UK to Launch Investigation Into Long-Term Gas Supply
UK government-run energy regulator Ofgem has been ordered an investigative report into medium- to long-term gas supplies in the UK, to decide whether any action is required by the government to ensure consistent gas supply.
Ofgem (Office of Gas and Electricity Markets) was tasked with the report by the Department of Energy and Climate Change (DECC) and will present the results of the investigation by May of next year.
UK Energy Secretary Chris Huhne said the report was needed to assess the UK's prospects after 2030.
"As our old coal and nuclear power stations shut down, gas can provide flexible and reliable backup electricity to complement the next generation of renewable and nuclear energy," he said. "Our analysis shows that it is likely to remain significant beyond 2030, particularly with commercial carbon capture and storage.
“Energy security is at the heart of our energy policy but we should never be complacent, and that’s why I've asked Ofgem to look into whether further action is needed to ensure that medium to long-term gas supplies for consumers remain secure."
Ofgem say that the short-term energy supply and gas infrastructure in the UK is secure, but notes that there may be challenges in the medium- to long-term, particularly as domestic gas production continues to decline.
Ofgem says that over £10 billion has been invested into gas infrastructure in the past decade, but says that further investment will need to be found before 2020 to ensure supply security.
"In 2010 Ofgem’s Project Discovery identified a range of issues in both the gas and electricity markets given the need to find £200 billion of investment between now and 2020," Chief Executive of Ofgem Alistair Buchanan said.
"Project Discovery also identified the challenges posed by Britain’s growing exposure to a volatile global gas market. We have seen this recently where political instability in the Middle East and the impact of Fukushima have helped push up wholesale gas prices for this winter by 40 percent.
"We therefore welcome the Secretary of State’s decision to commission Ofgem to look at the rapidly changing gas supply situation for Britain and whether further measures are needed to secure supplies."