UK gas, power grids ready for winter despite global turmoil, operators say

UK Gas and Power Grids Ready to Meet Winter Demand, Say Operators

Winter Energy Outlook for the UK

By Nora Buli

OSLO, Oct 23 (Reuters) - Britain should have enough gas and electricity to meet peak demand this winter despite higher energy prices driven by conflict in the Middle East, the country's gas and power system operators said on Friday.

Energy Prices and Market Context

National Gas and the National Energy System Operator (NESO), which run Britain's gas and electricity networks, published their annual winter outlooks as energy prices remain elevated. UK front-month gas and power prices have risen about 180% and 120%, respectively, since the start of the Iran war, feeding through to consumer bills.

Impact of Gas Prices on Electricity

Gas-fired power plants typically set electricity prices, and so higher gas prices tend to push up power costs.

Gas Supply and Demand Forecasts

National Gas forecasts peak gas demand of 493 million cubic metres per day this winter, 2% higher than last year, largely due to stronger demand from power stations. Overall gas demand is expected to fall 1%.

Supply Capacity and Margins

Peak gas supply capacity is estimated at 592 mcm/day, leaving a buffer of 99 mcm/day. That margin would fall to 18 mcm/day if the largest single part of the transmission system failed, a scenario National Gas said was highly unlikely.

Import Capacity and External Factors

The operator said a deal approved on Thursday to maintain import capacity through the Interconnector pipeline from Belgium had improved its outlook, although Europe's lower-than-normal gas storage levels are likely to restrain imports.

Disruptions in the global liquefied natural gas (LNG) market could also still affect supplies.

Long-Term Gas Supply Outlook

"Our analysis shows that Great Britain is expected to have sufficient gas supply capability to meet demand throughout winter 2026/27, even under a range of very unlikely high-stress scenarios," said Glenn Bryn-Jacobsen, National Gas' director of energy systems and resilience.

Electricity Supply and Capacity Margins

On the power side, NESO expects spare capacity of 5.9 gigawatts above peak demand during a typical cold spell, equivalent to 9.5% of peak demand. The margin is broadly in line with recent winters and wider than during the 2022 energy crisis.

Factors Supporting Electricity Margins

Higher peak demand has largely been offset by additional battery storage, gas-fired generation and wind power, NESO said. The margin is also higher than its June estimate because it now expects more wind generation to be available during peak periods.

Potential Challenges and System Responses

NESO said some days in December and January could be tight and require routine balancing tools such as electricity margin notices. It stressed that such notices signal a need for additional generation and do not indicate a risk to electricity supplies.

(Reporting by Nora Buli. Editing by Nina Chestney and Mark Potter)