An ambitious plan to significantly enhance the UK’s gas storage capacity has been proposed by Irish energy entrepreneur Tony O’Reilly Jr.. His company, Dcarbonx, aims to redevelop a former gas extraction site in the Irish Sea, off the coast of Barrow-in-Furness, into a facility that could increase the UK’s gas storage capacity by over 50 per cent. This initiative is part of a larger £830 million megaproject designed to bolster national energy security amid growing concerns about reliance on global gas markets.
O’Reilly, who is the son of the renowned billionaire and former Heinz executive of the same name, emphasized the project’s potential to protect the UK from the volatility of global gas prices and the intermittency of renewable energy sources. “Without domestic gas storage, the UK is exposed to global gas market volatility, especially during winter,” he stated. “The question isn’t whether we need more storage; it’s whether we’re serious about building it.”
The announcement coincides with an anticipated government consultation regarding Britain’s gas system resilience. This consultation aims to assess the nation’s storage needs, particularly as natural gas continues to play a vital role in the UK’s energy mix, contributing 29 per cent of the country’s energy demand in 2024. This figure marks a slight decrease from a peak of 38 per cent in 2022.
According to Dcarbonx, the UK currently possesses the lowest gas storage capacity among G7 nations, with only 12 days of average winter gas demand available for stockpiling. In contrast, major European countries typically maintain an average of 90 days of storage capacity. The proposed facility, which was previously operated by British Gas before its decommissioning in 2018, is expected to store 1.4 billion cubic metres of gas, providing enough to meet an additional six days of average demand.
O’Reilly remarked, “The UK doesn’t just have a market gap – it has a strategic risk. Gas is no longer just a commodity; it is the key transition fuel and an insurance policy for stable growth.” Dcarbonx specializes in gas and hydrogen energy storage, and the proposed site could become operational within five years, pending regulatory approval and the interest of investors.
This initiative sets the stage for increased competition between Dcarbonx and Centrica, the company that operates the Rough storage site off the North Sea coast. The Rough facility, which was recommissioned in response to the energy crisis of 2022, accounts for a significant portion of the UK’s gas storage. Nevertheless, Centrica anticipates an adjusted operating loss between £50 million and £100 million in the current year, a situation that Chief Executive Officer Chris O’Shea has described as unsustainable without government support.
A spokesperson for the Department for Energy Security and Net Zero commented on the proposal, stating, “Our clean power mission is about improving our long-term national energy security by replacing our dependence on fossil fuel markets with clean homegrown power that we control.” The spokesperson acknowledged the UK’s varied sources of gas supply, which reduce its reliance on storage compared to other European nations, but reiterated the government’s openness to discussing proposals that provide value for taxpayers.
As the UK navigates its energy landscape, the outcome of Dcarbonx’s proposal could significantly reshape the country’s approach to gas storage and security, ensuring it can better weather the uncertainties of global energy markets.
