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.
Easter egg hunt horror as mother finds dead body under deck of house
Missing Malaysia Airlines Flight MH370: Wreckage could be found within a week as search reaches 'very critical juncture', says minister
The new people’s republic of east Ukraine
Loch Ness Monster found on Apple Maps?
Royal Tour 2014: Is the Duchess of Cambridge the only person ever to climb into a fighter jet wearing a dress and high heels?
The food poverty scandal that shames Britain: Nearly 1m people rely on handouts to eat – and benefit reforms may be to blame
Scottish independence: It is the English who should be on their knees, begging the Scots to vote ‘No’
Nigel Farage fatigue? Half of voters ‘immune’ to Ukip’s appeal
'Sinful': Video of British Muslims dancing to Pharrell Williams's hit Happy comes under attack
Nigel Farage: I’m taking on the status quo, and the Establishment’s fighting back
Refugee facing deportation from Sweden saved by fellow passengers refusing to let plane leave
- 1 Easter egg hunt horror as mother finds dead body under deck of house
- 2 'Natural' energy drink banned for containing erectile dysfunction drug
- 3 A bottle of wine a day is not bad for you and abstaining is worse than drinking, scientist claims
- 4 Loch Ness Monster found on Apple Maps?
- 5 Kingdom Tower: Construction of 1km high new world’s tallest building to begin next week in Saudi Arabia
£150.00 per week: QA Apprenticeships: This company is a company that specializ...
£153.75 per week: QA Apprenticeships: This company is an innovative outsourcin...
£150.00 per week: QA Apprenticeships: This company has been providing on site ...
£150.00 per week: QA Apprenticeships: We've been supplying best of breed peopl...