Britain rejects state owned gas storage

Britain will not build state owned gas storage to ensure energy supply as this would raise gas prices, the Department of Energy and Climate Change said.

Britain rejects state owned gas storage

Britain will not build state owned gas storage to ensure energy supply as this would raise gas prices, unsettle gas the market and harm commercial investments, the Department of Energy and Climate Change (DECC) said.

"In light of these challenges, the Government has decided not to pursue this option," it said on Thursday in a report on gas security.

Instead, it is considering asking gas producers to provide gas production figures ahead of the high winter demand period to assess the risk of a gas shortage, and improving communications with the Norwegian energy network operator.

Britain has a lower ratio of storage as a percentage of demand than France or Germany, prompting calls for more storage to be built to buffer against unexpected supply cuts like those caused by a Russia-Ukraine gas dispute two winters ago.

The country imports a large amount of gas from Norway, and a technical problem at a Norwegian gas field set off a gas balancing alert in Britain last winter when exceptionally cold weather sent demand soaring.

Other security measures under consideration include giving financial incentives to balance supply and demand in emergencies and possibly strengthening suppliers' obligations to provide gas for homes and small to medium sized businesses.

Sam Laidlaw, the chief executive of utility Centrica, said the government needed to back development of commercial gas storage facilities.

"The policy statement rightly recognises the success of the liberalised energy market in delivering the necessary investment in new infrastructure," Laidlaw said.

Centrica operates Rough, the largest gas storage facility in Britain, and is also investing in other storage projects.

"The government must continue to support the development of new commercial gas storage and efforts to secure long-term LNG (liquefied natural gas) supply contracts for the UK," Laidlaw said.

For a list of Britain's gas storage projects, please click here:

Last year Britain opened two new LNG terminals in south Wales, with a combined supply capacity of around 27 billion cubic metres of gas a year when fully commissioned, which is enough to supply a quarter of Britain's gas needs.

DECC also gave consent to a 1,520 megawatt gas-fired power plant in Carrington in greater Manchester, north England.

Construction of the combined cycle gas turbine (CCGT) plant is expected to take 30 months and it is scheduled to be fully operational in 2013.

The plant is owned by Wainstone Energy.

Reuters

Güncelleme Tarihi: 01 Nisan 2010, 21:50
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