Verdict on Iran war threat to UK power supplies

Electricity supplies will "remain secure" during the coming UK winter despite challenges posed to energy supplies due to the Iran war, the National Energy System Operator (NESO) has announced.

In an early report covering the expected balance between supply and demand, the public-owned body said it expected excess capacity above peak electricity demand at 5.5 gigawatts (GW).

In more simple language, the forecast excess capacity is equivalent to 8.8% of expected peak demand during an average cold spell. It's in line with recent winters.

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The country typically relies on natural gas for just under a third of its power provision, with its use in the UK's energy mix often higher in the winter months especially when there is little or no wind.

The government has been investing heavily in wind power and solar as part of its net zero commitments but acknowledges that gas will remain critical to securing power supplies for many years to come.

Natural gas costs have proved volatile since 2022 and were the key component of the cost of living crisis that followed Russia's war with Ukraine.

This year, gas prices have been on the rise again due to the US-Iran war.

The conflict's spread across large parts of the oil and gas-rich Middle East has disrupted the key Strait of Hormuz shipping route, which normally accounts for a fifth of global supplies.

The surge in wholesale gas costs are set to hit UK households for the first time from July when the next change in the adjustable energy price cap takes effect.

It will see average annual bills rise by 13%.

Progress in peace talks has helped wartime prices come down from peaks seen in April but the fate of the strait remains unresolved with only a trickle of usual oil and liquefied natural gas (LNG) volumes currently getting through.

As things stand, UK natural gas costs remain 35% higher in the year to date.

The prospects for bills over the winter will depend very much on the status of peace efforts.

When it comes to gas supply, just 1% of the UK's needs traditionally comes from the biggest producer, Qatar.

The problem, however, is that everyone else affected by the loss of that energy is having to buy it elsewhere, creating a squeeze across the rest of the market still reeling from the loss of Russian supply four years ago in punishment for its activities in Ukraine.

The UK gets the majority of its gas from Norway.

NESO said of its power provision findings: "The outlook reflects detailed and robust modelling of the operational surplus for every day of the winter period. It is based on running 30,000 scenarios, for each day, which stress-tests a range of weather conditions, electricity demand, wind output and other generator availability.

"This initial assessment comes against a backdrop of continued disruption in global energy markets. Despite this uncertainty, electricity reserves are expected to be higher than during the 2022 energy crisis, when the system operated securely with smaller margins.

"This provides confidence that households and businesses can rely on a secure electricity supply throughout the winter, even during periods of high demand."

"While we will continue to monitor global energy markets, households and businesses can be confident that electricity supplies remain secure," added Deborah Petterson, NESO's director of whole energy system resilience.

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Dhara Vyas, chief executive of the industry group Energy UK, responded: "Our exposure to volatile international fossil fuel markets is driving up costs for households and businesses across the country.

"The impact of conflict in the Gulf demonstrates the clear correlation between global events and higher energy bills, and the importance of access to clean, British power sources with stable prices.

"Whilst there is a growing awareness of the way that the energy system works, there remain misperceptions about how clean power interacts with our energy security and resilience. The UK's energy system is more secure and more resilient than it was when we last saw gas prices spike in 2022, thanks in part to more batteries, wind and solar.

"The only route to ensuring our energy security and long-term protection from price volatility is to continue to replace old infrastructure with modern clean alternatives, including electrifying our heating and transport. This will not only secure our future electricity needs, but crucially protects us from international price spikes too."

(c) Sky News 2026: Verdict on Iran war threat to UK power supplies