UK gas supplies dwindle, forcing Grid to step in to keep families’ heating on

BRITAIN faced a gas shortage last night amid a spike in demand caused by the big freeze, a lack of storage capacity and import failures.

The National Grid was forced to a issue a ‘gas deficit warning’ and put in place emergency measures to ensure domestic supplies were not interrupted.

This involves asking major industrial gas users to cease or scale back production in order to release the gas needed to keep the nation’s central heating systems supplied.

The moves flagged up the fragility of the nation’s energy supply system and the fact that Britain is becoming increasingly reliant on gas imports over the winter months.

The warning will heighten concerns that the Government and energy firms have failed to ensure the country has sufficient gas storage facilities to cope with swings in demand when the weather turns cold.

The freezing temperatures caused a surge in demand for gas yesterday which was about one third higher than normal for this time of year.

The National Grid said this led them to issue the gas deficit warning.

The situation has been made worse as British Gas owner Centrica, is in the process of closing the Rough gas storage facility, which is the largest in the UK and sits off the Yorkshire coast beneath the North Sea.

The facility would usually be filled with gas during the summer months and these supplies then used to see the country through winter shortages.

However, Centrica announced its closure last year, despite warnings it would put the country’s gas supplies at risk and lead to price volatility.

The cold weather has also led to a surge in the so-called spot price of gas – which is purchased and delivered on the same day.

The figure rose to a 12-year high, from 54p a therm earlier this month to 200p yesterday.

The spike in the spot price is evidence of a wider increase in the wholesale cost of energy that is expected to bring a rise in bill for millions of householders.

During the winter, Britain is now heavily reliant on imports of gas from the Continent through pipelines and, particularly, Norwegian gas fields.

We also get imports of liquefied natural gas (LNG) via tanker to terminals in Wales and Kent.

Last winter, some 38 per cent of the UK gas came from the North Sea, 42 per cent from Norway and 10 per cent from continental Europe. A further 4 per cent came from LNG from countries such as Qatar, with the remainder provided by storage facilities.

The National Grid said an ‘outage’ at the South Hook LNG terminal in Wales, yesterday meant its usual daily output was not available. The flow of gas from Norway was also reduced because of technical problems.

The Government was warned last year that the closure of Rough, which could meet 10 per cent of daily peak winter demand for nearly three months, will cause problems.

The Energy & Utilities Alliance, a trade body whose members include energy firms SSE and ScottishPower, pressed for a Parliamentary inquiry into the long-term consequences of the closure but this was rejected by Government.

Its chief executive Mike Foster said: ‘The announcement today by National Grid that gas supplies may be interrupted due to a combination of cold weather, lack of gas storage and operational issues is entirely predictable.

‘When the Government gave permission to Centrica to close the Rough facility, we warned them about just this scenario.

‘Ironically, there is a meeting

‘Domestic supplies won’t be affected’

planned with the Energy Minister Claire Perry in two weeks’ time, as a result of our lobbying for a full review into UK gas storage to be undertaken. Perhaps this time they will listen to us.’

Yesterday, Miss Perry said: ‘The National Grid is following a standard procedure and domestic supplies won’t be affected. So do carry on using your heating and cooking meals as normal.’

Dr Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit (ECIU), said: ‘Behind today’s gas deficit warning is a ‘perfect storm’ of unrelated short-term issues. But underlying it is another set of issues that speak to a failure by successive Governments to map out a secure gas future in the way that they have done so successfully for electricity.’

Last year, the Department for Business, Energy and Industrial Strategy insisted closing Rough would cause no problems.

The National Grid explained its decision to issue the warning, saying: ‘National gas demand today is high and due to the extreme weather there have been gas supply losses overnight.

‘We are in communication with industry partners and are closely monitoring the situation.’

Stuart Fegan, GMB National Officer for Energy, said: ‘When the National Grid issues a worrying gas warning like this – you know things are serious.

‘When the supply is low, energy companies will inevitably hike prices to make a quick buck – so we all suffer.’