The government will tell the Future Systems Operator (FSO) to use seven-day cold snaps as its basis for assessing whether the UK has sufficient gas supplies to meet peak demand, under new proposals.
The timeframe is contained in a paper, published by the Department for Energy Security and Net Zero (DESNZ), which outlines a proposed a new methodology for assessing gas supply security by the soon to be established FSO.
The new assessment is designed to supplement the Winter and Summer Outlooks, produced by National Gas Transmission (NGT).
These assess the capacity of the nation’s networks but based on the assumption that the market will deliver the necessary gas, they do not forecast supply.
However, as North Sea production declines and the UK becomes more dependent on imports, the government announced in March’s British Energy Security Strategy that the FSO should be take on responsibility for assessing gas supply security.
The paper proposes that a seven-day snap should be used as the peak demand scenario for assessing gas supply sources on the basis that this encompasses the ‘majority’ of prolonged cold weather periods since 1990.
Of the periods of cold snaps, when temperatures are zero or below, 90% were seven days or fewer, according to the paper.
The paper also considered using an 11-day cold snap, which is the longest since 1990, and 15-days.
The paper says the FSO will conduct its assessments annually, projecting supply and demand over five-and 10-year timeframes.
A decade provides a “credible window to consider investment opportunities in infrastructure”, says the report, giving as an example the up to nine years it can take to deliver gas stores in new underground salt caverns.
Five years has been proposed as a mid-point in order to allow the FSO to better consider depletion in UK production. The FSO will be able to use additional time-horizons if it considers them appropriate.
Each source of supply will be de-rated with expected maximum volumes assessed and adjusted based on its availability, reliability, and deliverability, alongside known future developments.
The methodology for assessing supplies will use a ‘merit order’ ranking from the least volatile, or ‘baseload’, supplies at the top to those that fluctuate most at the bottom.
Gas from the UK’s depleting Continental Shelf would have the highest merit order ranking because it is reckoned to be the most reliable form of supply into the transmission network, according to the paper.
Based on its assessments, the FSO will be responsible for proposing ‘necessary’ measures to protect against issues that might threaten the UK’s gas supply.
The new assessment methodology has been published alongside an update from DESNZ on the role that storage and other sources of flexibility can play in gas security.
It says there may be a need for additional flexibility from gas, via interconnectors, storage or imports of Liquified Natural Gas (LNG), to meet peaks in future energy demand when renewables are unavailable.
It says that government incentives, if deemed necessary, could be regulatory, financial or both.
The paper says that greater imports of LNG into geological storage could encourage more use of such terminals when demand is lower during the summer months, enabling them to be used more throughout the year rather than to meet short-term winter demand.
It also says the provision of large gas storage sites may reduce the need for further capacity increases at LNG terminals or interconnectors as the system will be better able to meet overall demand.
And existing LNG terminals could be repurposed to enable imports or exports of hydrogen, it says.
Ongoing work to expand of Grain and South Hook, two of the UK’s three LNG terminals, will increase total annual import capacity to 59bcm, it says, adding that this shows the market is responding to the UK’s demand for gas.
The paper says DESNZ will issue a call for evidence on gas market flexibility in the ‘coming’ months.