Energy demand and supply margins ‘tighter than ever’

Posted at October 7, 2013 » By : » Categories : News » Comments Off on Energy demand and supply margins ‘tighter than ever’

Energy demand and supply margins ‘tighter than ever’

Posted on 07 October 2013 by Priyanka Shrestha

Today the National Grid warned the difference between energy demand and supply is “tighter” than it has ever been.

Speaking at a press conference this morning, the power grid operator’s Market Operations Director Chris Train said the UK’s electricity margin – which is the difference between peak demand and the available supply – is predicted at just 5%.

Despite this he assured the overall supply looks “pretty healthy” and insisted the nation has enough gas and electricity supplies to get it through this winter.

He added: “There’s no room for complacency but we’re confident the market has the ability to deliver across this winter and National Grid has the right mix of physical assets and operational and commercial tools to ensure the customers receive their energy needs reliably throughout this period – reliably, efficiently and safely.”

In its 2013/14 Winter Outlook Report released today, National Grid has forecast electricity demand at 56.3GW and gas demand at 511million cubic metres per day (mcm/d) while the maximum supply forecast to the UK is 594mcm/d.

Gas storage in the UK is around 80% full and is predicted to be “near full” by early next month while the interconnector capacity available this winter stands at 3.8GW.

National Grid – which operates the gas and electricity transmission network – said there are no planned generation outages over the winter period but the available capacity is “likely to be reduced by unforeseen plant breakdowns and by fuel source availability limitations for hydro and wind generation”.

Energy regulator Ofgem however said the risk to security of supply is “increasing faster than expected” but could potentially lessen in the second half of the decade.

Speaking at the report’s launch, Head of Retail Markets Emma Kelso added gas production from the UK Continental Shelf (UKCS) is forecast to decline, with increasing import dependency in Europe, one of the main drivers being policy. She added there is uncertainty around the future role of gas in the generation mix but noted the overall risk of supply disruption to customers “remain low”.

Earlier this year National Grid predicted next winter’s energy prices to be fairly flat except when it comes to gas while Ofgem warned the possibility of Britain facing power shortages could significantly rise towards the middle of the decade as ageing power plants retire.

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