Key facts
- Britain faces some of Europe's highest winter energy costs.
- National Energy System Operator expects surplus electricity output of 5.5 GW.
- Supply and demand situation is most vulnerable to unforeseen events in January.
- UK front-month gas and electricity prices are up 180% and 120% respectively since February.
- UK gas production is forecast to fall by 6% this year.
- Europe's gas stores are at their lowest level in 13 years.
Britain is bracing for some of the highest energy costs in Europe this winter as its reliance on imports is expected to increase. The National Energy System Operator has assured that supply will be sufficient, partly due to higher market prices paid for imports. National Gas secured an eleventh-hour deal to maintain gas flow via a major Belgian pipeline, which Ofgem approved, adding approximately 10p per month to average gas bills. Without this intervention, there was a risk of gas shortages during extreme cold snaps and network failures. LNG imports are projected to rise by about 5% from last winter. Elevated prices are anticipated if UK buyers compete more intensely for LNG cargoes amid low gas storage levels across Europe, which are at a 13-year low. UK gas production is forecast to decline by 6% this year, though the newly approved Jackdaw gasfield is expected to provide a modest supply boost next month. Electricity imports are also expected to be more costly due to tighter European power supplies, impacted by reduced French nuclear output and Norwegian hydroelectric reserves following summer heatwaves.