In a recent post, A Beginners Guide to Blackouts, I drew attention to the fact that keeping the lights on in Britain was to a large extent dependent upon our ability to source sufficient gas to power the country’s large fleet of combined cycle gas turbines. The official view from the UK Government, National Grid and OFGEM (the regulator) is that the:
• Gas market is well supplied and able to cover any cold spells.
• Gas supplies, storage and network capacity well in excess of maximum expected demand.
• Supply interruptions from Russia pose a low risk to UK energy security.
This seems rather optimistic for a number of reasons that include:
• Global Liquefied Natural Gas (LNG) supplies have fallen for the last two years despite rampant demand and high prices
• Competition for LNG supplies from Japan is fierce since that country closed down all of its nuclear power stations
• Indigenous European gas supplies have been falling since 2004
• Europe and the USA have decided to pick a fight with Russia, Europe’s closest, largest and most reliable supplier of natural gas
So, will the UK and the rest of Europe be able to source sufficient gas to keep the lights on this winter? This is quite a complex question to answer.