As bad as this coming winter may be for Europe’s energy supplies, the winter of 2023/2024 may be worse.
In the latest Capital Letter, I wrote about the possibility that the U.K. might face blackouts this winter. It’s hardly the only European country to be in this position, but with its combination of climate fundamentalism and botched planning (but I repeat myself), the U.K. has been, along with Merkel’s Germany, something of a standout. It’s important to note that the country’s approach to climate policy was something that enjoyed (and enjoys) wide cross-party support. The decision to press ahead to net-zero greenhouse-gas emissions by 2050 was waved through without costing or opposition. Theresa May saw it as a glorious part of her legacy, which tells you almost everything you need to know about her disastrous premiership.
It was also under May that the decision was taken to junk most of Britain’s (inadequate) natural-gas storage. After all, with reliable renewables at home and reliable Russians supplying so much of Europe’s gas (although very little of the U.K.’s), what could go wrong?
In that Capital Letter, I referred (none too flatteringly) to the joint decision by the British government and the operator of the U.K’s largest gas-storage facility that it was not worth spending the money on repairs needed to keep it open. In describing the decision, I included a link to a piece by the Daily Telegraph’s Ben Marlow.
To get a feel for the sheer stupidity of that move, it’s worth turning directly to Marlow:
The decision to close Rough, Centrica’s giant natural gas storage site under the North Sea in 2017, ranks as one of the most short-sighted and reckless acts that any recent Government has committed.
The move stripped Britain of a key line of defence during shortages, leaving it dangerously vulnerable to the whims of Vladimir Putin.
The site, which lies 18 miles off the east coast of Yorkshire and more than a mile under the seabed, accounted for about 70pc of Britain’s gas storage capacity and was capable of holding enough to supply homes and businesses for about 10 days during winter. It is now being hurriedly rebooted, possibly at vast cost to the taxpayer if ministers agree to a request from Centrica to provide long-term financial support for the facility.
In the Capital Letter, I noted that this rebooting would not make much of a difference this winter, and here’s the Daily Telegraph’s Rachel Millard with more on that (emphasis added to highlight an extra twist to this tale):
The Rough gas storage site is set to make a minimal contribution to Britain’s energy security this winter, as talks drag on between its owners and the Government over a long-term funding deal.
Chancellor Kwasi Kwarteng opened talks with the FTSE 100 company Centrica in late spring when Mr Kwarteng was the then business secretary over re-opening the North Sea cavern this winter amid a scramble to bolster energy supplies amid Russia’s war on Ukraine.
Chris O’Shea, chief executive of Centrica, said earlier this year the site could be restored in time for winter, albeit at well below full capacity with plans to significantly increase its capacity next winter as part of a phased approach.
However, the site is yet to get up and running and has not been factored into National Grid’s winter outlook for gas supplies, amid expectations it could at most supply less than one percent of peak demand this winter . . .
With little storage of its own, Britain has been exporting record amounts of gas to Europe over the past few months as countries on the continent try to fill up their storage tanks ahead of winter.
However, the UK typically needs to buy gas back from Europe in the colder months. There is no guarantee it can do this, if supplies on the continent run short.
Oh yes, there’s this reminder too:
While Rough may be of little help this winter, industry executives have highlighted the severe threats to supplies next winter when gas stocks will need to be refilled with even less Russian gas than they had this year.
“Government may have underestimated that a bit,” said an industry source.
As bad as this coming winter may be for Europe’s energy supplies, the winter of 2023/2024 may be worse, as there will, as Millard alludes to, be little or no Russian gas available to fill European gas-storage facilities depleted this winter.