Energy firms to be forced to keep large gas reserves under new proposals
Amendment to Energy Bill suggested amid growing concerns over energy shortages
Large energy firms could be forced to hold a minimum level of gas in storage, amid growing concerns about shortages linked to the prolonged period of cold weather.
Just days after analysts raised the prospect of gas rationing, ministers are considering inserting a “security of supply” amendment to the Energy Bill. The government is understood to be considering a proposal by Ofgem, the regulator, that would oblige suppliers to keep stocks above a specified level to ensure recent supply scares are not repeated.
“The Government is considering whether intervention in the market in needed to encourage additional gas storage build,” said a spokesman for the Department of Energy & Climate Change.
Because of its historic reliance on the North Sea’s now diminished gas supply, the UK has a much lower level of storage capacity than many other countries. Britain has the ability to store just 20 days supply of gas, compared to 103 days in France, 92 days in Germany and 70 days in Italy.
With North Sea reserves now producing less than 40 per cent of UK demand, the country is buying far more of its gas on the volatile “spot” market. This means Britain is paying far more for its gas by buying at the last minute, than if it had bought the gas earlier at a lower price and stored it in a tank until it was needed.
Andrew Hammond, of the energy consultancy Utilyx, said the UK needed to “at least” double its gas storage capacity – implying at least another 20 days of reserves.
Ann Robinson, director of consumer policy at uSwitch, the energy consultant, said: “We need more storage to stabilise the price we pay for gas and we must get on with this. We’re going to need a range of measures... including tax breaks and streamlining of planning permission.”
The UK’s biggest storage capacity by far, the disused Rough North Sea field off the Yorkshire coast, can hold about 15 days of supply. Analysts said a storage facility of this size would cost about £2bn, implying a cost of about £2.6bn for an extra 20 days supply, the minimum experts believe is needed.
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
£65000 - £80000 per annum: Recruitment Genius: Finance Director required to jo...
£15000 - £25000 per annum: Recruitment Genius: This is a unique opportunity fo...
£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...
£27000 per annum + pension + holidays: The Jenrick Group: A Quality Technician...