Gas Storage Below Target Amid Supply Challenges
- Professional Energy People
- 2 days ago
- 6 min read
UK Energy Market Update
April 2025
Market Summary
As of May 1st, EU gas storage facilities were 39.21% full—approximately 10% below the five-year seasonal average—following a modest recovery from 34.29% at the start of April. This shortfall has reignited concerns over meeting the 90% target ahead of winter. In response, EU nations are negotiating new rules to ease storage-filling obligations, including proposals to allow up to a 10-percentage-point deviation from the 90% target and extending the deadline for meeting the target to between October 1 and December 1. These adjustments aim to reduce price volatility, manage speculative pressures, and provide flexibility in the face of market disruptions, such as the loss of Russian gas flows via Ukraine.
In April, Norway began its summer maintenance on key gas infrastructure, causing significant but temporary supply reductions. Planned and unplanned outages at Nyhamna, Aasta Hansteen, Kollsnes, and Dvalin impacted flows, though overall summer exports are expected to rise due to a lighter maintenance schedule compared to previous years. Work also began at Hammerfest LNG, lasting until mid-July, with further cuts scheduled in May at Troll, Kårstø, and Ormen Lange.
Sweeping US tariffs—ranging from 10% to over 100%—triggered sharp reactions across global markets, pressuring European gas and electricity prices. Although energy commodities were not directly targeted, the tariffs stoked fears of a global economic slowdown, weighing on energy demand forecasts and pushing gas futures lower. European gas prices, including the TTF front-month contract, dropped sharply as expectations rose for weaker Asian demand and more LNG being redirected to Europe. The EU’s retaliatory measures and ongoing trade tensions further heightened uncertainty, dampening industrial demand forecasts. Overall, tariffs contributed to downward pressure on prices by signalling slower global growth and shifting LNG trade flows.
With some EU member states opposing sanctions on Russian gas, the European Commission is preparing a roadmap, due May 6, outlining alternative measures to reduce the bloc’s reliance on Russian energy. These may include trade tools to block new contracts for Russian liquefied natural gas (LNG) and legal mechanisms allowing companies to exit existing contracts without penalties. Despite a drop in Russian pipeline deliveries since 2022, the EU still sourced 19% of its gas and LNG from Russia in 2024, primarily through LNG. The Commission aims to ensure any actions harm Moscow more than the EU and will consult member states and companies before proposing legislation, which would require broader EU approval.
Spain and Portugal experienced one of Europe's largest power outages ever after a sudden failure at a key France-Spain grid interconnection, causing Spain to lose 15 GW of power—about 60% of its national demand—within seconds. The outage, linked to failures in solar power systems and nuclear reactors, disrupted grid stability and was fully restored within days. The incident has raised concerns about managing renewable energy integration and the need for better grid storage and upgrades. In response, the UK government is reviewing its own grid resilience to similar blackout risks, with Home Secretary Yvette Cooper stating that the UK is examining how to handle various energy challenges and threats in light of the Iberian Peninsula’s recent outage.
Net Zero News
A new report from the Climate Change Committee (CCC) warns that the nation is critically unprepared for the rapidly escalating effects of climate change, pointing to increasing threats to public safety, infrastructure, food security, and the economy.
Britain is poised to unlock billions in clean energy investment as Ofgem introduces the first new support scheme for long-duration electricity storage (LDES) in four decades. The initiative is designed to reduce renewable energy waste, enhance grid stability, and speed up the transition to net zero.
A new collaboration between E.ON UK and Sheffield stainless steel producer Marcegaglia will harness waste heat from the city’s industrial operations to provide low-carbon heating for local homes and businesses. This initiative reinforces Sheffield’s position as a leader in sustainable heating and aligns with the government’s heat network zoning strategy.
Ofgem has approved sweeping reforms to streamline the UK’s electricity grid connection process, giving priority to clean energy projects that are ready to deliver power. The changes will clear out inactive “zombie” projects from the queue, making way for the timely connection of the most critical renewable energy developments.
Many energy-saving opportunities go unrealized due to limited expertise, entrenched interests, or outdated thinking. Energy efficiency isn’t a one-off initiative—it’s a continuous effort vital for sustaining profitability and achieving carbon reduction goals. The potential for both technical and behavioural energy savings is enormous—some estimates suggest as much as 80%. While a comprehensive energy audit is an excellent first step, here are ten practical, cost-effective measures to consider from JRP Solutions, specialist consultants in energy and sustainability.
National Grid Electricity System Operator (NESO) has released its 2025 Summer Outlook, forecasting record-low electricity demand on Great Britain’s transmission network, potentially dropping below 13.4GW. This projection comes on the heels of a surge in solar power generation, which set a new record of 12.68GW this spring—surpassing the UK’s total import capacity from European interconnectors.
In the face of climate change, cyber threats, and surging electricity demand, the world must fundamentally rethink its approach to energy security. That was the shared message from global leaders at April’s energy security summit, co-hosted by the International Energy Agency (IEA) and the UK Government.
The blackout across Spain and Portugal has reignited concerns over the stability of Europe’s outer power grids, as the continent accelerates its shift to renewable energy.
Electricity & Gas Prices
Gas and power prices have been highly volatile this month, driven by stalled Russia-Ukraine peace talks and ongoing uncertainty over the return of Russian gas supplies. Concerns about refilling EU gas storage remain, especially with slightly cooler temperatures across Europe in mid to late April. At the same time, President Trump’s reciprocal tariffs of at least 10% on most imported goods (excluding energy) have put additional pressure on prices, with markets watching their impact closely. Early April saw significant declines in gas prices, which improved Europe’s storage outlook by encouraging earlier-than-usual injections ahead of winter, thanks to reduced costs.
Flexible Purchasing
EPEX Price
Some of our flexible purchasing customers are buying on EPEX, a European auction for power. Because they auction every hour of each day, customers get the “market average” price as opposed to a fixed-term contract over e.g. a 12-month period. Being on this product means that you will pay the average of each day for the month and once the market falls the price will follow.
The EPEX price finished the month with an average of 7.87 p/kWh (commodity). With the non-commodity added to this, the overall rate will be around 18.77 p/kWh+.
Carbon Prices
April’s European Union Allowance (EUA) prices averaged €64.26 per tonne, down 6.29% from March. The carbon market continued its downward trajectory, influenced by both market fundamentals and external policy factors.
Lower industrial activity in the region, along with increased renewable energy supply and milder weather, reduced demand for carbon allowances. On the policy side, France renewed its call for a carbon price corridor, while early announcements of reciprocal tariffs by the US triggered volatility in global markets, heightening risk sentiment.
Oil Market
3rd - Brent crude oil prices dropped around 3% today following the announcement of Trump’s tariffs. Investors are primarily concerned about market uncertainty, which is heightened by the risk of a global trade war. However, oil, gas, and refined product imports have reportedly been excluded from the tariffs.
10th - Oil prices fell nearly 3%, as concerns over a deepening U.S.-China trade war and a potential recession outweighed initial relief from President Donald Trump's announced 90-day delay on broad tariffs for most countries.
17th - Oil prices climbed, hovering near a two-week high, driven by supply concerns following new U.S. sanctions aimed at restricting Iranian oil exports.
24th - Oil prices rebounded slightly after a nearly 2% drop in the previous session, as investors weighed the possibility of an OPEC+ production hike against mixed tariff signals from the White House and ongoing U.S.-Iran nuclear negotiations.
28th - Oil prices held steady as investors weighed uncertainty surrounding U.S.-China trade talks, which is clouding the outlook for global growth and fuel demand, alongside the potential for an OPEC+ supply increase.
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