Gas storage facility might shut with out authorities assist, Centrica boss warns | EUROtoday

The UK’s largest fuel storage facility could possibly be closed if the federal government doesn’t assist help a redevelopment of the location, the boss of the corporate which owns it has informed the BBC.

Centrica chief govt Chris O’Shea informed BBC One’s Sunday with Laura Kuenssberg programme that its Rough storage facility could be “shut down” with out authorities assist over vitality pricing.

Centrica – which owns British Gas – says the location is ready to lose £100m this 12 months, and it desires to speculate £2bn within the facility so it will possibly use it to retailer extra fuel, together with hydrogen.

The authorities stated the way forward for Rough was a industrial determination for Centrica however it was open to discussing proposals.

The Rough facility is off the coast of East Yorkshire, and accounts for about half of the capability the UK has to retailer fuel.

It was closed in 2017, however then partly reopened in October 2022 following the vitality disaster triggered by Russia’s invasion of Ukraine.

Earlier this month, Centrica stated it was in “constructive discussions” with the federal government for a help mechanism that may permit funding within the Rough website to proceed.

The firm is in search of a “cap and floor” pricing mechanism. This signifies that if vitality costs fall beneath a sure degree its revenues shall be topped up, however costs could be capped in the event that they rise too excessive.

“What we’re asking for is simply for the government to help create the conditions which will unlock £2bn of investment,” Mr O’Shea informed the BBC.

“It will create thousands of jobs in the construction phase, and it will safeguard the jobs of very highly skilled colleagues that are offshore.”

Without this funding he stated the location could be decommissioned “and we’ll lose this resilience”.

He stated the UK presently has 12 days of fuel storage, of which Rough gives six.

“So if we don’t have Rough anymore, then we go down to six days. Now, if we take Rough to full capacity, we will go up to about 25, or 30 days.”

A Department for Energy Security and Net Zero spokesperson stated whereas the way forward for Rough was a industrial determination for Centrica, “we remain open to discussing proposals on gas storage sites, as long as it provides value for money for taxpayers”.

Last week, Mr O’Shea stated the way in which that the vitality pricing mechanism labored meant that constructing of renewables wouldn’t “materially” scale back UK electrical energy costs from present ranges.

He informed Laura Kuenssberg on a go to to the North Sea platform that decarbonisation was vital and in addition a “huge economic opportunity”.

However he added that “the price we see today for electricity is the same as the price that we’re given to new renewable developments”.

“Therefore, that new renewable development will not bring down the price.”

He added that he thought the federal government’s 2030 goal for clear vitality was “very challenging, but I think it’s right that the energy secretary has set a very stretching target”.

“It’s not impossible, no, but it’s not easy.”

The Department for Energy Security and Net Zero stated: “As shown by the National Energy System Operator’s independent report, our mission for clean power by 2030 is achievable and will deliver a more secure energy system, which could see a lower cost of electricity and lower bills.”

Last 12 months, Mr O’Shea informed the BBC that the £4.5m pay he acquired the earlier 12 months was “impossible to justify”.

And earlier this month, almost 40% of Centrica’s shareholders voted in opposition to the corporate’s newest pay plans.

When requested about this by Laura Kuenssberg, Mr O’Shea stated: “I don’t set my own pay.

“I feel it is actually troublesome,” he said. “I’m unbelievably lucky. I’ve a job the place the market charge is is greater than ever thought I’d have accomplished.”