The UK energy minister has said the country must “do whatever it takes” to avoid a gas supply crisis after advisers warned of the risk of a shortage hitting homes and businesses by the end of the decade.
Michael Shanks promised the government would “redouble our efforts to decarbonise” the economy and make sure the UK had enough gas storage and import capacity, saying the previous government had failed to plan for shortages.
The minister offered assurances after the official energy system advisers warned that Britain could face a gas supply crisis by 2030 and the government should draw up plans to guard against the looming threat.
The National Energy System Operator (Neso) warned ministers to address an “emerging risk to gas supply security” that could mean homes and businesses going without gas during a prolonged period of cold weather.
“Such scenarios are unlikely,” Shanks said. “But this government will do whatever it takes to ensure our ongoing energy security and ensure we continue to provide the energy insurance we need for even the rare scenarios.
“While the previous government did not plan for this scenario, which was an inevitable consequence of the declining [North Sea] basin, we will take the necessary steps to ensure that the gas system and market adapt to continue to provide not just the baseload gas supply we need day-to-day for our power generation, home heating, and industrial production, but also the supply infrastructure we need to provide insurance on the rarest of cold days where demand is far higher.”
In the first gas supply assessment since the Neso was established last year, the operator found that even though the UK’s demand for gas was likely to fall overall, there could still be potential shortfalls on the coldest days.
Neso quietly published its warning to ministers, which suggested the decline of the UK’s domestic production of oil and gas was likely to accelerate, hours after the government set out its budget statement and economic forecasts.
Although the UK’s gas supplies were likely to be enough to cover demand when weather was normal, the report identified “an emerging risk to GB gas supply security” during periods of severely cold weather.
If even one piece of Britain’s ageing gas infrastructure suffered an outage, then the UK’s gas supplies would fall short of demand across all the scenarios Neso has modelled to 2030, according to the report.
This event would be “unlikely”, it said, but lead to emergency measures such as shutting off gas supplies to factories and power plants. In extreme scenarios homes could be affected as well. It could take weeks or months to return the country to normal, according to separate government reports.
Britain is heavily reliant on imports of gas via pipelines from continental Europe, as well as shipments of liquified natural gas (LNG) from Qatar and the US. About a third of the UK’s gas is from North Sea fields but domestic production fell to 50-year lows last year and is expected to fall further towards the end of the decade. “Collaboration will be essential to ensuring reliable supplies for consumers,” according to Deborah Petterson, Neso’s resilience director.
In forecasts where all gas supply and network infrastructure were working properly the risk of a shortfall could be far lower but it would still be evident in a scenario where the decarbonisation progress is slower and the UK remains more reliant on gas.
A spokesperson for the industry regulator, Ofgem, said it would work closely with Neso, the government and National Gas, which operates Britain’s gas networks, to “mitigate risks” in the system.
Glenn Bryn-Jacobsen, a director at National Gas, which operates Britain’s gas network, said: “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. In considering potential solutions, it is essential to look at both the gas supply landscape and the investment required in network infrastructure.”
