Forget Putin, the real threat to the UK's energy security is closer to home
4 min read
Vladimir Putin does not have a stranglehold on our gas supplies. But there are real concerns about the UK's future energy security, says Alan Whitehead
On 1 March, as the “Beast from the East” swept across Britain, National Grid issued the first gas alert since 2010. In one day the UK had seen a shortfall of 50 million cubic meters (mcm) of gas. Normal demand at this time of year is 300mcm but, due to the unseasonal weather, projected demand had increased to 395mcm.
As it happened, the high quality protocols in place to source emergency supply and turn down demand meant that nothing untoward happened on the system, but questions have been asked in its wake – is the UK facing a gas supply and security problem? And if so, what needs to be done about it?
In the aftermath of the alert, further questions were asked about the coincidental arrival of three shipments of liquid natural gas (LNG) from Russia, leading to newspaper reports that we are now dependent on Vladimir Putin for gas. That canard can be put to bed straight away. LNG makes up very little of Britain’s gas supplies, almost half of which comes to us either through interconnectors from Norway, Belgium and Holland, with the other half still being supplied via the North Sea.
LNG makes up about 3% of UK supplies, with only a fraction of that coming from Russia. It is not strictly speaking possible to distinguish the exact origin of gas coming through pipelines which are connected across Europe, and while Russia provides about a third of European supplies generally, only about 1% of UK pipeline supply is estimated to be of Russian origin.
So no stranglehold on our gas supplies for Vladimir; but there is a real issue of UK gas security for the future. We can clearly manage supplies during a bad weather episode but, strategically, the UK now has very little storage available. Especially since by far the largest strategic storage site, the depleted Rough field in the North Sea into which large quantities of gas were piped as long-term storage, closed last year. Rough was responsible for about 70% of UK gas storage; now we have some gas stored in hollowed-out salt caverns in Cheshire, but precious little else.
It is argued that continued North Sea gas production, coupled with supplies from reliable fields in Norway and the Netherlands, buttressed by the gas in Britain’s enormous gas grid system, will form an effective strategic buffer, but it is now true that the UK has only a few days of strategic gas supply storage.
So what might we do about it? It is not likely that any commercial storage is on the cards; such ventures would rely on arbitrage – storing gas when prices are cheap and releasing it when they are not. There is unlikely to be a business case here because gas demand is down (bad weather excepting) by about 20% over the last 15 years, and is projected to be further lowered over the next 10 years due to increased energy efficiency and the rise of renewable energy.
It is essentially down to government to commission further gas storage, which could be through further use of salt caverns, or through a new depleted field in the North Sea, perhaps in conjunction with the development of carbon capture and storage technology. We do need to replace at least half the capacity that existed in Rough, and get our number of days of strategic storage up closer to our European neighbours.
There is also considerable mileage, in the longer term, for measures that further lower our demand for gas. Britain’s homes are notoriously poorly insulated and measures to remedy this over the years have been both fitful and inadequate. Doing it properly would, it is estimated, save up to 25% of UK gas demand. Perhaps the best way of ensuring our energy security is to not need it in the first place.
Gas demand has fallen and will continue to do so. Accelerating that decrease by insulating homes and at the same time prudently setting a little more by for strategic purposes looks to be the right course of action for the future.
Dr Alan Whitehead is Labour MP for Southampton, Test and Shadow Energy Minister.
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