The UK has “almost no gas” stored for this winter, according to a warning from the head of British Gas owner Centrica. Chris O’Shea, chief executive of Centrica, said the lack of storage is a “huge concern as energy security is a national security.”
Storage levels far below last year
The UK has significantly less natural gas storage capacity compared to other European countries, which have spent decades building up reserves to cope with peak demand. Instead, the UK relies on a small number of gas sites, including salt caverns and depleted oil and gas fields, along with imports.
Figures suggested the UK’s gas facilities were around 30% full this week, down from 46% at the same time last year. They were more than 90% full in the two years before that.
Concerns over imports and price rises
Concerns have been fuelled by the closure of the Strait of Hormuz after the outbreak of the Middle East war. The waterway is vital for shipments of liquefied natural gas (LNG), as well as oil. The conflict has led to a surge in wholesale energy prices and more competition for LNG shipments from other countries, including in Asia.
The jump will see tens of millions of households hit with another winter price shock, regulator Ofgem confirmed this week. Its price cap is rising by 4% from this October, just as many households will turn on their heating as temperatures start to fall.
Centrica seeks backing for Rough investment
Mr O’Shea’s comments come as Centrica urges the government to provide backing for a proposed £2 billion investment by the company in its existing sub-sea Rough storage facility. The facility, beneath the North Sea, is the single biggest gas storage site for the UK. However, Centrica says it is losing £10 million a month maintaining it.
The company wants ministers to commit to a “cap and floor” financing mechanism to guarantee a return on its investment. Mr O’Shea’s comments came after he warned last month “time is running short” to ensure the country’s largest gas storage site remains open. He said Rough would be “close to exhausted” by the winter, as the firm called on the government to step in. The former gas field could store enough gas for up to 30 days.
