Britain only has gas to last two weeks in event of energy crisis

THE UK must double its “dangerously low” levels of gas storage by 2020 in order to ensure a secure supply and keep energy bills down, according to a new report.

The Energy and Climate Change Committee has pointed out the UK only has enough storage for two weeks’ worth of gas. France has enough for 87 days and Germany has enough for 69 days.

Whereas the UK consumes about 100 billion cubic metres of gas per year, it only has storage capacity equivalent to a little over 4 per cent of this, according to the report The UK’s Energy Supply: Security or Independence?

MPs argue the government needs to raise the UK’s gas storage capacity to cope with supply interruptions or price spikes.

Threats to energy supply include terrorist attacks and rising global energy prices, as well as longer-term changes such as the decline in global oil reserves and the need to decarbonise the energy system. Gas is routinely put into storage in summer when it is abundant and cheap and taken out in winter when prices and demand are higher, in order to manage fluctuations in seasonal demand.

And the report argues gas storage will become increasingly important as the contribution of wind power ramps up, to provide cover for intermittency of supply from turbines.

The report concludes: “The Department of Energy and Climate Change (DECC) should be concerned about the lack of gas storage used to manage seasonal demand fluctuations.

“It should aim to double the UK’s current gas storage from current levels by 2020 in order to avoid exposure to gas supply interruptions and price spikes, and, in the longer term, to ensure a resilient gas supply to flexible gas plants acting as ‘backup’ to intermittent electricity generated from wind.” The committee also criticised the government for making an “opportunistic raid” on North Sea oil and gas producers with a £2 billion levy in the Budget, warning it could damage investor confidence in home-grown fossil fuel production.

The UK’s dependence on imports has been increasing. Imports of natural gas increased by almost a third between 2009 and 2010. In 2009, imported gas accounted for about a third of the total gas used.

About 60 per cent of the UK’s imported gas comes from Norway, about a quarter is liquefied natural gas from various countries and about 16 per cent comes from the Netherlands. A small proportion, about 2 per cent, comes from Russia.

Tim Yeo, MP, committee chairman, said: “In an uncertain world the UK needs to think hard about its energy security.

“The UK will become more dependent on energy imports as North Sea oil and gas declines, but prudent planning can ensure this doesn’t reduce our energy security too drastically.”

He added: “Fortunately, the UK is already reasonably energy secure, but encouraging investment in gas storage and insulating more homes will improve our position.”

Energy minister Charles Hendry said energy security was “right at the heart of the coalition’s energy policy”.

He added: “We have consented proposals for gas storage facilities that more than double our capacity and have legislated to give Ofgem the power to incentivise the gas market to ensure secure supply.”

A spokesman for DECC said the UK had such a diverse range of gas supplies that they would not expect a situation to arise where it ran out.

An Ofgem spokesman agreed that investment in storage infrastructure was needed. But he said it could be “misleading” to compare the UK’s 14-day gas storage figure with the rest of Europe, because countries such as France and Germany had never had indigenous sources of gas like the UK, so have historically needed to store far more.