Centrica, the parent company of British Gas, has warned that the UK’s largest gas storage facility, Rough, could be closed without government support for its redevelopment. This was revealed by Centrica CEO Chris O’Shea in an interview with the BBC.
O’Shea stated that Rough is projected to lose £100 million this year and requires a £2 billion investment to expand its capacity and accommodate hydrogen storage. He emphasized that without government assistance, the facility will be shut down.
Centrica is seeking a government-backed “cap and floor” pricing mechanism to mitigate financial risks associated with fluctuating energy prices. This would guarantee revenue stability, enabling the significant investment needed.
The government responded that Rough’s future is ultimately Centrica’s commercial decision, but it remains open to discussions regarding viable proposals that represent value for taxpayers.
Located off the coast of East Yorkshire, Rough currently accounts for approximately half of the UK’s gas storage capacity. It was partially reopened in 2022 following the energy crisis triggered by the Ukraine conflict, after being closed since 2017.
O’Shea highlighted the critical role of Rough in the UK’s energy security, stating that its closure would reduce the nation’s gas storage capacity from 12 days to a concerning six. Full redevelopment, he explained, could increase this to 25-30 days.
He further argued that the requested government support would not only safeguard existing highly skilled jobs but also create thousands of new jobs during the construction phase. The investment, he stressed, is vital for maintaining energy resilience.
The Department for Energy Security and Net Zero reiterated its openness to proposals, emphasizing the need for value for money for taxpayers. Separately, O’Shea addressed the government’s 2030 clean energy target, acknowledging its ambition and challenges, while also commenting on the current structure of energy pricing which may inhibit the impact of new renewable energy developments on consumer bills. He noted that despite the challenges, achieving the ambitious 2030 target was not impossible.
The interview also touched upon O’Shea’s previous comments regarding his high salary and the recent shareholder vote against Centrica’s pay plans, with O’Shea stating that he doesn’t set his own remuneration.
Experts say the UK has enough gas after Centrica said storage levels were “concerningly low”.
Albert Taylor says his fight for a British Gas refund was like “banging my head against a brick wall”.
Yeovil Athletic Club is “futureproofed” with the latest in technology in a bid to reduce running costs.
The firm told a man it was sending his details to a debt collector over an incorrect £2,500 bill.
Centrica says it is installing four ultra-efficient hydrogen-ready engines at its site in Brigg.