UK gas shortage: What might happen if National Grid reserves run out during freezing temperatures?

(Getty)

Cold weather across the country is leading large parts of it to grind to a halt.

That includes what some might say is the most important thing during a cold snap like this: the gas that powers the heating that keeps us warm. The National Grid has warned that it is in danger of running out of gas, and needs the market to step up and provide more.

The problems are having an impact on some of the most important parts of our infrastructure. Not only are roads and train networks going down, and the National Grid has been hit by those issues too.

Here’s the chances that will happen, and why it was actually able to happen in the first place.

1. Is the National Grid going to run out of gas?

   Perhaps. But that's not strictly what the National Grid's statement means: the Gas Deficit Warning is a request to the market to provide more, and not exactly a message that supplies are running low, though they obviously go hand in hand.

   How much of a problem that is depends on how the market responds. The National Grid has said that it will be "tight", and is making plans accordingly, but we don't know yet that we're actually going to run out.

   “National gas demand today is high and due to the extreme weather conditions, there have been gas supply losses overnight," it said in a statement. "At 5.45am this morning we issued a ‘Gas Deficit Warning’ to the market. This is an indication to the market that we’d like more gas to be made available to ensure the safe and reliable operation of the national gas network.

   “We are in communication with industry partners and are closely monitoring the situation.”

2. What would happen if we ran out?

   It's not clear, exactly. This is an incredibly rare situation and one that the National Grid always tries to avoid.

   What is clear, though, is that it is very unlikely indeed that domestic customers will be affected; the warning doesn't mean that your heating is about to shut down and people will be stuck in the cold. Consumers are the last people to be hit by such problems, by design, and it will be businesses that are left bearing the brunt of our lack of gas.

   The National Grid did ask for responses from the "demand side" – or industrial customers, which it has asked to use less gas. If anyone does have to suffer through a deficit, it will be those companies, but they also have more readiness and systems built for such shocks when they do happen.

   Such a warning has happened before, in 2010. But there was no great problem, and the country managed to move on.

   What's more, the National Grid issues similar warnings over electricity fairly often. And the market usually provides the energy it needs.

3. How did this happen?

   In short, and perhaps a little surprisingly, the problems haven't been caused by demand. The cold weather is the culprit, but because it is freezing up the usual delivery mechanisms and there isn't enough gas to go around, not necessarily because the freezing temperatures are leading more people to have their heating on.

   But, more broadly, the reasons that we managed not to have enough gas are big and wide-ranging. Analysts suggest it is the consequence of a whole set of factors, some of which should have been protected against already.

   “Behind today’s gas deficit warning is a ‘perfect storm’ of unrelated short-term issues – freezing conditions, diminished Dutch gas production due to earthquake concerns, weather-related issues curbing imports from Europe, and a global LNG market in which supplies are being pulled to Asia by higher prices," said Jonathan Marshall, energy analyst at the Energy and Climate Intelligence Unit.

   “But underlying it is another set of issues that speak to a failure by successive Governments to map out a secure gas future in the way that they have done so successfully for electricity.

   “Allowing Centrica to close the UK’s only big long-term gas store without consideration for supply during cold snaps, failing to develop a coherent plan for low-carbon heating, and above all a head-in-the-sand approach to improving energy efficiency in homes have all put households and businesses at risk of shortages and price spikes.

   “The UK is largely isolated in its dependency on gas, with a huge over-reliance in the power and heating sectors. Experts have long warned about putting too many eggs in the same basket, with events such as today the undesirable outcome.

   “The gas crunch, plus today’s report showing plummeting investment in warm homes, shows there’s an urgent need for Greg Clark and Sajid Javid to work out jointly exactly what they’re going to do about Britain’s cold, energy-wasteful housing stock – because doing nothing clearly isn’t an option.”