The boss of Centrica has warned that the UK’s largest gas storage facility will be shut down unless the government steps in to support a £2 billion redevelopment.
In an interview on BBC One’s Sunday with Laura Kuenssberg, Centrica CEO Chris O’Shea said the Rough site, which accounts for half our gas storage, is on track to lose £100 million this year.
“So inevitably what will happen is that this asset will be decommissioned,” he said.
Rough, located off the coast of East Yorkshire, was closed in 2017 but partly reopened in 2022 after Russia’s invasion of Ukraine triggered an energy crisis.
It currently provides six of the UK’s 12 days of gas storage.
Without it, capacity would halve. O’Shea says expanding Rough to full scale could boost that to “25 or 30 days”.
Mr O’Shea said the company was “not asking for any government money”.
What we’re asking for is simply for the government to help create the conditions which will unlock £2bn of investment. It will create thousands of jobs in the construction phase, and it will safeguard the jobs of very highly skilled colleagues that are offshore.”
Chris O’Shea, CEO
Centrica is seeking a “cap and floor” pricing mechanism – protecting revenues if market prices fall too low, while capping them if they spike.
It’s the same model used for interconnectors and some other infrastructure projects.
O’Shea also said the site could become “the world’s single largest hydrogen storage facility”, adding there’s “a huge saving to consumers” from keeping it open.
The government said the future of Rough is a commercial decision for Centrica but a spokesperson confirmed it was “open to discussing proposals on gas storage sites, as long as it provides value for money for taxpayers”.
O’Shea also told the BBC that while renewables are vital for decarbonisation, current pricing means they “will not materially reduce UK electricity prices”.
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