Another hard winter?
The UK energy regulator, Ofgem, is apparently assessing whether next winter is likely to see tightness in gas supplies in Britain, as it did last winter. We saw the impact of this on gas prices, and on requirements that companies limit their gas usage in favour of householders. See the report in the FT:
Steve Smith, Ofgem’s director of markets, has been visiting gas supply companies in Europe to ask about the availability of gas for the winter. Ofgem was dismayed last year when, despite higher wholesale prices in the UK, gas companies on the Continent did not send significant amounts of fuel through the interconnector. The regulator has said this is a sign that European energy markets have not yet opened up and asked the European Union to investigate.
“We are sending Steve to see companies across Europe and hear first hand what their assessment is,” said Ofgem. These findings will be passed on to National Grid to be included in its regular forecasts on winter gas supplies, published in July and September.
Ofgem said it was trying to pass on as much information about gas supplies as possible to the market in an effort to avoid the atmosphere of panic that made wholesale gas prices much more volatile last winter. “That will help the market prepare in an orderly way. Markets work best when they have good information. We are asking European companies to be similarly transparent.”