Britain, even in rapid energy transition mode, will still need a lot of gas in the years ahead – and needs to know how the gas will arrive. It could hardly be otherwise when there are 24m households with a gas connection, largely for heating, and the pace of heat pumps adoption is miserable. Last year gas comprised about a third of the UK’s overall energy needs.
Though annual consumption is in decline, the days of peak use during a bleak midwinter can still be as high as ever. The difficulty has been getting ministers to focus on the combination of declining North Sea volumes (about 40% of supply), skimpy levels of gas storage and limited capacity for importing the stuff via tanker. Until now, the default position under successive governments has been that the market will provide.
A scary report from the energy system operator last November, however, warned of “an emerging risk” to gas supplies at the turn of the decade if an important piece of infrastructure, such as one of only three terminals for importing liquefied natural gas (LNG), were to be offline during a cold snap. Now comes the government’s formal response. Or, rather, it’s half a response since this was an interim version cloaked in the language of “more analysis needed”.
But one significant shift was reasonably clear: the government thinks it will probably have to intervene to ensure sufficient gas capacity and infrastructure is in place. That could mean contracts to underpin more storage, more import terminals or something else. There are three observations to make about this report.
First, ministers need to hurry up and decide what they want, as opposed to repeatedly describing the menu of options. What he did not do, however, was set out a timetable for choosing what kit is needed and by when. If, for example, regeneration of Centrica’s Rough storage site off the coast of Yorkshire is one solution, that £2bn project won’t happen overnight.
Nor could alternative onshore or offshore storage facilities, or even floating offshore import terminals, be summoned immediately. If the 2030 risk of running short of gas is real, get on with it. Second, what about this winter?
Extract — continue reading at the source.
