Centrica, the owner of British Gas, has suspended gas injections into the UK’s largest gas storage site in the North Sea, heightening fears of potential winter shortages and rising household energy bills.
The company has paused operations at the Rough storage facility off the coast of Yorkshire, citing concerns over the site’s financial sustainability.
Centrica is currently seeking government support, including a potential pricing mechanism, to ensure the site remains commercially viable.
Rough accounts for approximately 50% of Britain’s total gas storage capacity and plays a critical role in maintaining energy security during cold, windless spells when gas demand spikes — both for heating and electricity generation.
The facility, which was reopened by Centrica in 2022 at the Government’s request during the height of the energy crisis, is reportedly running at a loss.
In December, Centrica revealed its storage division was losing between £50 million and £100 million, primarily due to stabilised gas prices that make storage uneconomical.
Forecasts indicating a limited price differential between summer and winter gas have led Centrica to halt refilling Rough, as the economics no longer support continued injections.
Discussions are now underway between Centrica and the Department for Energy Security and Net Zero (DESNZ), with reports confirming that Energy Secretary Ed Miliband met Centrica executives in March to explore options for safeguarding the site’s future.
A DESNZ spokesperson said the Government remains “open to discussing proposals on gas storage,” but stressed that any arrangement must ensure value for money for taxpayers.
While gas is projected to comprise around 5% of the UK’s energy mix by 2030, it remains essential for short-notice generation to stabilise the grid during peak demand or when renewable output dips.
Rough’s storage capacity has expanded from 30 billion to 54 billion cubic feet since its reopening, currently capable of meeting the UK’s energy needs for up to six days.
However, Britain’s overall gas storage infrastructure remains limited, offering just 12 days of reserve capacity — far behind Germany (89 days) and France (103 days).
Analysts warn that the UK faces a more precarious winter ahead, with reserve capacity forecast to fall below levels seen during the previous two years, particularly if temperatures drop and renewables underperform.
Centrica has proposed a ‘cap-and-floor’ funding model backed by a consumer levy, allowing it to invest £2 billion in redeveloping Rough as a hydrogen storage site. This would involve extensive upgrades, including new wells and infrastructure.
Chris Stark, recently appointed to lead the UK’s net-zero efforts, confirmed earlier this year that the Government is evaluating regulatory frameworks to support hydrogen storage by the end of the decade.
Centrica’s CEO, Chris O’Shea, has stated that the firm is still weighing its options for the long-term future of Rough.
Originally a gas-producing field, Rough was converted into a storage facility before being decommissioned in 2017 and later revived amid the 2022 energy crisis.
In November 2024, it recorded its highest storage level since its reopening.
