If domestic customers have to be cut off, suppliers caught short will pay them £14/therm. That figure, which equates to £30 a household for an average winter’s day, was reduced from £20/therm in response to shippers concerns. Cash-out payments will no longer be frozen in emergencies.
Ofgem is also consulting on a demand side response (DSR) tender in which large industrial customers may be paid to accept interruptions to their supply in an emergency.
“Although Britain has never had a serious gas supply shortage and the risk of it happening is low, we still need to stronger incentives to secure gas supplies,” said a spokesman for Ofgem. “Our gas security of supply report to Government last year showed that we will be increasingly reliant on gas imports.”
Ofgem is to publish high-level principles of the DSR tender and consult on updated licence conditions for cash-out in early 2014. The aim is to implement reforms by winter 2015/16.