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UPDATE 2-UK can meet winter energy demand if Brexit happens - National Grid
(Adds more detail, context on LNG market)
By Nina Chestney
LONDON, Oct 10 (Reuters) - Britain will be able to meet energy demand this winter even if it leaves the European Union, but could need regular supplies of liquefied natural gas, National Grid said on Thursday.
The United Kingdom is due to leave the EU on Oct. 31 but it is still unclear on what terms it will exit or indeed whether it will become the first sovereign state to depart the bloc.
National Grid, which operates the UK power network, expects Britain's power links with Europe, called interconnectors, to continue to flow but in the unlikely event they fall to zero there is sufficient surplus power to meet demand.
National Grid has been under scrutiny after a power outage in August affected 1.1 million electricity customers in Britain.
"We anticipate no additional adequacy or operability challenges for the coming winter as a result of the UK’s planned exit from the EU," the grid operator said in its 2019/20 winter outlook report.
"Our analysis shows ... margins that are sufficient even in a scenario with no interconnector flows between the UK and continental Europe. However, the market would need to attract regular LNG supplies to the UK," it added.
Liquefied natural gas imports into Britain quadrupled during the winter of 2018/19 to 6.6 million tonnes and peaked at 1.6 million tonnes in April, a multi-year high, as supplies from the United States and Russia inundated Europe and depressed prices.
As global LNG production currently outstrips demand, National Grid said it expects to see high levels of LNG supply to Britain this winter, similar to last winter.
But high LNG flows into Europe correlate with weak demand in Asia, where top LNG buyers Japan, China and South Korea are much more dependent on the liquid gas. Should there be an unusually cold winter there, fewer cargoes are expected in Europe.
National Grid expects this winter's gas demand to be slightly higher than last winter at 52.3 billion cubic metres due to higher exports to Ireland and Europe.
Peak gas demand could be as high as 499 million cubic metres a day, greater than the highest recorded demand.
Some 23.5% of total gas demand will be for generating electricity.
The so-called de-rated margin, or surplus power margin, is forecast at 7.8 gigawatts (GW), 0.7 GW more than the forecast margin of winter 2018/19.
Peak electricity demand is expected in the first half of December and the operational surplus is also forecast to be at its lowest at this time.
However, the grid operator expects enough generation and interconnector imports to meet demand throughout the winter, it said.
(Reporting by Nina Chestney; additional reporting by Sabina Zawadzki; Editing by Dale Hudson and Toby Chopra)
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