Britain’s gas storage levels are alarmingly low, with the largest gas storage operator, Centrica, warning that the UK has less than a week’s worth of demand in reserve. This revelation has intensified scrutiny of past government decisions, particularly under Conservative leadership, that have contributed to the country’s precarious energy security.
Britain’s Gas Reliance and Current Crisis
The UK relies heavily on gas, not only for heating homes but also for generating electricity. However, as of 9 January 2025, the nation’s storage sites are only half full, with inventory levels 26% lower than the same time last year. Centrica attributes the shortfall to a combination of plunging temperatures, high demand for gas-fired power stations, and persistently high wholesale gas prices.
In comparison, European gas storage levels started this week at 69%, a stark contrast to last year’s 84%. The disparity highlights Britain’s lack of a mandatory gas storage target, unlike its continental neighbours. This deficiency has left the country exposed to greater risks of supply shortages and price volatility during periods of high demand.
The Role of Rough and Reduced Capacity
The Rough gas storage site, a depleted gas field off England’s east coast, accounts for approximately half of the UK’s gas storage capacity. This facility plays a crucial role in ensuring Britain’s energy security, particularly during the winter months when demand soars. Yet, gas storage levels were already unseasonably low entering December, exacerbated by an early onset of winter and the challenges of replenishing stocks during the Christmas period.
Gas storage is vital for balancing supply and demand, especially as nations transition to renewable energy sources. It also provides a buffer against price spikes on wholesale markets, a feature that is notably absent in the UK’s energy strategy.
Decisions Under Tory Leadership
The current energy crisis is rooted in decisions made during Liz Truss’s tenure as Prime Minister and under successive Conservative administrations. In 2017, the government oversaw the closure of Rough as a long-term storage facility, citing high maintenance costs. The decision, described by critics as short-sighted, reduced the UK’s storage capacity to just 1% of annual gas demand – far below the European average of 25%.
Despite renewed calls to bolster energy security after Russia’s invasion of Ukraine and the subsequent European energy crisis, there was little appetite within Tory leadership to invest in rebuilding the nation’s storage capacity. Instead, the focus was placed on short-term market dynamics, leaving Britain vulnerable to the dual challenges of high prices and limited supply.
The Cost of Being an Outlier
Centrica’s CEO, Chris O’Shea, has pointed out that Britain’s lack of a strategic storage policy has made it an outlier in Europe. While countries like Germany and France mandated higher storage targets to shield their populations from potential shortages, the UK’s reliance on “just-in-time” energy imports has proven unsustainable during periods of high demand.
The result has been a perfect storm: limited storage, high wholesale prices, and soaring domestic demand have exposed millions of households and businesses to unprecedented risks.
Lessons for the Future
To avoid repeating these mistakes, Britain must reassess its approach to energy storage. Increasing capacity at sites like Rough, setting mandatory storage targets, and diversifying energy sources will be crucial steps in safeguarding the nation’s energy security. The current crisis underscores the importance of long-term planning and investment, lessons the UK can ill afford to ignore as it navigates the transition to a greener energy future.
The Tory decision to cut storage capacity has left the country ill-prepared to weather the challenges of a volatile energy market. As temperatures drop and storage levels dwindle, it is a stark reminder of the cost of prioritising short-term savings over long-term resilience.
