Page 29 - October 2019

significant shortage event occurred in commercially reduce load/disconnect reductions in gas prices, LNG imports,
March 2018 after a ‘perfect storm’ of as they can either avoid the high gas high competition between Russia
freezing weather (the Beast from the costs or else benefit by reselling their and the US to supply Europe and
East) created gas supply problems. The gas. In combination, this led to the a changing fuel mix meaning less
cold weather ramped up gas demand in event being a more commercial hit than defined summer/winter demand
both GB and mainland Europe and this one causing widespread disruption. At profiles, this is no longer the case.
simultaneously occurred at a time of the time of the event, there was a lot of It is increasingly challenging for
gas terminal and pipeline infrastructure market commentary on how the closure existing storage to remain profitable
problems in GB and Europe, which of the Rough storage facility (GB’s largest and it is even more difficult to build a
reduced overall supplies into the gas storage asset) had exacerbated the commercial case for the construction
system and flows into GB. problem as gas in store was at its lowest of new facilities or to invest in life
Unlike the electricity network, the recorded level during the incident. extension on existing facilities, as
inherent storage in a gas network gives Gas storage has always been seen evidenced by the closure of Rough. At
more time for system operators (and the as a strategic resource but also a the moment, the market and European
market) to respond in these situations resource that, with a ‘spread’ between governments and system operators
and consequently disconnection summer and winter fuel prices, can do not have a system to pay for the
happens in a less automated way. In operate commercially, deriving an ‘insurance’ value of storage.
addition, increased market prices for income to fund its initial construction This contrasts with the electricity
gas cause large industrial users to and ongoing operation. With overall market, where GB and Ireland along

29

UKPowerCuts.indd 2 19/09/2019 12:42