The outlook comes as European gas prices reach their highest level since December 2022, following disruptions to supplies from the Middle East. Britain’s limited gas storage capacity and declining North Sea production have added to concerns about the cost of maintaining reliable supplies.
Gas Imports Set To Increase As European Supplies Tighten
According to The Guardian, National Gas expects Britain to have sufficient gas throughout the winter, partly because buyers will pay higher market prices than neighbouring countries to secure imports.
The forecast follows a last-minute agreement involving a major Belgian pipeline, which reversed a planned reduction in capacity. Energy regulator Ofgem approved the arrangement, adding approximately 10p a month to the average household gas bill.
Without the agreement, Britain could have faced shortages under an extreme scenario involving freezing temperatures and the failure of a significant part of its gas network. National Gas also expects imports of liquefied natural gas (LNG) transported by ship to increase by approximately 5% compared with last winter. Prices are currently three times higher than before the Middle East crisis disrupted supplies from the Gulf.
Competition for LNG cargoes could intensify because European gas storage levels remain unusually low. By the end of August, the continent was heading towards its lowest storage levels in 13 years.
Reduced exports from Qatar and increased electricity consumption during summer heatwaves contributed to the situation. Britain faces additional pressure from declining domestic production. North Sea gas output was forecast to fall by 6% compared with last winter, while the country maintains some of Europe’s smallest gas storage facilities.
The recently approved Jackdaw gasfield is expected to provide a modest increase in domestic supplies when production begins next month. Its contribution was not fully reflected in the winter forecasts.
Electricity Imports and Grid Constraints Add to Winter Pressures
Britain is also expected to import more electricity than it exports during the colder months, with European supply conditions likely to increase costs. According to the National Energy System Operator (Neso), electricity supplies should remain sufficient to meet winter demand, although tighter conditions across neighbouring markets could make imports more expensive.
Summer heatwaves have affected European electricity generation. Lower river levels reduced French nuclear output, while Norway’s hydroelectric reserves have remained below their 10-year minimum since late July.
Figures from the Office for National Statistics show that Britain spent a record £4 billion on electricity imports during the year ending in August. Approximately half of that expenditure went towards electricity purchased from France.
Domestic grid constraints have also increased costs. Gas-fired power stations received near-record payments to generate electricity, while wind and solar installations were paid to stop producing power because of network bottlenecks.
While increased renewable energy generation is expected to reduce Britain’s overall reliance on gas-fired power stations this winter, gas demand during periods of extreme pressure on electricity supplies could be 7% higher than previously estimated.
National Gas has consequently raised its estimates for gas demand during extreme electricity supply scenarios. Glenn Bryn-Jacobsen, a director at National Gas, said these combined pressures had resulted in “tighter supply margins during periods of high demand and system stress”. The forecasts nevertheless indicate that Britain should have enough energy to meet demand throughout winter, albeit at potentially higher prices.
