Britain 'Resilient on Security of Supply': Official Report

The UK government has published a strategic assessment of the security of gas supply in Great Britain (GB).

Britain will be “able to meet demand from available supply under all but the most extreme circumstances,” the report, published October 12, concluded.

The report, supported by a detailed analysis by consultancy Cambridge Economic Policy Analysts (CEPA) also concludes that Britain’s gas grid system has evolved and will continue to do so and is resilient to all but the most extremely unlikely shocks.

However it also notes that “efficient market trading of gas with Europe can assure good security of supply and efficient allocation of gas resources during times of system stress" – something that, at a time of uncertain Brexit negotiations between the EU and UK, looks less guaranteed. (Chief EU negotiator Michel Barnier said October 12 there was still "deadlock" over the stage 1 talks, which include how much the UK should pay the EU when it exits.)

CEPA's modelling was completed prior to the announcement in June 2017 that the Rough storage field would be shut for good but included scenarios that examined the impact of its future closure.

The report adds that GB supply diversity is good, with a mix of indigenous UK gas (on trend to decline), Norwegian and other piped imports, plus LNG that is globally secure and available from a range of exporting countries. However, it supports future monitoring of LNG markets, plus steps at an international level to reduce LNG turnaround times and thus mitigate the impact of any “shocks” on delayed cargo shipments.

In January, a key Algerian LNG export plant at Skikda went into unscheduled turnaround, causing a spike in gas hub prices in Algeria's short-haul markets in southern France and Spain, as neither was able to schedule replacement cargoes to cover the shortfall for several weeks. Both markets, however, were able to cover requirements from storage, despite very high levels of demand due to unusually cold wintry temperatures.

HSE looking at widening UK gas specifications 

The GB report also suggests making it possible to land LNG from a wider range of sources, which could reduce end-consumer bills: "Current gas standards, set narrowly for the characteristics of North Sea gas, are being reviewed by the [UK safety regulator] HSE and could result in wider gas standards which would allow 90% (up from 10%) of LNG into GB without processing." Furthermore the report indicates this might have a lower impact on consumer costs of over £300mn/yr ($396mn) by 2020.

 

Mark Smedley

 

 


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