MPs issue gas storage warning as reserves decrease

A report by the Commons Energy and Climate Change Committee warned yesterday that the UK can only store enough gas for 14 days, compared to France’s 87 days and Germany’s 69 days, and should double this by 2020.

The committee criticised the Government for making an “opportunistic raid” on UK continental shelf oil and gas producers with a £2bn levy in the 2011 Budget, warning such actions could damage investor confidence in home-grown fossil fuel production.

However, yesterday’s report on energy security said decreasing supplies from UK offshore oil and gas fields would not threaten the UK, as long as the Government has a strategy for ensuring diverse sources of power that does not rely too much on fossil fuels from unstable parts of the world or a single technology at home.

The report said new electricity generation currently planned or being built would fill the looming “gap” in the power system as ageing plants close before 2018.

However the MPs called for more effort to promote greater energy efficiency to reduce demand, and warned the Government against relying on power companies to promote saving energy as consumers did not trust them.

The MPs also warned of problems in juggling energy security with policies to cut climate emissions and keep energy affordable.

For example, cutting emissions from electricity generation could lead to issues with a lack of gas storage, the need to deliver technology which captures carbon, and a greater reliance on intermittent renewables, which could push up consumer bills.

Greater energy efficiency will be “vital” not only for improving energy security, but for reducing the impact of expected rises in consumer bills, the report said.

Tim Yeo, chairman of the committee, said: “The UK will become more dependent on energy imports as North Sea oil and gas declines but prudent planning can ensure this doesn’t reduce our energy security too drastically.

“To keep the lights on and our transport moving we need a diverse energy portfolio that does not rely too heavily on fossil fuels from unstable parts of the world or any single technology at home.

“Fortunately the UK is already reasonably energy secure, but encouraging investment in gas storage and insulating more homes will improve our position and help to reduce the impact of global energy price rises.”

He added that the Government could be doing more to reduce energy waste.

“It needs to look at how it can use building regulations and energy efficiency standards for electrical appliances to cut waste and save cash on people’s energy bills.”

The MPs said the plans for the standard, which would be reviewed in 2015, would lead to a “hectic dash-for-gas” before then which could lock the UK into a high-carbon future.