As the UK charges ahead with its ambitious plan to decarbonize the electricity grid by 2030, a looming decision by Centrica to potentially close the country’s largest gas storage facility is raising concerns about the energy system’s readiness for a renewables-heavy future. The Rough site, which was partially reopened in 2022 after being shut down, currently accounts for half of the UK’s total gas storage capacity. Its closure would deal a significant blow to the country’s ability to manage the increasingly volatile demand for gas in the coming years.
The Importance of Gas Storage in a Renewables-Dominated System
While the UK’s clean energy push is centered around rapidly expanding wind and solar power, gas-fired plants will still play a crucial role as a backup source, generating up to 35GW during periods of high demand and low renewable output. These dunkelflaute events, characterized by cold, windless, and overcast days, can leave the UK heavily reliant on gas, which can account for as much as 70% of electricity generation during such times.
In this context, having sufficient gas storage capacity becomes even more critical. As renewable penetration increases, gas demand for power generation will become more unpredictable and volatile. Without adequate reserves, the UK could find itself vulnerable to supply disruptions and price spikes during periods of peak demand.
Centrica’s Warning and the Economics of Gas Storage
Centrica’s chief executive, Chris O’Shea, has warned that the Rough facility is expected to incur operating losses of £50-100 million in 2025, putting its future in jeopardy. The company argues that the economics of gas storage only work when there is a wide spread between summer and winter prices, a condition that has not been met since the aftermath of Russia’s invasion of Ukraine.
“Making material losses is not something that is either sustainable or will be sustained by us.”
– Chris O’Shea, Centrica CEO
While some have accused Centrica of engaging in self-interested lobbying, seeking a long-term government deal that would also cover the eventual conversion of Rough to store hydrogen, the potential risks of losing such a significant portion of the UK’s storage capacity cannot be ignored.
Assessing the Risks and the Need for Strategic Reserves
Energy experts acknowledge that the importance of the Rough facility may be overstated in the short term, as it cannot pump huge volumes when most needed due to its partial reopening and low pressures. However, they also point out that the real issue is whether the UK needs an expanded Rough as a strategic gas reserve to insure against future geopolitical and supply shocks.
- The UK already has some of the lowest levels of gas storage in Europe
- Closure of Rough would halve the country’s total storage capacity
- A renewables-heavy system makes gas demand for generation more volatile and unpredictable
- Strategic reserves can protect consumers from price spikes and supply disruptions
Despite these concerns, the UK’s major energy strategy documents, such as the Clean Power 2030 advisory report and the government’s own 2030 Action Plan, have given little attention to the issue of gas storage. The future of the Rough facility is currently being treated as a purely commercial matter for Centrica.
The Need for a Comprehensive Assessment of Gas Storage Requirements
As the UK accelerates its transition to a renewables-dominated energy system, it is crucial that policymakers and industry leaders conduct a thorough assessment of the country’s gas storage requirements. This should take into account not only the need for short-term balancing and flexibility but also the importance of long-term strategic reserves to mitigate the risks of supply disruptions and price volatility.
While the focus on expanding renewable energy sources is both necessary and commendable, it is equally important to ensure that the gas infrastructure that will continue to play a vital backup role is resilient, reliable, and adequately prepared for the challenges ahead. Failing to address this issue could leave the UK’s energy system vulnerable to shocks and undermine the country’s efforts to achieve a smooth and successful transition to a low-carbon future.
As the debate over the future of the Rough storage facility and the UK’s wider gas storage strategy continues, it is clear that a more comprehensive and forward-looking approach is needed. By carefully assessing the risks and requirements of a renewables-heavy energy system, policymakers and industry leaders can work together to develop a gas storage strategy that balances short-term flexibility with long-term security, ensuring that the UK’s energy transition is built on a solid and sustainable foundation.
