Wholesale gas prices hit a 12-year high as freezing weather causes havoc
Britain running out of gas as cold snap grips country
Fears are mounting that Britain could run out of gas as the freezing weather gripping much of northern Europe stretches supplies.
National Grid, the operator of the UK’s gas pipeline network, issued a gas deficit warning on Thursday as lower-than-expected supply meets with heightened demand caused by the extreme weather conditions.
According to its forecasts, Britain’s gas supplies fell more than 50 million cubic metres short of demand anticipated on Thursday.
While it is unlikely that supply to households will be affected, the grid offered to pay industrial users to cut down on their consumption.
It added: "We are in communication with industry partners and are closely monitoring the situation."
Wholesale gas prices for same-day delivery soared to a 12-year high on Wednesday, hitting 200p per therm, although they have since edged lower.
A cold snap dubbed the ‘Beast from the East’ is moving northward across Britain bringing forecasts for heavy snowfall throughout the country.
Red weather warnings - meaning a potential risk to life - are in place for parts of Scotland and southwest England.
Temperatures fell to minus 12 degrees Celsius in some rural areas while the Met Office warned of up to 40 cm of snow in parts of Scotland and Ireland.
“Snowfall will be accompanied by strong to gale easterly winds, perhaps severe gales in places, leading to drifting of lying snow especially in upland areas,” the Met Office said on its website. “Severe cold and wind chill will compound the dangerous conditions.”
As much as 80 per cent of Britain uses natural gas for home heating, meaning cold temperatures can have a big impact on demand. National Grid data showed that demand on Wednesday was almost a third higher than seasonal norms, as households cranked up their heating.
Supply problems have further exacerbated the situation. There have been unplanned outages at two gas facilities in Norway, the UK’s biggest supplier, curbing gas flows to a market heavily dependent on imports. Earlier on Thursday, an outage at the South Hook liquefied natural gas terminal also reduced flows to the grid. The last time an LNG tanker delivered a cargo to Britain was more than a week ago and more supplies are badly needed to keep prices in check.
The closure last year of Centrica's Rough, the UK’s largest gas storage site, has also hampered the country’s ability to respond to short-term demand shocks. Rough had accounted for more than 70 per cent of Britain’s gas storage.
Commuters across the country were facing another day of disruption on Thursday as dozens of train stations were closed and flights cancelled amid heavy snowfall.
The cold weather is forecast to continue into the middle of March as Siberian air flows into Europe, according to meteorologists at Accuweather.