Wednesday, 27 Oct 2021

Britain's National Grid warns of tight electricity supplies this winter

LONDON (REUTERS) – Britain faces tight electricity supplies this winter on rising demand and capacity constraints, National Grid said in a report on Thursday (Oct 7), though a top official said he was confident it will keep the lights on.

The report comes amid record high energy prices in Britain which contributed to nine energy suppliers going bust last month, caused some industrial firms to curtail production and warnings over some food shortages this winter.

European electricity and gas prices have soared this year as tight gas supplies have collided with strong demand in economies recovering from the Covid-19 pandemic.

Britain’s National Grid is responsible for overseeing the country’s energy supply and ensuring supply and demand are evenly balanced.

Its Electricity System Operator (ESO) said its base case for de-rated margin, which is a measure of the amount of excess capacity expected above peak electricity demand, is currently 3.9 gigawatts (GW) for winter 2021/22, or 6.6 per cent of capacity, down from 4.8GW, or 8.3 per cent last winter.

“We are confident that there will be enough capacity available to keep Britain’s lights on,” Fintan Slye, executive director of ESO said in a statement with the Winter Outlook 2021/22 report.

The latest forecast, however, is lower than a winter margin forecast of 4.3 GW made in July this year and also the lowest margin level since the winter of 2016/17.

Since the July forecast a fire at the United Kingdom’s side of the France-Britain IFA1 electricity interconnector has cut available capacity through the link by half, or 1 GW, until March next year.

The other 1 GW capacity of the IFA1 link is currently offline due to planned maintenance and is scheduled to be back online by Oct 23, with the returning capacity factored into National Grid’s forecasts.

At times of tight demand ESO sometimes issues electricity margin notices (EMNs) signalling to the market it would like more capacity to be made available.

The report said it expects to issue a similar number of EMNs this winter as last year, when six were issued.

In each instance last winter, the market reacted and the EMNs were later cancelled.

National Grid also published a gas outlook on Thursday saying it expects to have enough gas to meet demand this winter.

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