Britain can meet winter energy demand -National Grid

LONDON (Reuters) - Britain will be able to meet power and gas demand this winter, even in the event of an extreme cold snap, National Grid said in its 2018/19 winter outlook report on Thursday.

Electricity pylons and a cooling tower from Eggborough power station are seen above a farmers' field in Kellingley, Britain August 1, 2018. Picture taken August 1, 2018. REUTERS/Phil Noble

“For this winter, even under colder conditions than experienced in recent years, we are confident we have the right products and strategies in place to help us balance the gas and

electricity networks,” National Grid said.

In March this year National Grid was forced to issue a gas deficit warning for the first time in eight years after Europe was gripped by a cold snap, dubbed the “Beast from the East”, and after several pieces of gas infrastructure suffered outages.

National Grid said the warning had the desired effect, encouraging more gas to come to the market and demonstrated that Britain can meet its gas demands from a variety of sources even if there is an extreme event.

Total gas demand is forecast at 46.6 billion cubic metres this winter, slightly lower than last winter, which National Grid said was due to lower forecasts of demand from gas-fired power generators.

“As global gas prices have risen, it is likely that coal will replace gas in the generation merit order for some of the winter,” the report said.

National Grid said the country would also have enough electricity to meet demand this winter, with the so-called de-rated margin, or surplus power margin, forecast at 7.1 gigawatts (GW), 0.9 GW more than the forecasted margin of winter 2017/18.

Electricity demand is expected to peak in the first half of December, with peak demand forecast at 48 GW.

Wholesale electricity prices are likely to be volatile over the period partly driven by the weather dependency of renewable generation, the report said.

Electricity prices in continental Europe are likely to be lower than in Britain in winter, meaning National Grid expected to see a net flow of electricity imports into Britain over the period.

“However, outages on the Belgian nuclear fleet... could increase continental prices and create some uncertainty on interconnector flow direction,” the report said.

Belgium faces an unprecedented power shortfall ahead of winter, with only one of seven nuclear reactors scheduled to operate in November, which provide around 50 percent of the country’s electricity.

Britain has electricity interconnectors with France, the Netherlands and Ireland.

Reporting By Susanna Twidale and Nina Chestney; editing by Jason Neely and Jon Boyle