National Grid has published its annual Gas Ten Year Statement (GTYS), providing details on how the country’s gas transmission system will be operated and developed over the next ten years.
The report hints at new developments in the storage sector, which have been strongly impacted by the events at Rough in the last year.
Rough storage closure
The closure of the Rough long-range storage site in June has been a major development in the UK’s gas network during 2017. The site had been operating at reduced capacity since 2015 while work was carried out on-site. This has accelerated the conversation surrounding UK storage facilities in the future, and ensuring flexibility of supply. So far this winter, the UK has relied heavily on imports from Norway, Belgium and the Netherlands to meet high demand. While this has kept the system balanced, it is a move which requires a price premium over our Continental neighbours.
Medium-range gas storage
In the GTYS, National Grid acknowledge the development of some medium-range storage facilities in the last three years, Hole House Farm and Hill Top. However, the operator has confirmed economics – in particular the narrow price difference between winter and summer contracts – make the development of new storage sites “challenging”.
That being said, there are proposals for around 9 billion cubic meters of storage capacity across seven sites, covering medium-range and long-range seasonal storage cycles. All the proposed sites have been granted planning permission, but have not received a Final Investment Decision (FID). Project Deborah off the coast of Bacton has a proposed capacity of 4.6bcm, approximately the same size of Rough when the site was fully operational.
Five smaller sites planned to operate on a medium-range basis, including one site in Northern Ireland, have a combined capacity of 2.6bcm. This is double the current medium-range storage capacity in the UK.
|Gateway||Stag Energy||Offshore Morecambe Bay||1.5||Planning granted, no FID|
|Deborah||Eni||Offshore Bacton||4.6||Planning granted, no FID|
|Island Magee||InfrasStrata||Country Antrim, Northern Ireland||0.5||Planning granted, no FID|
|King Street||King Street Energy||Cheshire||0.3||Planning granted, no FID|
|Preesall||Halite Energy||Lancashire||0.6||Planning granted, no FID|
|Saltfleetby||Wingaz||Lincolnshire||0.8||Planning granted, no FID|
|Whitehill||E.ON||East Yorkshire||0.4||Planning granted, no FID|
It remains to be seen if any of these proposed sites will reach construction and operation and there are a range of factors that will decide if the projects are developed, including market economics and assessing how the UK manages demand during the upcoming winter seasons without a long-range storage facility.
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