Centrica tops up gas storage at Rough site ahead of winter
The UK has enjoyed a much needed supply boost, after Centrica revealed it has refilled the UK’s biggest gas storage site to its maximum potential capacity for the winter.
The owner of British Gas confirmed it has installed enough infrastructure and secured sufficient supplies to hold up to three days of average UK winter gas demand.
Centrica told City A.M. that it had now reached its target of 30bn cubic feet of gas.
This follows the partial reopening of the Rough gas storage site last month, which sits 18 miles off the coast of Yorkshire, five years after closing the ageing facility amid a dispute over funding.
The total amount of gas is only a fifth of Rough’s original capacity of 150bn.
However, the UK has minimal remaining gas storage, and the reduced Rough storage site is expected boost the UK’s total capacity by around 50 per cent.
Centrica is also pushing the Government for minimum revenue guarantees to invest the £150m required to double Rough’s capacity to 60bn cubic feet by next winter.
This would require public funding, presumably from taxpayers, or levies on energy bill payers.
In the long term, Centrica is looking for financial support to back its £2bn plan to turn the site into a hydrogen storage facility.
Centrica has managed to top up gas storage amid declining wholesale prices over the past few months, reflected in lower spot prices for gas.
This reflected reduced demand amid warmer than expected winter weather, with prices dropping to below 50p per therm in October.
However, prices have ticked up in recent days as winter draws in, alongside nuclear power outages in France, with domestic December contracts trading at £3.17 per therm.
Earlier this year, Centrica secured a long-term deal with Norwegian giant Equinor to supply 10bn cubic metres of gas per year, enough to heat 4.5m homes.
Fears of supply shortages have escalated in recent days, after National Grid considered implementing emergency measures to stave off blackouts.
It was preparing to offer households payments to switch off appliances at peak times as the first line of defence to avoid a supply crunch.
National Grid ultimately chose not to invoke the blackout measures after more gas power was secured from domestic plants.