Photographer: Chris Ratcliffe/Bloomberg

U.K. Grid Cuts Risk of Winter Blackouts as Supply Buffer Widens

  • Extra coal unit increases margin for winter supplies
  • Gas supply forecast to be ample despite storage issues

The U.K.’s network manager increased its estimate for electricity supply margins this winter after a coal unit indicated it would be available following the last estimate in July.

Operator National Grid Plc expects the buffer of extra electricity available this winter compared with peak demand to be 6.6 percent from a provisional estimate of 5.5 percent in July. Prague, Czech Republic-based utility Energeticky a Prumyslovy Holding AS said on Aug. 1 that its 500-megawatt unit 4 at the Eggborough coal station in northern England would be available in the wholesale market from September, boosting available supply.

“We expect there to be sufficient generation and interconnector imports to meet demand throughout winter 2016/17,” National Grid said in the report.

National Grid’s margin estimates include supply from 10 power stations contracted to provide backup electricity that start in November. Supply has been scarce without this reserve, producing record price jumps last month when supply from wind generation dropped.

The capacity of renewable electricity in Britain increased to 32.5 gigawatts at the end of June, 14 percent more than the same period last year, according to government figures. The higher level of renewable output has seen “much tighter supply margins” during evening periods in September when wind levels were low, according to Enappsys Ltd., an energy trading consultant in Yarm, England.

Gas Demand

Demand for gas is forecast to be less than last winter because of lower exports to Ireland, which started production at its Corrib field, as well as to mainland Europe. Gas-fired generation is forecast to increase, bolstering consumption, National Grid said.

Britain will have sufficient supplies to meet demand, National Grid said. Even with less gas at the nation’s biggest storage facility, Rough, and potential lower imports from the Netherlands, domestically produced fuel and flows from Norway, Belgium and liquefied natural gas import terminals will make up for any shortfall.

Rough, which accounts for more than 70 percent of Britain’s gas storage capacity, will partially re-open for withdrawals of the fuel after Nov. 1, according to storage operator Centrica Plc. The market remains uncertain about the restart, which supported U.K. gas prices, the grid said. The facility, which shut in June, will start winter with 1.3 billion cubic meters of gas compared with 2.8 billion cubic meters in October 2015, the grid said.

— With assistance by Jess Shankleman

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