The Government needs to step up its efforts to protect the UK's energy supplies from short-term shocks, with the country's "dangerously low" gas storage capacity leaving it prone to supply interruptions and sudden price spikes, an influential group of MPs will warn this morning.
The Energy and Climate Change Committee will also point out that, while the UK is growing increasingly dependent on energy imports, the Department for Energy and Climate Change has not "published a strategy for achieving energy security", in contrast to its approach to climate change. The committee's chairman, Tim Yeo, said: "In an uncertain world, the UK needs to think hard about its energy security. The UK will become more dependent on energy imports as North Sea oil and gas declines, but prudent planning can ensure this doesn't reduce our energy security too drastically."
In their report on energy supply, the MPs highlight the fact that the UK's current gas storage capacity – an important component of energy security – extends to only 14 days' supply. The biggest storage facility in the UK is Centrica's Rough undersea gas storage in the southern North Sea.
The MPs also say the Government needs to avoid measures that might hit confidence among energy investors. "The way in which the £2bn levy on North Seas producers was announced in [the] Budget ... may have undermined investor confidence," the report says.
The committee also took issue with the proposals in the White Paper on electricity market reforms, saying it was "not convinced" that they "strike the right balance between encouraging investment in new gas-fired plant[s] in the short term ... and the need to decarbonise the power sector over the course of the 2020s".
It said more action was needed to cut energy waste. "The Government could be doing a lot more to reduce unnecessary energy wastage. It needs to look at how it can use building regulations and energy efficiency standards for electrical appliances to cut waste and save cash on people's energy bills," Mr Yeo said.
The UK's gas storage capacity equates to only 14 days' supply, far less than the country's European neighbours. France has storage equating to 87 days' supply, while Germany has 69 days' worth.