BRITAIN WITHOUT NORD STREAM 2

PLATTS- 22 Sep 2021 - The UK does not support Russia's Nord Stream 2 gas pipeline project to Germany and does not need its own long-term storage facility, UK Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng told a parliamentary committee Sept. 22. 

S&P Global Platts assessed the price of UK NBP day-ahead gas at 181 pence/therm Sept. 21, down 6 p/th day on day but up 44% since the start of the month.

Having initially said otherwise, Kwarteng clarified his position saying the UK was not supportive of Nord Stream 2, which awaits regulatory clearance, while playing down its significance in the UK context.

"We are not exposed to Russian supply as many of our EU counterparts are," he said.

Nor was he convinced by calls for more domestic gas storage.

"The gas price has quadrupled in the last six months. We have to prepare for longer term high prices ... but I think closure of Rough [storage facility in 2017] is a bit of a red herring," Kwarteng told the BEIS Committee in a hearing.

Supply chains were being squeezed by the rise in gas prices, with the role of storage "not particularly relevant to the problem we are facing", he said.

Depending on who owned the storage, the higher the gas price the more incentive there was for the storage owner to sell the gas in the open market, he said.

Joanna Whittington, Director General for Energy and Security at the Department for BEIS, said the UK used its gas storage assets for short-term operational balancing.

"What we really rely [for longer-term security] is a very diverse range of supply -- UK and Norwegian Continental Shelf production, three LNG facilities, and interconnections to Belgium and the Netherlands. Our need for storage is not the same as for those that do not have that diversity," Whittington told the panel.

On a related topic, however, Kwarteng said BEIS was keen to progress Scottish hydro pumped storage developments such as SSE's 1.5-GW Coire Glas project in Lochaber in the Highlands.

The project had planning permission, could be completed more quickly than new nuclear but needed support, said committee member Alan Brown of the Scottish National Party.

The UK has 2.8 GW of pumped storage capacity, but a new plant has not been built for 30 years. Pumped storage is not eligible to bid in Contracts for Difference auctions, but the government said in its December 2020 Energy White Paper that the technology had an essential role to play in integrating renewables to 2050.

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