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Responding to this week's report from the Energy and Climate Change Committee, SBGI's Gas Storage Operators Group (GSOG) supports the committees finding that UK Gas Storage capacity needs to be increased.
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UK GAS STORAGE CAPACITY MUST BE INCREASED
Responding to this week's report from the Energy and Climate Change Committee, SBGI's Gas Storage Operators Group (GSOG) supports the committees finding that UK Gas Storage capacity needs to be increased . The Group, which includes both established operators and developers of new storage projects, large multinational companies and smaller private ventures, currently manage the UK's limited supply.
The UK has one of the lowest levels of gas storage capacity in Europe and requires significantly more volume. Mike Foster, SBGI Chief Executive, explains "Storage capacity is around 4 billion cubic metres or 4% of the annual consumption - enough to supply consumers for about two weeks. Although this is similar to other EU gas producing countries such as the Netherlands, it is much, much lower than the EU average of 15% of annual demand. Germany and France store around 20% or 10 - 12 weeks".
The bulk of the UK's gas storage capacity is held at the Rough facility in the North Sea, operated by Centrica Storage, which can hold up to 2.82 bcm. The next largest is Scottish & Southern Energy's 0.32 bcm Hornsea store in Yorkshire. Other onshore sites include Hatfield Moor, Humbly Grove and Hole House Farm.
Planned projects in the UK could double storage capacity but tough economic conditions and uncertainty regarding long term prices combined with regulatory and policy uncertainty, all pose major challenges to the industry. The Gas Storage Operators Group is actively addressing these and other subject matter as part of the work of the group.
Mike Foster, SBGI Chief Executive adds "It is essential storage capacity is increased to minimise the potential damage from supply interruptions or price spikes. Imported gas met half of UK demand in 2009 and by 2016 the UK could be importing around 80%. This has implications for security of supply and the swing capability to meet peak gas demand - swing referring to the significant difference in gas consumption between summer and winter.
Despite the construction of interconnector pipe-lines to increase the capacity to import gas from Europe, and additional LNG terminals to bring gas in by ship from the Middle East, there is no guarantee that the gas flows will be available or can be managed in the market place to meet the swing requirements or balance the network on a daily basis throughout the year. Cold weather tends to affect Europe at the same time putting pressure on supplies and LNG ship imports can quickly be diverted to a market where the price might be higher".
ENDS
For further information please contact Caroline Taylor at: caroline@sbgi.org.uk
Notes for editors
SBGI Utility Networks is a membership organisation which represents and promotes the interests of UK energy & utility network companies. Building on a long track record of service to the onshore gas industry organisation provides a range of value-adding services to members.
SBGI Gas Storage Operators Group Members:
BGE UK,Centrica Storage Ltd,Cheshire Cavity Storage Group Ltd,E.ON Gas Storage UK Ltd,EDF Trading Gas,Storage Ltd,Eni UK Ltd,Gateway Gas Storage Company Ltd,Halite Energy Group,INEOS Enterprises Ltd,Infrastrata Plc,Scottish Power Gas Transportation Hatfield Ltd,SSE Hornsea Ltd,Star Energy Group plc,Statoil (UK) Ltd,Storengy UK Ltd,WINGAS Storage UK Ltd.
For more information please visit www.sbgi.org.uk/utilitynetworks
The link to the Energy & Climate change committee report is http://www.parliament.uk/business/committees/committees-a-z/commons-select/energy-and-climate-change-committee/news/ukes-report-findings/
Contact Information
Caroline Taylor
SBGI Utility Networks
Camden House
Warwick Road
Kenilworth
CV8 1TH
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