UK energy networks say power imports set to rise

The operators of the United Kingdom's electricity and gas networks filed winter outlook reports on Tuesday that indicate there will be an increase in power imports and domestic production compared to the previous year, along with substantial gas storage levels across Europe.

Designed to assist businesses and government bodies in their preparations, the National Energy System Operator, or NESO, and National Gas Systems Operator, or NGSO, release the yearly reports detailing the supply and demand outlook for the approaching winter season.

NESO reports an increase in expected excess electricity capacity for the winter of 2024/25, with the current estimate at 5.2 gigawatts, which is 8.8 percent above peak demand, up from 4.4 gigawatts, or 7.4 percent, last winter.

Despite the closure of the UK's last coal-fired power plant last month, NESO indicated an improved electricity margin, due to increased interconnection with Europe, including a new 1.4 GW power link with Denmark, along with expanded generation and battery capacity, reported Reuters news agency.

"It is positive to see that (electricity) margins forecast for this winter are the highest since 2019/20," said Craig Dyke, director of system operations at NESO.

While wholesale energy costs have stabilized since the 2022 price surge triggered by the Russia-Ukraine conflict, NESO cautions that geopolitical events still pose a potential risk to market stability.

"While the overall energy system is showing greater resilience, disruptions in global energy markets remain a possibility," the report said.

NESO expects this winter's peak electricity consumption to reach 44.4 gigawatts, which is comparable to the 44.9 gigawatts peak observed during the previous winter season.

National Gas, or NGSO, reported it expects sufficient supplies for the UK's winter needs, with gas fueling a third of electricity production and heating 75 percent of homes.

The positive outlook stems from solid Norwegian supply, liquefied natural gas imports, and nearly full European storage sites, though the agency noted it is monitoring escalating Middle East tensions.

"Factors beyond our control, such as the weather, global market developments, and the wholesale cost of gas will all influence the gas supply and demand situation in Great Britain," said Ian Radley, NGSO director.

NESO is a new entity launched on Oct 1 as an independent system planner and operator, replacing the former National Grid ESO, which aims to accelerate the country's energy transition through a "whole system" approach.

While under government ownership, NESO is intended to function with operational independence, including from the energy industry itself, and will have strategic oversight of the UK's energy system for both gas and electricity.

One of NESO's first tasks includes advising the government on clean-energy targets, following a request from the Secretary of State for Energy Security and Net Zero Ed Miliband and from Chris Stark, the government's head of mission control for clean power 2030, to identify "a range of pathways" for meeting renewable energy goals.