There is a "significant" risk of shortages in gas supply in the UK this winter, its energy regulator has warned, raising the prospect of power outages in the coming months.
"Due to the war in Ukraine and gas shortages in Europe, there is a significant risk that gas shortages could occur during the winter 2022-23 in Great Britain. As a result, there is a possibility that Great Britain could enter into a gas supply emergency," the UK's energy regulator Ofgem said in a letter sent to energy firm SSE as carried by the BBC.
SSE, which has four gas-fired power plants in the UK, wanted to know from the regulator if it would face fines in case it cannot provide the electricity in circumstances beyond its control.
If a gas supply emergency situation occurs in the UK, gas supply to large industrial users, including gas-fired power stations, could be limited.
The penalties energy firms would pay for failing to supply electricity "could result in potential insolvency of gas-fired generators if a gas supply emergency occurs," the UK regulator said in its letter to SSE.
Ofgem will look into the issue with the penalties as a top priority because current rules on those fines would have a "significant impact on the safety and security of the electricity system."
Last month, consultants Lane, Clark & Peacock said that the UK could still face energy shortages this winter despite keeping more coal-fired plants available for reserve capacity.
Uniper will keep a unit at a coal plant in the UK available until the end of March 2023, six months after the original date for closing the unit which was last month. This extension is driven by the need to boost the UK energy supply through what will be a difficult winter.
The EU is also bracing for tight energy supply this winter.
Germany is currently in an "extremely tense situation" in terms of energy supply, Economy Minister Robert Habeck said on Friday, adding that Europe's biggest economy still risks running out of gas this winter.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More