraine spill over into a wider European conflict. 

While Britain has long enjoyed a secure flow of domestically-produced gas from the North Sea — which still supplies more than a third of the fuel — NESO’s report says gas fields are experiencing “rapid decline.” The amount available to meet demand in Britain falls to “12 to 13 percent winter-on-winter until 2035,” it says. 

That will leave the U.K. ever more dependent on imports, via pipeline from Norway and increasingly via ship-borne liquefied natural gas (LNG) from the U.S. — and Britain will be competing with other countries for the supply of both. 

The report projects that during peak demand periods in the 2030s, the Britain’s import dependency will be as high as 90 percent or more. 

Overall, gas demand will be lower in the 2030s because of the shift to renewable electricity and electric heating, but demand will remain relatively high on very cold days, and when there is little wind to power offshore turbines, requiring gas power stations to be deployed, the report says. 

“This presents emerging risks that we will need to understand to ensure reliable supplies are maintained for consumers,” it adds. 

Reducing demand for gas by decarbonizing will be key, the report says, and risks are higher in scenarios where the country slows down its shift away from gas.  

But decarbonization alone will not be enough to ensure the U.K. would meet the so-called “N-1 test” — a sufficient supply of gas even if the “single largest piece” of gas infrastructure fails — during a prolonged cold spell in winter 2030/31. In that scenario, “peak day demand” is projected to reach 461 million cubic meters (mcm), but supply would fall to 385 mcm, resulting in a supply deficit of 76 mcm, a shortfall of around 16 percent of what is needed to power the country on that day. 

That means ministers should start considering alternative options now, including the construction of new infrastructure like storage facilities, liquefied natural gas (LNG) import terminals, or new onshore pipelines to ensure more gas can get from LNG import sites to the rest of the country. The government consultation will look at these and other options.  

The critical piece of gas infrastructure considered under the N-1 test is not identified for security reasons, but is likely to be a major import pipeline from Norway or an LNG terminal. The report says that even “smaller losses … elsewhere in the gas supply system” could threaten gas security in extreme cold weather. 

Gas security ‘paramount’ 

The findings will likely be seized on by the oil and gas industry to argue for a more liberal licensing and tax regime in the North Sea, on a day when the government announced its backing for more fossil fuel production in areas already licensed for exploration. 

But such measures are unlikely to be a silver bullet. The report says: “Exploration of new fields is unlikely to deliver material new capacity within the required period.” 

Deborah Petterson, NESO’s director of resilience and emergency management, said that gas supply would be “sufficient to meet demand under normal weather conditions.” 

“We have, however, identified an emerging risk to gas supply security where decarbonization is slowest or in the unlikely event of the loss of the single largest piece of gas infrastructure on the system. 

“By conducting this analysis, we are able to identify emerging risks early and, crucially, in time for mitigations to be put in place,” she added. 

A spokesperson for the Department of Energy Security and Net Zero said ministers were “working with industry to ensure the gas system is fit for the future, including maintaining security of supply — which is paramount.”  

“Gas will continue to play a key role in our energy system as we transition to clean, more secure, homegrown energy,” they added. “This report sets out clearly that decarbonization is the best route to energy security — helping us reduce demand for gas while getting us off the rollercoaster of volatile fossil fuel markets.” 

Glenn Bryn-Jacobsen, director of energy resilience and systems at gas network operator National Gas Transmission, said in the short-term, Britain’s gas supply outlook was “robust” but that “looking ahead, we recognise the potential longer-term challenges.”

“Gas remains a critical component of Britain’s energy security — keeping homes warm, powering industry, and supporting electricity generation during periods of peak demand and low renewable output,” he added.

“In considering potential solutions, it is essential to look at both the gas supply landscape and the investment required in network infrastructure,” he said.