The Gas Deficit Warnings issued by National Grid to flag the risk of a shortfall emerging on the gas transmission network have been renamed as Gas Balancing Notifications.
The change has been introduced through a modification to the Uniform Network Code (UNC), which was approved by Ofgem last week. The regulator said the new term better reflects the situation it seeks to describe and will aid the efficient operation of the gas system.
Gas Deficit Warnings were introduced alongside Margins Notices in 2012 to replace Gas Balancing Alerts. The first ever Gas Deficit Warning was issued in March 2018 during the infamous ‘Beast from the East’ storm, prompting some news outlets to report that the UK was “running out of gas”.
National Grid said the warning was “taken out of context by some market observers” and that this reporting “fuelled a sense of panic in the market that was unwarranted, potentially resulting in higher within-day gas prices”.
In response, the company proposed the modification UNC685, which sought to rename Gas Deficit Warnings as Gas Balancing Notifications. It said the use of a more neutral term would “reduce the risk of exaggerated reporting… thereby avoiding a public perception of crisis” and prevent the occurrence of artificial spikes in gas prices.
The UNC panel agreed, as did Ofgem, which noted that a Gas Deficit Warning “does not necessarily mean there is insufficient gas available, and that the declaration of a Gas Deficit Emergency is imminent.”
“By clarifying the market message, it is our view that this should result in more efficient operation of the pipe-line system,” it added.
In September 2016, Ofgem approved a modification to the Grid Code, which replaced the term Notice of Inadequate System Margin with Electricity Margin Notice, again due concerns over its interpretation.