On Thursday, shadow energy secretary Andrew Bowie raised concerns on social media about a warning from Ofgem that it cannot guarantee meeting gas demand on a peak winter day. He attributed this to an accelerated decline in domestic gas supply from the North Sea. Opposition leader Kemi Badenoch echoed this sentiment on BBC Breakfast, highlighting Ofgem’s statement about potential gas demand issues.
Ofgem’s assessment, however, is based on a very specific and rare scenario involving extreme weather pushing gas consumption to high levels combined with the country’s largest single gas source going offline. The regulator found that under these conditions, Britain’s gas demand could slightly exceed supply, but only if a planned reduction in the capacity of a pipeline to Europe proceeds. Ofgem’s announcement aims to prevent this reduction, ensuring sufficient capacity even in rare conditions.
Ofgem’s consultation paper, released on October 20, seeks to compensate gas grid operator National Gas for preventing a pipeline capacity reduction. The regulator assessed that peak gas demand during an extremely cold snap could reach 408 million cubic metres per day (mcm/d). Current supply capacity stands at 505 mcm/d, but this could drop to 480 mcm/d if the pipeline reduction occurs. Even with this reduction, supply would still exceed demand, but Ofgem’s model accounts for potential faults, such as the two Welsh LNG terminals going offline, which could create a shortfall of 5 mcm/d.
Ofgem’s proposal aims to keep the European pipeline’s capacity unchanged, addressing significant reductions in interconnector capacity since 2020. The INT interconnector, which was planning a further 25 mcm/d reduction, will now maintain its current capacity. This ensures supplies can reach 428 mcm/d this winter, even with the Welsh LNG terminals offline, more than enough to meet peak demand scenarios. Ofgem acknowledges this as a medium-term fix but emphasizes the need for further government-led measures.
In the event of a 5 mcm/d shortfall, a “Network Gas Supply Emergency” could be declared, though this has never happened in British history. This could lead to factories reducing consumption and households being asked to use less gas. Ofgem also considered other supply margins, such as the remaining LNG terminal’s capacity and storage, but chose more conservative figures for reliability.
The erosion of supply capacity is attributed to reduced pipeline capacity from Europe and declining gas production from the UK’s North Sea, due to geological and commercial factors. The Conservative Party has been contacted for further comment.