Energy UK Response to DESNZ consultation: Gas System in transition: Security of Supply

Executive Summary

Energy UK welcomes this government consideration of gas security of supply well ahead of when any significant system stress events may occur. This will enable further analysis and development of mitigating measures where necessary.

Our initial view is that support may be needed to ensure security of supply and that should be focussed on infrastructure rather than gas flows which we expect to respond to market signals. The first priority should be to secure gas storage capability to avoid risks of closure or reduced capacity. Also, that any intervention should be mindful of unintended consequences and risk of creating distortions in the market. As far as possible mechanisms should complement and work with the market rather than directly intervene, which could risk an overall detrimental impact on security of supply.

We also think there would be merit in a more joined up approach to security of supply across energy markets, not only the role gas plays in supporting the electricity market but also on occasion when this may be reversed. For example, at a time of gas system stress it may be possible to reduce electricity demand or increase non-gas generation sources which could reduce the demand for gas generation and support the gas system. A whole energy system view by NESO would be needed for this.

Energy UK looks forward to further engagement with DESNZ and Ofgem as options are developed and refined.