Ministers were warned last year that the closure of Britain’s largest North Sea gas storage facility could lead to shortages and price spikes.
Industry leaders warned that the closure of Rough without plans to replace it would make the UK vulnerable to the price spikes and shortages reported by the National Grid yesterday.
The Rough site was responsible for 70 per cent of the UK’s entire gas storage capacity at its peak.
Ministers ignored warnings that the closure of Rough, Britain’s largest North Sea gas storage facility, could lead to shortages and price spikes
Ministers were warned last year that the closure of Rough could leave the country vulnerable. Pictured: Abandoned car in Saddleworth
Industry leaders warned that the closure of Rough without plans to replace it would make the UK vulnerable to the price spikes and shortages. Pictured: Image taken from bridge of RFA Tidespring during bad weather yesterday
Run by the owner of British Gas – Centrica – it was converted into a storage facility in 1985 based on the concept that during the summer, cheap gas would be pumped in to be held for use later.
After the closure decision last June, the Energy and Utilities Alliance (EUA), wrote to MPs on the Commons Business and Energy Select committee in August, supporting requests for an inquiry.
At the time, its chief executive Mike Foster warned: ‘The closure of Britain’s largest storage site for natural gas gets rid of a vital supply buffer which allowed us to reduce reliance on gas imports. This almost certainly means greater volatility for gas prices this winter.’
But the Government’s Department for Business, Energy and Industrial Strategy, waved away fears, saying: ‘The decision to close Rough will not have a material bearing on current UK gas prices because it was widely anticipated by the market…’
Gas currently stored at Rough is being removed at low daily rates by Centrica in a four-year plan to run down the site, off the Yorkshire coast.
It emerged as emergency measures were put in place last night to prevent UK homes from freezing amid a gas shortage.
The Rough site was responsible for 70 per cent of the UK’s entire gas storage capacity at its peak. Drinkers in Tynemouth, Tyne and Wear, larked about in the snow yesterday
Rough is run by the owner of British Gas, Centrica, and was converted into a storage facility in 1985. Storm clouds gathered over Dublin Bay yesterday
Left: The front door of Emily Buckle’s home in Stainmore, Cumbria on Thursday. Right: Stephen Cavanagh, who drowned in a lake in Welling
After a spike in demand caused by the big freeze, a lack of storage and import failures, The National Grid was forced to issue a ‘Gas Deficit Warning’, asking major industrial gas users to stop or scale back production. But the Government insisted homeowners did not have to cut back yet.
The freezing temperatures caused a surge in demand for gas yesterday which meant the forecast need was put at 395 million cubic metres(mcm) of gas – about a third higher than normal for this time of year.
The National Grid said that the amount of gas available was a lower 355mcm, creating a shortfall of some 14 per cent.
The recent cold weather has also led to a surge in the so-called spot price of gas – gas purchased and delivered on the same day.
The figure has spiralled to a 12-year high – jumping from 54p a therm earlier this month to 200p yesterday. This is expected to bring an imminent rise in tariffs for millions.
In winter, Britain is heavily reliant on imports of gas from the Continent through pipelines and, particularly, Norwegian gas fields.
We also get imports of liquefied natural gas (LNG) via tanker from around the world in to terminals in Wales and the Isle of Grain, Kent.
Last winter, some 38 per cent of the UK gas supply came from the North Sea, 42 per cent from Norway and 10 per cent from pipelines linked to continental Europe.
A further 4 per cent came from LNG from countries such as Qatar, with the remainder provided by storage.
The National Grid said an ‘outage’ at the South Hook LNG terminal in Wales yesterday meant its entire daily output of 60mcm was unavailable.
At the same time the flow of gas from two sources in Norway was cut by 50mcm due to technical issues.
Yesterday, the EUA’s chief executive Mike Foster said: ‘The announcement today by National Grid that gas supplies may be interrupted due to a combination of cold weather, lack of gas storage and operational issues is entirely predictable.
‘Ironically, there is a meeting planned with the Energy Minister Claire Perry in two weeks’ time, as a result of our lobbying for a full review into UK gas storage to be undertaken.
Perhaps this time they will listen to us.’ Yesterday, Miss Perry insisted: ‘The National Grid is following a standard procedure and people’s domestic supplies won’t be affected.’
Dr Jonathan Marshall, Energy Analyst at the Energy and Climate Intelligence Unit, said: ‘Behind today’s gas deficit warning is a ‘perfect storm’ of unrelated short-term issues.
‘But underlying it is another set of issues that speak to a failure by successive Governments to map out a secure gas future in the way that they have done so successfully for electricity.’
Energy giant Ineos yesterday said it was cutting gas consumption at its Runcorn plant by 20 per cent.