National Grid issued a warning that gas stocks were low as a cold snap caused demand to surge ©123RF
National Grid issued a warning that gas stocks were low as a cold snap caused demand to surge ©123RF

Not enough UK gas storage, warns professor

posted by Francis Churchill
1 March 2018

A lack of storage facilities has increased the risk of gas shortages, a professor has warned.

Michael Bradshaw, professor of global energy at Warwick Business School, spoke out after National Grid (NG) issued a warning that gas stocks were low as demand surges in the current cold snap.

Bradshaw said a growing reliance on gas from Norway and the rest of Europe has made the UK more dependent on gas storage facilities to ensure constant supply. But closures, including Centrica’s storage facility at Rough last year, are causing the current supply difficulties.

Bradshaw said: “Historically, flexible supply came from simply producing more from the North Sea, but that option has gone.

“Instead, flexibility today comes from four sources: Norwegian offshore production, gas in storage, gas in the LNG terminals – of which there are three – and gas from Europe via the interconnectors. What gas comes from where depends on the market price in the UK, Europe and globally, and the willingness of those that own the gas to sell.”

Extreme weather conditions in the UK, dubbed the Beast from the East, have caused gas demand to spike. This, combined with “gas supply losses” overnight has led NG to issue a Gas Deficit Warning to the market, a notice that the NG would like more of the UK’s gas stocks to be made available.

As a result gas intensive industries and businesses could be asked to use less gas to ensure enough is available for consumer markets, said Bradshaw.

Speaking on Radio 4’s World at One today, Duncan Burt, acting director of operations for NG, dismissed concerns. He said: “As you can imagine we plan for this type of situation, we’re always prepared for it and the deficit warning we issued is part of our normal toolkit we’ll use in sever weather when demand rises to make sure we can balance supply and demand.”

Burt said protecting domestic customer supplies was NG’s first priority, and that the deficit warning was “an industry notice that doesn’t affect domestic supply”. “Some industries will have arrangements with their suppliers to turn down or to come off when we see very high demands like this, and that’s part of the industry and the market working well to make supplies available and to keep costs down for the consumer at home.”

He added: “There will always be discussions and debates about what the right balance of storage is, we are very confident with the position today that we’ve got the tools to balance the network.”

But Bradshaw said the UK was short on gas supplies before the Rough storage facility was closed, with a storage capacity of only 5.8% of total consumption in 2016. By comparison, Germany, France and Italy can cover 20% of demand with stored gas.

“Large industrial consumers are likely to be asked to reduce their consumption, but as the cold spell continues things could get very difficult if there were technical failures on what is an ageing infrastructure,” he said.

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