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Could energy prices rise following closure of Rough gas storage?

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Centrica, the UK’s largest supplier of household gas, has sparked fears of an energy price rise after announcing that Rough - Britain’s largest gas storage facility - will be temporarily shut down. Originally the closure was scheduled to last only 42-days for a structural investigation, but Centrica has estimated a revised completion date of April 2017.

The extended closure of Rough – a facility responsible for two-thirds of our country's gas storage - has led to concerns about Britain's gas reserves heading into the colder months.

The shutdown follows reductions introduced by Centrica in March last year, which cut down on the amount of gas that could be stored at Rough due to concerns over the safety of some of the storage wells.

The initial investigation uncovered potential issues with further wells leading to an extended closure period.

While UK gas supplies are supplemented by imports from Norway and the continent, news of the  possibility of the country entering winter with a much lower than normal gas inventory has already caused wholesale gas prices to significantly increase.

With gas at a premium, we could well see an increase in business and domestic energy prices.

Stay tuned for our next update with more on the potential impact this closure could have for business and domestic energy customers.

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