Following, Centrica Storage’s announcement to close their Rough gas storage facility permanently, the British Ceramic Confederation (BCC) in association with the Major Energy Users Council (MEUC) and Stag Energy, a leading storage developer, are urging Government intervention to ensure additional gas storage is built to protect industry and consumers from higher and more volatile gas prices.
On 20th June 2017, Centrica Storage Limited (CSL) announced the permanent closure of its Rough gas storage facility, given it could not safely return to operation and that it was uneconomic to refurbish or rebuild the ageing facility. This facility provides around 75% of the UK’s gas storage capacity.
Gas storage plays an essential role in protecting gas prices and physical supply security for consumers. The closure of Rough will reduce the working capacity of UK gas storage from 4 bcm to 1.3 bcm - a fall in gas storage capacity relative to annual demand from 6.4% to 1.6% - equivalent to only a couple of days of average winter demand. Gas storage acts an essential buffer to dampen the effects of demand and supply fluctuations, thereby reducing price volatility.
Reacting to the closure, Dr Andrew McDermott, Technical Director of the British Ceramic Confederation, commented: “The loss of virtually all of the UK’s gas storage capacity will lead to higher and more volatile gas prices, especially during winter when demand is highest, which will be damaging to large industrial gas users, such as ceramics.”
Eddie Proffitt, Technical Director of the MEUC added “We have been calling, for some time, for Government intervention to ensure a minimum level of UK gas storage is maintained. As domestic production continues to decline, we urge Government as a matter of urgency to introduce a regulatory framework to underpin a minimum level of UK gas storage in order to provide consumer price protection and unlock new investment in storage.
Thousands of industrial users are dependent on gas, so higher and more volatile gas prices and increased vulnerability to demand shocks could have a significant effect on businesses, jobs and investment.”
George Grant, CEO of Stag Energy and Gateway Storage said “This further compounds our concerns over the vulnerability of the UK to disruptions in LNG supplies from Qatar due its political isolation and potential disruption to Continental supplies due to ongoing tensions over Ukraine and the uncertainties over the outcome of the Brexit negotiations.”
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For further information please contact Dr Andrew McDermott (Technical Director, British Ceramic Confederation, 07833 059661, firstname.lastname@example.org).
Notes to Editors
The British Ceramic Confederation is the trade association for the UK ceramic manufacturing industry, representing the common and collective interests of all sectors of the industry. Its member companies cover the full spectrum of ceramic manufacture, including the supply of materials, and comprise over 90% of the industry’s manufacturing capacity.