
Centrica executives have met with energy secretary Ed Miliband to discuss the future of the Rough gas storage facility in the North Sea.
The UK energy company’s group chief executive Christopher O’Shea and the managing director of Centrica Energy Storage Martin Scargill recently attended a meeting with Miliband and others at the Hull Chamber of Commerce.
“We’re in discussions with [government] at a high level to find a way to keep Rough open as a key strategic asset for the UK,” O’Shea said.
“I can’t go into any details of the discussions but I am hopeful that HMG (Her Majesty’s Government) will be able to move quickly enough to enable this crucial asset to remain open.”
He indicated in February that Centrica was yet to decide on a direction for the Rough gas storage site, after the company revealed an anticipated loss at Centrica Energy Storage, stating that “as it currently stands, we wouldn’t be refilling it”.
The owner of the country’s largest gas storage facility is seeking to refit the asset as part of a £2 billion refurbishment so that it can function as a hydrogen storage facility. Centrica has said that it is seeking to secure a cap-and-floor mechanism to operate the asset.
At the height of the energy crisis, the licence to operate the Rough gas storage facility was renewed, but it is now due to expire in 2030.
A spokesperson for the Department for Energy Security and Net Zero (DESNZ) said that the discussions did not go “into detail”, but that the government’s position “remains what it was before”.
“We’re not providing updates on what that will look like but we’re having discussions with Centrica about it. Everything’s on the table on what the future would be just as long as it provides value for money,” the spokesperson said.
The DESNZ spokesperson did not rule out a possible financial subsidy for the facility to continue to operate as a natural gas facility beyond 2030, or discussions around other subsidies aside from a cap-and-floor mechanism.
“If it was gas storage it would help meet net zero targets as well,” the spokesman said, citing the government’s target including up to 5% unabated gas.
He said that extending the licence for the Rough gas storage facility would be up to the North Sea Transition Authority (NSTA) to approve.
Chris Stark indicated at a committee hearing in January that the government is looking to provide incentives for hydrogen storage beyond 2030.
The boss of Mission Control, who is tasked with implementing the UK’s clean power plan, admitted that there was no “policy framework in place” to support the as-yet-unproven hydrogen storage industry.
Several gas companies have partnered on a hydrogen boiler trial in Fife, Scotland, which had yet to receive safety approvals last month despite the associated network being installed.