Centrica set to go ahead with controversial plans for gas storage units

Centrica, the company who owns energy giant British Gas, has gone against its word to build two new gas storage facilities. The move seeks to reduce the UK’s dependency on gas imports and increase self sufficiency. The two storage facilities were to be built in the strategic areas of the North Sea, off the Norfolk Coast and in East Yorkshire at Caythorpe.

The project is said to have created the second biggest storage facility of gas supplies in the country at the North Sea’s Baird gas field. The cost of building the two storage facilities would come to a total cost of 240 million Euros, leaving their shares down by 1.5 percent.

The move to not build the storage facilities which seemed to be an earlier intention, was attributed to the fact that the UK government had refused to subsidise gas storage prices. A statement made by the Energy Minister, Mr. Michael Fallon said clearly that subsidising the storage facilities would bring about, over the course of a decade, a cost of up to 750 million Euros.

The use of gas in households invariably rises sharply during the winter. Demand for gas becomes really high at this time and thus supplies can become alarmingly low. At the moment, UK only has around 15 days supply of gas stored.

Comparing this value to that of Germany or France, where they have up to 99 or 122 days of supply of stored gas, respectively, the UK is lagging far behind. The government, however still argues that the UK does not need such large amounts in storage due to its high import infrastructure, plus the access to supplies from the North Sea.

March, which experienced a series of low temperatures, left the supply of gas very low, even creating fears of interruptions of the gas supply. Centrica, back in July, brought out a similar warning, claiming that UK domestic energy bills would shoot up again this winter