UK maximum summer power demand to be lowest ever-National Grid

LONDON (Reuters) - Electricity demand on Britain's grid is likely to peak at 37.5 gigawatts (GW) this summer, the lowest ever forecast, due to increased private use of solar installations, National Grid said on Thursday.

Solar photovoltaic (PV) capacity almost doubled to 4.4 GW by February this year, from 2.4 GW in February last year, National Grid said in its summer market outlook.

The grid operator is expecting this to increase further to 5.5 GW by February 2016.

The increasing number of buildings with solar panels means they can generate their own electricity and provide power for local networks, therefore reducing demand from the main grid.

National Grid said demand for gas in power generation is likely to be lower than last summer, as current fuel prices make it more profitable for utilities to burn more coal than natural gas.

The grid operator expects average daily gas demand from April to September to be 182 million cubic metres (mcm), below actual demand of 185 mcm/day in the same period last year.

Meanwhile, injections of gas into storage are likely to be higher than last year, even though capacity at Britain's biggest storage site Rough has been reduced.

Last month, operator Centrica idled nearly 30 percent of Rough's capacity for six months to test wells.

"This summer period has a greater potential for storage injection than last year due to the increased number of sites in operation and having lower stocks at the start of the period," National Grid said.

National Grid added that it will examine in October the impact of the capacity reduction on winter gas supplies.

Britain's gas supplies are likely to be boosted by higher imports of liquefied natural gas (LNG) this summer.

"The prices of gas in the European and Asian markets suggest that LNG deliveries to Europe may be favoured over East Asia," National Grid said.

A year-long demand slump in Asia, the world's biggest market LNG, has already triggered a rush of deliveries to European ports this year.

(Reporting by Nina Chestney and Susanna Twidale; Editing by Ruth Pitchford and Keith Weir)