Speculation is growing that before MPs break for the summer recess, DECC will make a decision regarding gas storage. Shortly before his brush with the law, Chris Huhne asked Ofgem to report on gas security of supply. In November 2012, they duly did so and made the following conclusion, “we believe, serious consideration should be given to the case for implementing further measures to reduce the impacts of European and global market developments on GB security of supply risk”. In other words, telling DECC they need to do something. The challenge for Ministers, for it is their reputation on the line, is whether they are willing to take the gamble of doing nothing or take the safer route of saying more needs to be done. It is not as if additional gas storage will cost the earth. From figures I have seen, a 3 billion cm gas storage facility with a semi-regulated intervention, would cost approximately 80 pence per household per year. Against that, look at the benefits. At a time when major infrastructure projects are highly desirable, construction jobs will be created (at least 1000); followed by permanent skilled jobs here in the UK. More gas storage should also support lower and more stable energy prices, good for hard-pressed consumers, as well as enhancing UK industrial competitiveness (especially at a time of much cheaper US gas prices for energy intensive users). Given the experience of this winter, when there were real concerns over security of supply and we saw massive price spikes, UK industry does not need the very real threat of demand reductions forced on it because of gas shortages. Michael Fallon should have an easy and safe decision to make. Conversely, pulling the plug on new gas storage is a huge risk, a gamble I can’t believe any politician should be taking – because if the “lights go out” the finger of blame will be pointing in only one direction. Best wishes Mike Foster, CEO
Posted on: Mon, 08 Jul 2013 12:13:38 +0000
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