CENTRICA ENERGY STORAGE: Essential Element of UK Energy Resilience

“Energy is in our DNA,” opens international energy and services company Centrica. “From supplying the gas and coal that powered the industrial revolution, to becoming the market-leading energy services and solutions company we are today, we’ve been at the centre of the UK energy industry for over 200 years.” 

Centrica is unique among energy companies in the UK and Ireland, in its operating across the entire energy value chain through a variety of distinct, but complimentary businesses, all of which have a common purpose, the organisation says: “helping you live sustainably, simply, and affordably.” 

Formerly Centrica Storage Limited, a recent name change for this pivotal Centrica arm is designed to signify a change in ambition, Centrica Energy Storage (CES+) details. “We wanted to keep storage in our name as it is at the heart of what we do now, and our plans well into the future,” the company stresses, “but we have larger ambitions outside of storage, including onshore and offshore hydrogen production and fuel-switching our existing operations to hydrogen to minimise our environmental impact.”    

ROUGH READY TO ADD RESILIENCE 

CES+ operates the Rough gas storage facility in the Southern North Sea, as well as the Easington onshore gas processing terminal in East Yorkshire, an onshore gas reception and treatment terminal, modified between 2011 and 2013 by CES+ to handle gas produced from the York field, at the time the largest known undeveloped gas reserve in the southern North Sea. 

“This was the largest single project within the Easington gas terminal in 20 years,” CES+ explains, “with the plant designed to handle 120 million cubic feet per day of gas, from the York field which will produce enough gas to meet the demands of half a million households.” 

The Easington terminal processes gas from the Rough underground gas storage facility, located 18 miles off the coast of East Yorkshire, where storage operations restarted in 2022 following a dormant five years since 2017 to provide critical further energy security in the UK while cutting users’ bills. “Today, Rough provides more than half of the UK’s gas storage – 54 billion cubic feet (bcf) of gas – which is enough to provide the equivalent volume of gas to heat 2.4 million homes over winter,” CES+ states. 

“The long-term aim is to turn Rough into the largest long duration, low-carbon energy storage facility in the world, capable of storing both natural gas and hydrogen with the goal of bolstering the UK’s energy security,” CES+ adds, having last year made huge strides toward this objective in almost doubling gas storage capacity at the UK’s largest such facility. 

At the time of reopening Rough for gas storage it was able to store approximately 30 bcf of gas for UK homes and businesses; this further investment in the facility has brought Rough up to the present 54 bcf capability in a major boost to the UK’s energy resilience. Despite diverse gas supplies through connections with Norway and other European countries, alongside three LNG import terminals, the UK has some of the lowest levels of gas storage in Europe at 12 days average, or 7.5 peak winter days. 

By way of comparison, Germany’s stands at 89 days, France’s at 103 days and that of the Netherlands at 123 days. 

“The resilience of the UK’s energy system needs to be substantially improved,” assessed Centrica Group Chief Executive, Chris O’Shea, of the significance of the development. “We are delighted to play our part by further expanding the UK’s gas storage capacity. 

“Rough is not a silver bullet for energy security, but it plays a critical role in increasing capacity and supply confidence over the winter months. 

“Rough can help our energy system by storing natural gas when there is a surplus and producing this gas when the country needs it during cold snaps and peak demand.” Rough will, equally, help keep prices down for consumers by balancing the UK’s gas market, injecting gas into the facility when there is excess supply and putting that gas back into the UK’s gas network when customers need it most, keeping prices lower at that point of peak demand; in November came the winter’s first release of stored gas at Rough into the UK grid. 

“Customers are struggling with high energy bills which are driven by international energy prices,” O’Shea observed at the time. “Gas storage is vital to ensure the UK can manage demand effectively, keeping prices down, and I’m proud of the actions our team has taken over the last 18 months, including our decision to bring Rough back online, to underpin the UK’s energy security. However, we still have the lowest levels of energy storage of the world’s major economies with the ability to store fewer than eight days of peak winter demand and this leaves us susceptible to shocks in international markets,” he countered.

“Gas will continue to be used as a transition fuel for the foreseeable future and we stand ready to invest £2 billion to quadruple the size of the Rough field and make it the world’s biggest methane and hydrogen storage facility, bolstering the UK’s energy security, delivering a net zero electricity system by 2035, creating 5,000 skilled jobs and decarbonising the UK’s industrial clusters by 2040,” O’Shea explained. 

“This world class North Sea asset has the potential to help the UK economy return to a position of being a net exporter of energy once again.” 

HYDROGEN TO HUMBER

A co-operation agreement between Centrica and Equinor to explore developing a low-carbon hydrogen production hub at Easington, looks set to further strengthen the region’s growing status as the UK’s foremost hydrogen super location. Under the plan, over the coming decade the Centrica-operated area could transition to a low carbon hydrogen production hub, massively supporting both the Humber’s decarbonisation ambitions and UK’s achievement of net zero and hydrogen production targets.

Centrica and Equinor predict that the conversion of the Easington Terminal could produce an additional 1GW of low carbon hydrogen production, coupled with the roughly 200MW off-taker demand. Currently, up to one third of the UK’s overall gas supply enters via Easington, which is also Easington positioned close to some of the world’s largest offshore wind farm developments, offering huge potential for both blue and green hydrogen production. 

With the UK government having recently doubled its 2030 hydrogen production ambition to 10GW capacity, and at least half of this figure to come from electrolytic ‘green’ hydrogen, the area is a key location within the Zero Carbon Humber partnership which, it is intended, will provide regional hydrogen and CO₂ pipelines between the area’s major energy producers and carbon intensive industries. 

“The Humber is in a unique position to lead the way on industrial decarbonisation, and partnering with Centrica to potentially develop a new hydrogen hub at one of the UK’s most significant industrial sites could help to transform this region’s energy mix whilst preserving and creating jobs and skills,” Grete Tveit, Senior Vice President for Low Carbon Solutions at Equinor, expressed, restating Equinor’s ambitions to deliver nearly one fifth of the national target by generating 1.8GW of hydrogen production within the Humber region by 2028. 

“We are delighted to be working in partnership with Equinor to explore opportunities to deliver on our commitments to help the UK transition to net zero as hydrogen will play a key role in achieving this,” O’Shea agreed. “Like Equinor, Centrica is committed to investing in the Humber region, levelling up and de-carbonising industry to create a world leading, green energy-driven, economic hub.” 

Mike Whitehead, President of the Hull & Humber Chamber of Commerce, succinctly encapsulated the value of this key partnership. “It’s fantastic to see these two major energy companies seeking to invest and explore ground-breaking projects in this region, demonstrating our long-standing reputation as the UK’s Energy Estuary. 

“Over the coming decades we will need this level of ambition to transition away from fossil fuels whilst creating jobs, boosting skills and attracting inward investment.” 

GRAND, GREEN & GLOBAL AMBITIONS 

Perfectly encapsulating the wider Centrica’s unbending green focus, the UK’s energy security was dealt a further aid via a deal with Repsol to see Centrica Energy purchase one million tonnes of LNG shipments between 2025 and 2027, to be delivered to the UK’s leading LNG import terminal and the largest in Europe, Grain, in Kent. 

“I’m proud that Centrica is continuing to improve the UK’s security of supply through this deal with Repsol,” O’Shea said. “When our security of supply is threatened, it is customers that lose out, so it’s reassuring that this agreement will ultimately help ensure that those on the front line of the energy crisis have some insulation from price fluctuations. 

“Natural Gas is an essential transition fuel in the move to net zero and securing international agreements such as this will be vital if the UK is to reach its ambitious goals. Alongside the other steps we’ve taken to make the UK more resilient – through deals with Delfin Midstream and Equinor – our actions demonstrate our commitment to the UK consumer.”

Somewhat further afield, Centrica Energy, alongside leading renewable energy developer and fund manager Taaleri Energia and Lords LB Asset Management, a Lithuania-based fund manager, announced the signing in March of a Power Offtake Agreement for the Rokiškis and Jonava wind farms. 

Generating 408GWh annually, the wind farms will produce green electricity equivalent to the consumption of approximately 197,000 households, consequently offsetting 123,000 tonnes of CO₂e emissions every year. 

Following on from its ambitious commercial strategy to expand the business across new borders and deliver on green growth ambitions, Centrica is working to support the application of merchant-based instruments and manage risks, the company explained, ultimately enabling long-term returns for investors who are bringing new green electricity into the grid. 

“We’re excited to further build on our strong cooperation with Taaleri Energia, expanding our relationship beyond the Finnish, Swedish, and Norwegian markets to now include Lithuania as well,” furthered Kristian Gjerløv-Juel, vice president of renewable energy trading and optimisation at Centrica Energy. “Our commitment to delivering services and solutions that support the growth of sustainable energy systems across Europe is unwavering, and it’s fantastic to be on that journey alongside some of the leading developers and fund managers in the renewables industry.” 

The agreement marks Centrica Energy’s first renewable power purchase agreement secured in Lithuania, a market that presents significant potential for the buildout, management, and optimisation of new renewable generation, and closely follows its first agreement in Estonia, bringing its portfolio of wind and solar assets under management in the Baltic states to a total of 168MW. 

A key element of Centrica’s sustainable operating plan is the commitment to supporting every customer to live more sustainably, in its bid to become a net zero business by 2045 and help each of its customers to achieve same by 2050. “We are a leading renewable energy trading company,” the organisation resumes, “and our mission is to drive the green transition while offering sustainable and predictable energy costs for suppliers and off-takers. In short, we call ourselves energy movers by nature.” 

“We are devoted to being up to date on energy advances to help our clients and using current energy forms as transitionary tools towards a new energy reality. Our ambitions are grand, green and global, and we believe the future of energy must be unlimited and clean.

“We see our ultimate role as the switch that accelerates the green transition by leading the development of a sustainable symbiotic energy market.” 

Read more about Centrica Energy Storage in the upcoming edition of Energy Focus and hear exclusively from MD Martin Scargill.