Analysts have played down concerns that the UK is facing an energy crisis this winter, following an electricity supply warning posted yesterday by National Grid, the UK gas and electricity transmitter. National Grid called for power producers to supply an extra 300 megawatts (MW) of electricity, prompting reports the UK could face an energy supply shortage this winter. The ‘transmission system warning’ comes as Norwegian gas supplies along the Langeled and Vesterled pipelines have decreased after high flows during the summer. There is also concern at the delay to the completion of two liquefied natural gas (LNG) terminals in Milford Haven in south Wales, one of which was expected to be online this winter.High UK wholesale gas prices are currently being traded for the winter months. Despite this, analysts say the UK is not in the short term facing an energy supply crisis. James Ball, president of industry consultancy Gas Strategies Group, said the delay to the two import terminals at Milford Haven will have little effect. ‘Neither the Isle of Grain or Teesside [import terminals] are full, so the delays at Milford Haven make little difference.’ The amount of LNG coming in to the UK depends on price differentials. Because LNG is carried by ship, producers in the Middle East and elsewhere can follow the high-priced markets, which at the moment are Japan and Korea. But Ball said that LNG prices in the UK could soon match the prices in Japan and Korea, thereby enticing more gas into the UK. Ball said the decreasing pipeline flows through Norway is most likely a ‘temporary phenomenon’ and gas will come in greater quantities once the UK price moves up. Even so, analysts are not expecting residential gas prices to rise like during the winter of 2005-06 when the UK’s biggest gas store was shut down after a fire. ‘There will not be serious problems with supply in the short term,’ said Jon Dunningham, an analyst at Seymour Pierce. The gas prices this winter will not reach the level of two years ago. A spokesman for UK watchdog Energywatch said that he did not expect residential gas prices to rise this winter. ‘All the problems envisaged in terms of supply have been remedied. We dont see any need for upward pressure on prices. Wholesale prices have stabilised in the last 18 months. A National Grid spokesman said: ‘The transmission system warning does not mean there is not enough demand. We issue several a year to ensure that we have a safety cushion of spare capacity. It does not say anything about security of supply problems. It is a routine part of the market.

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