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The UK has “less than a week” of gas reserves in stock, as falling temperatures strain supplies, according to the owner of energy company British Gas.
Inventories at gas storage sites, as of Thursday, were 26 percent lower than in the same period last year. central on Friday, leaving it about half full and at “worryingly low” levels.
The cold wave that Britain witnessed, during which temperatures dropped to nearly 20 degrees Celsius below zero in some places, led to an increase in demand for heating from homes, most of which depend on gas.
The drop in temperatures, which is expected to continue until the end of the week, comes less than two weeks after Russian gas flows to Europe via Ukraine stopped.
“The UK has less than a week of gas demand,” Centrica said in a statement on Friday.
CEO Chris O'Shea added: “We are falling behind the rest of Europe when it comes to the role of storage in our energy system, and we are now seeing the effects of that.”
Britain has much less storage capacity compared to continental European countries, making it more vulnerable to high demand for gas.
European countries are also connected by an extensive network of pipelines, allowing for flexible supplies between countries.
Imports currently meet about half of Britain's gas needs, and domestic gas prices have risen by about 20 percent since the beginning of the winter.
The UK competes with mainland Europe for gas and LNG supplies, and its gas prices must be significantly higher than European prices to incentivize traders to send gas to the UK.
Centrica is lobbying for government support to invest in and upgrade a raw gas storage site so it can store hydrogen long-term.
The facility, located off the Yorkshire coast, is the largest in the UK. It was closed in 2017 but partially reopened in 2022 at the request of the previous Conservative government at the height of the energy crisis caused by Russia's large-scale invasion of Ukraine.
The energy supplier said it was prepared to invest £2bn to upgrade and redevelop the site, but wanted the government to introduce a “cap and bottom” mechanism to support its revenues.
O'Shea claimed that if Rough had been “fully operational in recent years, it would have saved UK households £100 on gas and electricity bills every winter”.
Current level of regulator Ofgem Energy price ceilingwhich runs until March, means the typical household pays £1,738 a year for gas and electricity, compared to £1,717 at the end of 2024.
Natasha Fielding, head of European gas pricing at pricing agency Argus Media, said the UK could either import more LNG or pipeline gas from mainland Europe via two large pipelines. But she warned: “They all require the UK gas price premium to the EU to grow further.”
The Department for Energy Security and Net Zero said it had “no concerns” and was “confident that we will have sufficient gas supply and electricity capacity to meet demand this winter, due to our diverse and resilient energy system”.
“We are committed to designing a new business model for hydrogen storage infrastructure. Potential projects will have the opportunity to apply for support and more information will be provided in due course.”
