This briefing paper offers a comprehensive review of UK Gas Security, integrating the work of sixteen researchers from across UKERC and the Oxford Institute for Energy Studies.
This briefing paper offers an up-to-date review of UK gas security. The authors’ approach is distinguished on three counts.
First, this is a major interdisciplinary undertaking, integrating the work of sixteen researchers from across UKERC and the Oxford Institute for Energy Studies.
Second, this wide-ranging expertise allows the paper to take a truly ‘whole systems’ perspective, looking in depth at each segment of the UK gas supply chain: upstream supply, midstream infrastructure, and downstream demand.
Third, the authors centre the transition to net zero, and the concomitant decline of the UK’s gas system, in our analysis. The paper then explores the new issues, opportunities and challenges which this raises for UK gas security.
Key takeaways
- Gas production on the North Sea will fall faster than UK demand for gas. Imports will therefore make up a progressively greater share of UK gas consumption. Falling gas production across the UK’s continental neighbours means that it is Liquefied Natural Gas (LNG) that will fill this gap. Global LNG export capacity is set to increase by 60% through to 2030, but the dangers of the UK’s reliance on market prices to attract spot LNG cargoes were painfully exposed in 2022-2023.
- This gives the UK every reason to expedite gas demand reduction and make good on net zero. But this will not be easy. Under-funding of the Boiler Upgrade Scheme saw just 19,000 heat pumps installed in the year and half to 2023, the UK’s ratio of gas-to-electricity prices is currently a prohibitive 1:4, and the Climate Change Committee have warned that at current renewable build rates the UK will have to turn to blue hydrogen to provide system flexibility to the grid. Bold, corrective action is therefore necessary.
- At the same time, the accelerated phase-out of gas required on security of supply grounds could, if poorly managed, bring forward security of demand risks. Falling gas throughput will jeopardise the commercial and technical viability of midstream infrastructure – gas pipelines, interconnectors, and storage facilities – on which the UK will continue to rely on the medium-term. In the case of the gas pipeline network, for example, falling customer numbers, an investment repayment timetable misaligned with net zero, decommissioning costs that could exceed £50bn, and fragmented private ownership, together pose major risks to the network’s orderly phaseout.
- Gas demand reduction in the transition to net zero is now the defining subject of UK gas security, both as a solution to supply-side insecurity, and as a source of risk in its own right. This requires a major reorientation of perspective and strategy.
