No new gas storage

The government has announced that it will not be investing in new gas storage facilities, stating this will save around £750 million over 10 years.

It commissioned independent analysis from Redpoint, which showed the UK gas market continues to function well to meet current and future demand.

Gas storage provided just 7 per cent of total UK supply in 2012.

Current capacity allows for twice the amount of gas required in a normal winter, with no problems reported during the last winter and early spring this year.

The importance of gas storage is recognised by the government for providing flexibility within the system and helping when demand is high.

Ministers had considered whether intervening in the gas market to encourage more gas storage could improve security of supply without adding disproportionate costs to energy bills.

However, the analysis showed that the costs of intervention would far outweigh any benefit, resulting in government and consumers subsidising investment that large energy companies could pay for themselves