Winter gas supply looks 'comfortable' says Ofgem

6 September 2006
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07 September 2006 | Paul Snell

The government has sought to reassure energy buyers following national media reports of "soaring gas prices" and "winter gas shortages".

The Reuters report at the end of August, which was picked up by other outlets, contained comments from energy minister Malcolm Wicks, who said: "It's not going to be the easiest of winters and we need to manage this with care and make sure we get it right."

He said the UK winter gas supply market was "looking the same as the past two years" and that supplies would remain tight.

In an interview with the Financial Times the following day, Sir John Mogg, chairman of energy regulator Ofgem, made comments seemingly at odds with the minister.

He said gas supplies would be "less tight" this winter, as a result of new pipelines and improvements to existing infrastructure.

"We feel much more confident that the UK's gas supplies will be at a comfortable level."

The Department of Trade and Industry told SM that the measurement of "tightness" was not a precise science, and there was not a huge difference between Wicks' appraisal and that of Sir John.

Energy consultant Chris Lewis said he agreed on the whole with Ofgem's assessment of the market.

"No one can forecast what the weather will be like and supply is partly weather-related," he said. "But Ofgem is providing confident signs that the market [improved infrastructure] is going ahead and looks to be on line. The view is upbeat and the long-range forecast is slightly better than average."

However, Ofgem reminded buyers that they should not be complacent about the winter market. A spokesman for the regulator said: "We need to make sure that gas is moving through the pipelines at full capacity to make a difference."

  • The CIPS energy committee has said that the Utilities Intermediaries Association code of conduct (see **News, 20 July**) does not solve the problem of mistrust between buyers and consultants. (**see Letters**)

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