UK has ‘less than a week’ of gas stores, says Centrica

Stay informed with free updates

Simply sign up to the UK energy myFT Digest — delivered directly to your inbox.

The UK has “less than a week” of gas reserves in store as plunging temperatures strain supplies, according to the owner of energy company British Gas.

Inventories at gas storage sites were, as of Thursday, 26 per cent lower than at the same point last year, Centrica said on Friday, leaving them roughly half full and at “concerningly low” levels.

Britain’s cold snap, during which temperatures have fallen to close to minus 20C in places, has led to increased heating demand from households, most of which rely on gas.

The drop in temperatures, which is forecast to last into the weekend, also comes less than two weeks after Russian gas flows to Europe via Ukraine ended.

“The UK has less than a week of gas demand in store,” Centrica said in a statement on Friday.

“We are an outlier from the rest of Europe when it comes to the role of storage in our energy system and we are now seeing the implications of that,” added chief executive Chris O’Shea.

Britain has much lower storage capacity compared with countries in mainland Europe, leaving it more vulnerable to surges in demand for gas.

European states are also interconnected with a vast network of pipelines, allowing flexible supplies between countries.

About half of Britain’s gas needs are met by imports at present, and domestic gas prices have risen almost 20 per cent since the start of the winter.

The UK competes with mainland Europe for gas and liquefied natural gas supplies, and its gas prices need to be at a meaningful premium to European prices to incentivise traders to send gas to the UK.

Centrica is lobbying for government support to invest in and upgrade its Rough gas storage site so it can store hydrogen in the long term.

The facility off the Yorkshire coast is the biggest in the UK. It closed in 2017 but partially reopened in 2022 at the request of the previous Conservative government at the height of the energy crisis triggered by Russia’s full-scale invasion of Ukraine.

The energy supplier has said it is ready to invest £2bn to upgrade and redevelop the site, but wants the government to introduce a “cap and floor” mechanism to supports its revenues.

O’Shea claimed that if Rough “had been operating at full capacity in recent years, it would have saved UK households £100 from both their gas and their electricity bills each winter”.

The current level of regulator Ofgem’s energy price cap, which runs until March, means a typical household is paying £1,738 a year for gas and electricity, compared with £1,717 at the end of 2024.

Natasha Fielding, head of European gas pricing at pricing agency Argus Media, said the UK could either import more LNG or pipeline gas from mainland Europe through two large pipelines. But “they all require the UK gas price premium to the EU to grow even more”, she cautioned.

National Gas, which owns Britain’s main transmission network, said “the overall picture across Great Britain’s eight main gas storage sites remains healthy”.

“Britain obtains its gas from a diverse range of sources . . . meaning we are well placed to respond to demand this winter,” it added. 

The Department for Energy Security and Net Zero said it had “no concerns” and was “confident we will have a sufficient gas supply and electricity capacity to meet demand this winter”.

“We are committed to designing a new business model for hydrogen storage infrastructure. Prospective projects will have the opportunity to apply for support and more information will be provided in due course,” it added.