On 1st March 2018, in unusually cold weather, National Grid issued a warning that the UK may not have enough gas to meet demand in the short term. The forecasted requirement of nearly 4,000 million cubic metres for the following day indicated a potential shortfall of approximately 50 million cubic metres. Wholesale prices soared.
The problem was compounded by a number of outages, some of which related to the cold weather. These included on-going problems with a pipeline to the Netherlands, reductions in crucial flows from Norway, and technical issues at the Barrow gas terminal in North West England.
Measures were put in place to procure additional supplies, manipulate the electricity generation mix and to reduce the industrial use of gas temporarily. Some major manufacturing energy users have supply contracts that can be suspended in this way in return for cheaper prices. Fortunately, the onset of warmer weather alleviated some of the pressure and the measures were successful in maintaining supplies to domestic customers on this occasion.
However, the situation had shone a light on the status of gas supply and storage in the UK. Gas storage capacity is at the lowest level since records began in 2006, principally because of the closure of Centrica’s Rough gas storage facility off the East coast under the North Sea. This had been responsible for some 70% of the country’s storage capacity.
Our own gas production form the North Sea fields is reducing, and while liquefied natural gas (LPG) is being imported through facilities in Kent and Pembrokeshire, market prices are increasingly pushing LPG towards a massive demand from Asia. Overall, our daily gas reserves are just a fraction of what they used to be.
Research in 2017 by the University of Edinburgh (here) suggests that recoverable UK oil and gas could run out by 2027. Some analysts believe that global stocks of oil will run out in 2052, and that we will need to use gas to fill the gap, meaning that those reserves too will be used up by 2060. Any new finds are likely to be smaller and more expensive to extract and transport.
A significant proportion of known gas reserves are held or controlled by countries that are not politically allied to the UK, and could hold western Europe to ransom. Others are in politically and socially unstable nations.
British shale gas companies suggest that they could save the day, and hope that UK fracking will finally begin in earnest in 2018. The British Geological Survey believes that UK geology has the potential to provide sufficient shale gas to meet our demand for 25 years, but in the face of opposition and conflicting expert opinion on how much will actually be extracted from the ground, fracking may not be a major or long-term panacea.
In 2018, research headed by an eminent geologist, Professor John Underhill of Heriot-Watt University, suggested that we have overestimated potentially extractable reserves as our tilted and folded geological strata are less likely to hold fossil fuel deposits than unaltered geology, and that any deposits that have formed have been dispersed into small pockets that make them less suitable for extraction.
So should households considering replacement gas boilers, heating and appliances be worried? Despite the price rises, gas is still a reactively cheap fuel. But with its increasing use for electricity generation as we phase out more carbon-intensive coal, and with the proposed replacement nuclear sources taking longer than expected to come on line, how long will the gas last? And, if stocks dwindle, which of all of the eggs in the gas basket will get priority, electricity generators, essential services, businesses or domestic users?
Policy dictates that domestic consumers should be the last to experience deficits with business customers bearing the brunt of any shortages. The projections suggest little cause for panic in the short term. Nevertheless, the gas supply system is beginning to show signs of fragility and it does not take much to push its resilience to the limit. These sound like good reasons for making homes more energy efficient, and for installing a diverse range of energy technologies.
To order an EPC for your home to find out what technologies are best for you, contact Find EPC.