Fact check: Ofgem and National Gas plan will prevent tight supplies this winter
On social media on Thursday shadow energy secretary Andrew Bowie said: “Sneaked out by OFGEM this morning, a warning for the first time EVER they cannot guarantee that demand will be met on a peak day in winter.
asserted
demand → prevent → winter
Let’s be clear what that means.
asserted
that → mean → what
They cannot guarantee that homes will be warm, lights come on or industry function on a peak day this winter.
asserted
industry → guarantee → day
A similar sentiment was echoed by opposition leader Kemi Badenoch appearing on BBC Breakfast on Friday (interview from around two hours 29 minutes in the recording): “Yesterday, Ofgem talked about gas demand and how we might not be able to handle a single peak day in winter.”
uncertain
we → echo → winter
Evaluation
Ofgem’s assessment is based on a very specific scenario where not only does extreme weather push gas consumption to very high levels, but is also combined with the country’s biggest single source of gas going offline.
asserted
weather → base → gas
It found that in these “very rare stress conditions” Britain’s gas demand could be very slightly higher than the amount the grid is able to be supplied with.
But this would only be the case if a planned reduction in the capacity of a pipeline to Europe goes ahead.
uncertain
reduction → find → Europe
Ofgem’s announcement this week was intended to prevent that from happening, therefore ensuring that there will be more than enough capacity even in these very rare conditions.
asserted
announcement → intend → conditions
The facts
Ofgem released a consultation paper on October 20 which is intended to help gas grid operator National Gas be compensated for a deal which prevents a pipeline which connects Britain to mainland Europe from reducing its capacity.
asserted
which → release → capacity
Supplies of gas to the British grid come from a few different sources: UK North Sea production, Norwegian North Sea production, liquid natural gas (LNG) terminals, gas storage sites and pipes that connect Britain to Belgium and the Netherlands.
asserted
that → come → Belgium
Read More
If that reduction were to take place – which it now appears it will not – potential supply would drop to 480 mcm/d.
This is still well above the peak demand that Ofgem modelled on an unusually cold day (408 mcm/d).
asserted
Ofgem → read → day
However as a precaution in these scenarios the system also has to plan for what if something goes wrong during a particularly cold snap.
asserted
something → have → snap
This is why the scenario is so rare: Not only does it need an unusually cold snap, it also requires a major fault on the system at the very same time.
asserted
it → need → time
The chance of both happening at the same time is low.
asserted
both → happen → time
So, how much gas could be supplied in this scenario where not only has the reduction to the pipeline happened, but also the two Welsh LNG terminals have gone down?
uncertain
terminals → supply → pipeline
Ofgem estimates in that scenario supplies to the grid could be 403 mcm/d.
What will change with Ofgem’s current proposal?
The current consultation is part of a plan to keep the European pipeline’s capacity unchanged.
uncertain
consultation → estimate → capacity
Over the 2020s, the capacity of Britain’s two interconnectors that tap into European gas networks, has reduced significantly.
asserted
that → tap → networks
The capacity of INT was 73 mcm/d in 2020, falling to 61 mcm/d today.
asserted
capacity → fall → d
But INT was planning a further 25 mcm/d reduction in October this year.
asserted
INT → plan → October
It is this reduction that will now not happen due to National Gas and Ofgem’s plan.
asserted
that → happen → plan
So assuming INT does not reduce its capacity as planned, supplies should be able to reach 428 mcm/day this winter even if the two Welsh LNG terminals go offline.
asserted
terminals → assume → mcm
This is more than enough to meet Ofgem’s 408 mcm/d scenario, and also enough to meet demand in the event of a repeat of the Beast from the East (417 mcm/d).
asserted
This → meet → East
What happens if there is a 5 mcm/d shortfall?
asserted
What → happen → ?
The Ofgem report does not say what it thinks would be the real-world impacts should demand be 408 mcm/d at a time when the system can only supply 403 mcm/d.
However National Gas, which runs the UK’s gas grid, does lay out more detail about what would happen in a more general emergency situation.
asserted
what → say → situation
If things get very bad – although it’s not clear if a 5 mcm/d shortfall would lead to this, it will depend on the precise circumstances – a “Network Gas Supply Emergency” could be declared.
uncertain
Emergency → get → circumstances
This has never before happened in British history but could lead to factories being told to reduce consumption, and households being asked to use less gas.
uncertain
households → happen → gas
As a last resort households supplies might be managed.
uncertain
supplies → manage → resort
There are other theoretical supply margins that Ofgem has decided not to include in its modelling of gas supply in the scenario it sets out.
asserted
it → be → scenario
For instance the one remaining LNG terminal in the scenario has a theoretical ability to supply 73 mcm/d to the grid.
asserted
terminal → remain → grid
However the most it has actually been observed supplying in the past is 61 mcm/d.
asserted
it → observe → past
Ofgem chose this second figure as a precaution.
asserted
Ofgem → choose → precaution
If it had chosen the first, it could theoretically make up the 5 mcm/d shortfall.
uncertain
it → choose → shortfall
It is a similar case in storage which could theoretically supply up to 112 mcm/d.
uncertain
which → supply → mcm
However, Ofgem said this is not a reliable measure of capacity as it assumes all facilities are “sufficiently full and able to deliver their maximum rate simultaneously”.
asserted
facilities → say → rate
Ofgem instead looked at the highest amount storage has supplied in the past, which was 86 mcm/d.
What has caused this erosion of supply capacity?
asserted
What → look → capacity
Ofgem sets out two reasons that the supply limits might be tighter now than in the past: The first has already been discussed: A reduction in the capacity of pipelines from Europe.
uncertain
first → set → Europe
This has happened incrementally since 2020.
asserted
This → happen → 2020
The Conservative Party has been contacted.
asserted
Party → contact → ?
The Aporia
