Investing.com — Centrica, the operator of the UK’s largest gas storage site, has reported that UK winter gas storage levels are worrying due to a combination of cold weather extreme and high gas prices. The situation was exacerbated by the cessation of Russian gas pipeline supplies via Ukraine on December 31, 2024. As of January 9, 2025, UK storage sites were 26% lower than for the same period the previous year, with less than a week of gas demand in reserve.
The UK’s gas storage was already under pressure heading into December due to the early arrival of winter and persistently high gas prices. This made it difficult to replenish stocks over the Christmas period.
This problem is not unique to the UK. As of January 7, 2025, European storage was at 69% of capacity, up from 84% the previous year, despite many countries setting minimum storage levels ahead of winter. The UK’s total gas storage capacity is around 10% or less than that of France, Germany or the Netherlands.
Rough, the UK’s largest gas storage site, has seen a 20% drop in stocks compared to the same period last year, despite being full at the start of winter. The site has supplied nearly 420 million cubic meters (mcm) of gas since the beginning of November, enough to heat three million homes daily. Without Rough gas, UK consumers would face higher prices, increased imports and potential energy shortages.
The United Kingdom relies heavily on imports of Liquefied Natural Gas (LNG), mainly from the United States. However, LNG shipments present challenges, including geopolitical issues affecting trade routes. This places the UK in direct competition with other nations, particularly in Asia and Europe, for these vital cargoes.
Chris O’Shea, Chief Executive of Centrica Group, has expressed concern about low levels of gas storage in the UK. He highlighted the need for long-duration energy storage as the UK moves towards Clean Energy 2030. He also stressed the importance of investing in storage capacity as a valuable insurance policy against worst-case scenarios.
Centrica has proposed a £2 billion investment to upgrade and redevelop Rough, which could save UK households £100 on their gas and electricity bills each winter if it operated at full capacity. However, this investment is conditional on having a cap and floor model in place for the asset, similar to the model used for other forms of long-duration energy storage. If approved, the investment could also enable Rough to become the world’s largest hydrogen storage facility in the future.
Recent reports from Centrica and FTI suggest that Rough could have saved consumers £5.2 billion over the past two winters and could save consumers £1 billion or more per year by 2050 if converted to hydrogen storage.
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