UK Committee Announces Gas Storage Probe
UK trade body the Energy & Utilities Alliance (EUA) said October 17 it welcomed the government select committee’s decision to carry out an inquiry into UK gas storage, in the wake of the closure of Rough storage. The committee confirmed that it will hold its evidence session October 31, as reported by NGW.
The chair of the Business, Energy and Industrial Strategy committee Rachel Reeves said in a separate statement: "As winter approaches, we want to examine what action the government is taking to ensure we can have confidence in the security of our gas supplies. We will want to question industry experts and government on the future role for gas storage following the closure of the Rough gas storage facility and in the light of weather events such as the ‘Beast from the East’. Given our increased reliance on gas imports, we will also be asking what government is doing to guard against gas shortages and the potential knock-on effects of increased energy costs for businesses and domestic consumers.”
The evidence session is likely to explore questions concerning the decision to close the Rough gas storage facility, which accounted for about three quarters of UK storage capacity; and how the supply and availability of the UK’s gas supply is evaluated. The hearing is expected to examine issues around the potential for future provision of new gas storage facilities and whether the costs should be borne by the taxpayer or, ultimately, businesses and consumers.
Present will be the former head of Centrica Storage regulatory affairs Roddy Monroe and now head of the gas storage operators group; Oliver Rix, partner at Baringa responsible for energy and resources; the acting director of operations at National Grid Duncan Burt; and the CEO of the Ceramic Confederation Laura Cohen. There will also be officials from the Department for Business, Energy and Industrial Strategy present, the committee said,
The EUA said separately that gas storage has not been actively assessed for over five years, a period that has seen a number of material changes to the energy market, including the closure of Rough Storage and the Dutch Groningen field, which have the potential to worsen energy security and, in particular, significantly increase the exposure to extreme price volatility. These detrimental changes to UK energy security are compounded by the uncertainty of the future energy arrangements post Brexit, it said.
Monroe said there may be serious implications for UK energy security if policy makers rely solely on the market to deliver the right level of investment to meet broader government’s objectives including transiting to a low carbon economy and providing access to affordable energy.
He said in the EUA statement: "Energy security is underpinned by long life, capital intensive investments which require long term financial certainty; these are not characteristics found in our energy market today. We have seen that the government felt it necessary to intervene to help deliver positive changes to the electricity market, such intervention may now be necessary for the gas market if we are to provide the right level of gas security.”