How to turn an energy shortfall into windfall
It’s been a tough time for the UK’s energy suppliers with freezing weather, wobbles in North Sea gas deliveries and a huge roll-out of offshore wind dominating headlines. Anna Blackaby looks at the energy challenges and opportunities this presents for West Midland businesses.
Manufacturers and large-scale energy users in the West Midlands have had a nervous few days as they watched an energy drama unfold, the likes of which has not been seen since the 1970s.
Warwick-headquartered National Grid has been at the eye of this icy storm, with freezing conditions in the North Sea sparking four “gas balancing alerts” – a hitherto rare declaration that demand for gas is likely to outstrip supply.
Although the West Midlands was spared the plight of some firms in the North West and East Midlands on interruptible contracts who saw their gas supply frozen, there will be many industrial users in the region who are keeping a watchful eye on developments, mindful of how they will keep their factories running should the worst-case scenario materialise.
The Engineering Employers Federation (EEF) in the West Midlands said although none of the region’s firms were hit by gas shortages last week, there were a number of manufacturing companies on interruptible contracts which could be at risk of similar problems.
It called for the government to urgently look at the issue of gas storage – which in the UK is a far lower percentage of demand than in other European countries.
Stuart Richie of the EEF said: “This confirms what we have been saying for a while, that people are being complacent about their supplies of energy.
“It was the fact that we are having to increase imported gas which led to the disruption in our supplies.
“If we had more storage in the UK it would not be as bad.
“The government needs to urgently review the operation and ensure that adequate storage facilities are built and stocked going forward.”
Mr Richie’s comments were echoed by Steve Feeley, regional director for the Institution of Civil Engineers in the West Midlands.
He said: “To avoid energy crises and price hikes in the future the UK energy sector must urgently build extra gas storage capacity into the network.
“We simply cannot continue to rely on unpredictable overseas supplies. To achieve this, the regulation of the UK gas industry must be adapted to reflect our gas storage requirements.”
Coventry-based E.ON Gas Storage UK is currently creating a new gas storage facility in Cheshire and has applications for planning consent for other schemes elsewhere in the country.
Michael Cooper, senior project manager with the firm, explained how the location of storage facilities was dependent on the geology of the area, meaning the West Midlands has no potential for gas storage locally.
“The West Midlands has a few gasometers but you couldn’t really use them for gas storage in a cold spell like this.
“Gas is stored under the ground.
“We are building an underground gas storage facility at the moment where we are drilling holes and dissolving great caverns out of the salt underneath Cheshire.
“We have very limited areas with suitable geology in the UK compared with other countries in Europe – we are limited to Cheshire, Lancashire, the East coast near Hornsea and some deposits off the coast of Dorset.
“What we are creating are a series of underground caverns about 700 metres below the surface. When they are finished these caverns will hold enough gas for half a day’s UK supply.
