A trade body has welcomed a government enquiry into whether the UK has enough gas in supply.
The Energy and Utilities Alliances explained that UK gas storage has not been actively assessed for more than five years, and in that time there have been a number of changes to the energy market which have the potential to worsen energy security and significantly increase the exposure to extreme price volatility.
These changes, according to the EUA, include reductions in flexible European gas production and the loss of our own indigenous gas storage capacity.
It also said that “these detrimental changes to UK energy security are compounded by the uncertainty of the future energy arrangements post-Brexit.”
It added that the ‘Beast from the East’ at the start of this year caused a very sharp wholesale price spikes and despite that, very little UK demand side response. It calls this “a real wake-up call that “makes this review even more urgent”.
Roddy Monroe is Independent Chair of the Gas Storage Operators Group, a branch of the EUA. He said: “I firmly believe that there may be serious implications for UK energy security if policy makers rely solely on the market to deliver the right level of investment to meet broader Government’s objectives, including transiting to a low carbon economy and providing access to affordable energy.
“Energy security is underpinned by long life, capital intensive investments which require long term financial certainty; these are not characteristics found in our energy market today.
“We have seen that the Government felt it necessary to intervene to help deliver positive changes to the electricity market, and such intervention may now be necessary for the gas market if we are to provide the right level of gas security.”