Posted: 6 March 2015
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Storage solution

Britain’s gas transmission system, and its 7,600km of pipelines, play a vital role in keeping our homes and businesses running. One important aspect of the system is the network of 10 gas storage sites that act as an ‘insurance policy’ on security of supply. Paul Gallagher, National Transmission System Optimisation Manager, explains how and why we store gas.

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Storage solution

Storage solution

A graphic showing the journey from the National Transmission System through pipelines to the Local Distribution Zone (LDZ) which ensures National Grid deliver gas to homes safely and efficiently.

"About 9% of all gas supplied into Great Britain is put into storage for use at a later date and there is enough gas in storage to meet roughly 6% of our annual consumption."

Paul Gallagher, National Transmission System Optimisation Manager.

Insight:

The National Transmission System features seven ‘beach’ reception terminals, 3 LNG importation terminals, three interconnectors, 10 storage sites and 23 compressor stations.

Source: National Grid.

Every year some 85 billion cubic metres of gas is channelled through the National Transmission System (NTS) to meet the energy needs of households, heavy industry and businesses large and small. Of course, supply cannot match demand exactly, so we need to be able to store gas so that it can be used when demand is high or when prices rise.

About 9% of all gas supplied into Great Britain is put into storage for use at a later date and there is enough gas in storage to meet roughly 6% of our annual consumption.

It’s also important to put the role of storage into context. It gives the UK a buffer against risk, in terms of potential supply issues or rising prices. It is an important contributor to the overall UK supply picture – but is just part of the diverse supply portfolio available in the UK which underpins our security of supply despite the scare stories about depleted stocks of gas that sometimes appear in the media.

How GB gas storage works

There are 10 storage sites that act as both supply to the NTS and demand, because they can inject gas into storage (demand) and withdraw gas from storage to boost supplies. Each has different business models depending on their capabilities and gas can be stored there for a number of years if needs be.

There is one long-range storage site called Rough, which is situated offshore in the North Sea with a connection to Easington terminal on the East Yorkshire coast. Rough is by far the largest site, with a capacity of up to 35TWh of gas – more than the nine other sites combined. It can also run uninterrupted for long periods of time, for example by injecting gas into the system for 90 days consecutively, if required.

We then have eight medium-range storage sites on the NTS, which have shorter injection/withdrawal times so that they can operate on a timely basis, depending on the demand and supply needs of the NTS at any given time.

Finally, Avonmouth is the last short-range storage site on the NTS and is the only one currently owned by National Grid, which is for historic reasons. The site was built to give added security of supply for customers at the extremities of the network at a time when the system didn’t have the resilience it does today. It is due to close in 2016 as storage is instead focused on the medium and long-range facilities.

Who owns and runs the sites?

The gas storage sites are commercial enterprises and, with the exception of Avonmouth, they are all independently owned and operated. Decisions on how much gas they store and when it is used are driven by the shipping industry whose aim is to match supply and demand by emptying or filling these storage facilities in response to demand and pricing.

National Grid’s role, in addition to managing the NTS on a day-to-day basis, is to provide market intelligence in the form of demand forecasting. Every year our Future Energy Scenarios describe plausible outcomes for supply and demand out to 2035 and 2050, including those for the gas market.

Our 10-year Network Development Plan sets out how we are investing in and strengthening the NTS, while we also publish the Winter Outlook, which brings together our own analysis of supply and demand, together with feedback from an extensive dialogue with stakeholders.

Gas storage in context

Gas storage capacity should be seen in the wider context of how gas is supplied into Great Britain. Historically, of course, we relied very much on gas supplies from the North Sea, which in part explains why our storage capacity is significantly smaller than that of France or Germany; two countries with little indigenous supply to rely on.

Today our gas comes from many sources: the North Sea, Norway, interconnectors to the Netherlands and Belgium, plus supplies from mainland Europe. Factoring in imports of liquefied natural gas plus the gas that we have in storage provides a strong supply portfolio.

So, do we need more storage in the UK? There’s been a lot of debate about this: Two medium range sites have been constructed and commissioned over the last 12 months and a number of large developments have been proposed but have not been progressed to date due to concerns by developers over the underlying economics. A review last year examined the case for subsidising strategic storage for gas but concluded that it was not necessary because of the healthy diversity of supply that exists.

So, in conclusion, having adequate gas storage in place is a good thing for Great Britain because it gives us the flexibility to use stocks when demand or higher prices make it sensible to do so. In essence, storage is another tool that helps to keep the gas flowing 365 days a year.

Looking ahead to FES 2018