Report overview

Natural gas plays a critical role in the UK’s energy system, providing twice as much energy as electricity, thus the secure and affordable supply of natural gas is an essential element of UK energy security and a key objective of Government policy. The starting proposition for this report is that Brexit is coming at a time when there are already major challenges to the UK’s future gas security.

This report has three objectives:

  • To identify the key challenges facing the UK’s natural gas market;
  • To understand the role that EU policies and institutions currently play in the operations of the UK’s natural gas market; and,
  • To identify the potential impact of Brexit and the key issues that should be addressed in a post-Brexit ‘UK Gas Security Strategy.’

Today natural gas is the most important source of energy for the UK, but future gas security could be challenged by the medium-term prospect of increasing import dependence, due to declining domestic production, and the longer-term prospect of falling demand due to climate change policy. This creates a degree of uncertainty that makes it difficult to justify investments in the supply chain to maintain existing capacity, let alone deliver new sources of flexibility.

Brexit only serves to exaggerate the level of uncertainty. Gas will continue to flow post-Brexit, but consumers may have to pay more for it to guarantee security. Longer term, it is not the outcome of Brexit that poses a threat to UK gas security, but the failure of the Government to provide a clear roadmap for the role of gas in the low carbon transition.