Winter electricity supply margin continues to widen

For the fourth year running, the system operator at National Grid has raised its outlook for the de-rated electricity supply margin over the coming winter, this time to 7.8GW – or 12.9 per cent.

The figure is up from 7.1GW – or 11.7 per cent – in last year’s forecast.

In the latest of its annual Winter Outlook reports, the system operator said underlying demand during an average cold spell is expected to peak at 60.4GW – a 0.1GW decrease on the previous forecast.

The total generation capacity available to meet this demand is predicted to rise by 2.1GW year-on-year to 106.7GW.

Forecast supply margin over the coming winter

Source: Winter Outlook 2019/20, National Grid System Operator

On the gas front, the system operator has forecast total demand, which amounted to 49.6 billion cubic metres (bcm) over the last winter season, to rise to 52.3 bcm.

Of this 11.7 bcm is expected to come from electricity generators – a substantial increase on the previous forecast of 7 bcm but a slight fall on the actual figure for last winter of 12.4 bcm.

The system operator predicted 1-in-20 peak day demand of 499 million cubic metres (mcm) but forecast that supplies of 588 mcm would be available. Both figures are up on last year’s predictions of 474 mcm and 575 mcm respectively.

“With global production of liquefied natural gas (LNG) currently outstripping demand, we expect to see high levels of LNG being supplied to GB shores this winter; similar to last winter,” it explained.

In a Brexit-related note, the system operator said gas supply margins will be sufficient “even in a scenario with no interconnector flows between GB and continental Europe”.

“However,” it added, “the market would need to attract regular LNG supplies to the UK.”

National Grid System Operator director Fintan Slye said: “Our latest Winter Outlook report demonstrates our work and shows that for the coming winter we have the right products and strategies in place to balance each network.

“It also highlights the changing nature of our energy system as a whole. Last year had the lowest carbon intensity winter on record in terms of electricity generation. If weather conditions are similar this winter, we expect this positive trend to continue and anticipate more records being broken, including increasing levels of renewable generation.”

Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, commented: “The outlook speaks to the ongoing trend of greener winters with each passing year, as low or zero carbon sources of electricity provide a growing part of the UK’s electricity supply.

“While a definite good news story, progress is being mainly driven by the electricity sector, within which there is an ever-smaller amount of low-hanging fruit to pick. To ensure that the UK remains within sight of the goal of becoming a net zero nation, the issue of reducing gas demand will become increasingly urgent.”