UK ministers rule out gas storage subsidies

Subsidies for gas storage have been ruled out by UK Ministers as a ‘waste of money’, according to the Telegraph.

Ministers insist that the level of supply currently available is sufficient. Furthermore, the decision not to subsidise will save £ 750 million over the next ten years.

Despite this, Michael Fallon said in an interview with the newspaper that he did want to see more small rapid-response storage facilities built. However, he believes that companies would invest in them now that the government has clarified its policy.

Britain currently has the capacity to hold approximately 15 days worth of national gas demand in storage. This is a much lower sum than elsewhere in Europe and the US.

Many companies and officials in the industry disagree with the government’s decision. Centrica said it was ‘disappointed’. Sam Laidlaw, the company’s chief executive, told the Telegraph in July that subsidies would be a prudent insurance policy against storage levels falling uncomfortably low.

Rob Hastings, director of energy and infrastructure at the Crown Estate, insisted earlier this year that the UK was hours from running out of gas in March.

In contrast, Fallon insists that reports of Britain being close to running out of gas were ‘misleading’. ‘They certainly don’t justify spending nearly three quarters of a billion pounds’, he said.

Edited from various sources by Emma McAleavey.

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/07102014/storage-subsidies-ruled-out-1359/