13th October 2017
Gas security of supply
The Department for Business, Energy & Industrial Strategy (BEIS) has published a review, undertaken by CEPA, which contributes to the department's assessment of gas security and supply. CEPA's report studies the impact of shocks to GB gas supplies under different demand scenarios and their impact on security of supply in GB for 2016-2035.
The main findings are:
- The GB system is resilient to almost all significant individual shocks under normal demand conditions. The report therefore focus on combined shocks during periods of high demand to stress test the system, even though these are less likely to occur simultaneously.
- The modelling shows that even where there is an extreme shock to global LNG markets, GB demand can be met if GB consumers are willing to pay for it.
- The modelling shows that GB demand for gas will be met in circumstances where there is an extreme disruption to Russian gas supplies to Europe (for a 12-month period) if GB consumers are willing to pay for it.
- The modelling shows that as long as GB consumers are willing to pay sufficiently for scarce gas supplies, only in the most extreme (and highly unlikely) scenarios we considered (a long disruption to Russian supplies combined with a GB LNG infrastructure outage in winter) might there be some unmet demand.
- The main insight from this work is that price is the primary determinant of whether sufficient gas is available to meet GB demand, but in some instances the availability of adequate import capacity and key infrastructure may also be critical.
To find out more about CEPA's work in the energy sector, please contact Richard Rodger by email or T. +44 (0)20 7269 0210