National Grid Ten Year Statement

National Grid Ten Year Statement

National Grid has published details on how the UK’s gas transmission system will be operated and developed over the next ten years.

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.

Planned storage

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.

Project Developer Location Capacity (bcm) Status
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
Total 8.7

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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Veronica Truman

Posted by on Wednesday, the 13. December at 11.31

Veronica Truman has been working in the energy industry since 2002 and currently manages the Market Intelligence, Analytics and Bureau Teams for Utilitywise. These teams are responsible for bespoke strategic consultancy projects for their clients, as well as delivering detailed analytics on clients’ consumption data. In addition to this, the Analytics team have developed models to forecast commodity and non-commodity charges out to 2040, and a market-leading Triad forecasting model.