After the overdue approval of the Jackdaw field in the North Sea, here comes a reminder that Britain still imports almost 60% of its gas and the stuff has to come from somewhere. We’re now doing a deal with Belgium to ensure enough supply can flow through a connecting pipeline this winter should a “low-probability but high-impact stress event”, to quote the regulatory mouthful, occur. To be fair, the arrangement to maintain capacity from Belgium is a belt-and-braces measure.
The imagined events do sound genuinely stressful and may never happen. A critical piece of infrastructure, such as the two import terminals in Milford Haven to bring in liquefied natural gas (LNG) into Britain, would have to be out of action during a prolonged cold snap in which demand is very high. Equally, though, the “high-impact” bit matters: we’re talking about having enough supplies to run gas-fired power stations at full pelt if necessary to keep the lights on.
In short, 10p a month will be added to bills to cover the cost of paying Interconnector Limited, the Belgian owner of the pipeline, to maintain the compressors needed to shove big volumes of gas to Britain in a hurry if required. Without the arrangement, the company had already warned it would cut capacity, in part because the big pipe was not used much in practice last year. The first conclusion – the comforting one – is that the deal sounds like decent value for money.
As insurance policies go, £1.19 a household a year is not much. The second, however, is that risks to Britain’s gas security are plainly mounting. The Ofgem document describing the Belgian deal says it was “the only currently available intervention identified that both addresses the immediate security of supply position for winter 2026/27 and provides continuing security of supply benefits over the following four years”.
It was Belgium, plus any future deal on the Dutch pipeline, or nothing. Nor is the Belgian shuffle a cure-all. The government should take that line as a heavy hint to get a move on.
Do we need more gas storage, more LNG terminals, or both? And post-Jackdaw, what’s a realistic appraisal of how much will be sourced from the North Sea? It is now almost a year since an alarming report from the National Energy System Operator (Neso) warned of an “emerging risk to gas supply security” in 2030.
Extract — continue reading at the source.
