Security of supply
Existing gas supply capacity is expected to be capable of meeting demand well into the future. The diverse nature of GB supplies means that GB is resilient to all but the most extreme circumstances. From day to day, the market generally promotes efficient balancing, even though within-day demand is becoming more variable.
Market access and liquidity
Our indicators suggest that the GB wholesale gas market remains a mature, liquid market with high levels of churn, narrow bid-offer spreads and a growing number of active participants. There is a diverse range of products and platforms available for those looking to trade gas in GB. Historically, the majority of trading has been conducted “over-the-counter” through brokers, but in recent years gas trading has shifted towards exchange platforms.
Competition
When assessed using a range of standard competition metrics, the GB market appears to be competitive and outperforms virtually all relevant European and US benchmarks. The evidence shows low levels of concentration, robust market entry and exit, and low levels of vertical integration.
Investment and sustainability
Market signals have incentivised significant investment in new import infrastructure in the past decade. Investment in seasonal storage has been muted, but this appears to be in line with market signals and the declining summer-winter spreads. On issues of governance and regulatory burden, there have been some encouraging trends, with the number of code modifications falling over time. However, the complexity of many of the new changes continues to pose a challenge. Lastly, from a sustainability perspective, demand has fallen in recent years. There are many likely causes of this, one of which is better energy efficiency.
