National Grid is scrambling to stock up on gas reserves ahead of the winter as Britain won’t be able to import enough from Europe as Russia’s war in Ukraine shakes markets.
Bosses have issued a bid for additional gas to deal with short-term disruptions as cuts in Russian supplies to the continent raise energy shortage concerns when cold weather hits.
Craig James, head of national control at National Grid, told the industry that “to secure the grid over a range of fault potentials or supply conditions requires additional gas operating margins”.
Noting strong continued demand for gas exports from the UK to Europe, he added: “We also believe there is a reduced likelihood of interconnector flows from continental Europe to the UK during the winter period”. Interconnectors are underwater pipes or cables that can deliver gas and electricity from the continent at peak times.
Mr James’ comments are an ominous sign of winter to come, as Britain usually has to import some gas from Europe during the winter to meet its own heating and power generation needs.
Britain has exported a record amount of gas to Europe since the Russian invasion of Ukraine began, effectively acting as a “gas bridge” for supplies from the US and other countries to the continent.
In the winter, Britain can usually withdraw gas from the continent through higher prices, but there’s no guarantee that will happen this year when supplies are tight elsewhere.
It comes as winter preparations ramp up across the industry in what will be a major test of resilience given lost Russian supplies to the continent.
This week National Grid will release forecasts for electricity and gas deliveries over the winter. They are expected to be “more robust” than preliminary forecasts, which raised concerns about over-reliance on electricity imports from the continent. “I think we have to be realistic,” said an industry source.
It is understood that suppliers, producers and grid owners are currently testing their processes to see how they would cope if gas supplies were to fail. “It’s all taken very seriously,” said another industry figure.
National Grid’s critical stress tests, which mimic a gas supply crisis, were delayed after the Queen’s death but started last week and are due to take place this week. Regardless, companies are offered payments to agree to reduce or defer energy use to help manage supply.
Britain imports little gas directly from Russia, but cuts in Kremlin supplies to Europe have wreaked havoc on markets worldwide and increased competition for scarce global supplies.
Soaring prices in the UK have caused household and business energy bills to triple or more, forcing the government to step in and subsidize bills estimated to cost taxpayers £60bn over the next six months.
Despite supply cuts, Europe has managed to fill its gas storage facilities to more than 80 percent after reducing usage. Notable examples of energy savings include Paris turning off the lights on the Eiffel Tower earlier than usual.
Success in storage has put Europe in a better position than feared, but it remains vulnerable. Damage to the Nord Stream pipelines, built to bring gas from Russia to Europe, dashed hopes that Nord Stream 1 could get back online and fueled suspicions of Russian sabotage.
The Telegraph announced this week that the UK has launched an urgent security review of the North Sea energy pipelines amid fears other energy infrastructure could be vulnerable.
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