Lower wholesale gas prices should feed through into lower energy bills for households(Peter Byrne/PA)
(Picture: PA Archive)There were hopes that the scare over high gas prices could be easing with households about to flip their calendars over after an unseasonably warm October.
Wholesale natural gas prices were on course for a fall of over a third for the month, helping ease fears about the impact of energy prices on the cost-of-living crisis. The market cost for a unit of energy, called a therm, was down by over 7% for the day on Halloween at around £3.14.
At the end of September, it was at almost £5, leaving it down over 36% for October, a time when gas prices often rise as the autumn nights draw in. Prices peaked at over £8.75 in August, on concern about the impact of Russian supply cuts to European gas supplies.
Since then, EU countries have upped their storage capacity, as has the UK, where an undersea facility off the coast of Yorkshire was reopened at the weekend, helping utility companies lock in lower prices for periods of greater demand when winter weather arrives.
A therm is equivalent to about 100 cubic feet of gas. The Yorkshire storage facility, Rough Common, will be able to hold up to 30 billion cubic feet of gas this winter, say Centrica, its owners and the parent company of British Gas.
Nonetheless, UK storage capacity is low compared with neighbouring countries at about 9 days of typical demand according to Centria figures. France is at 103 days, with Germany at 89 days.
Centrica Group Chief Executive, Chris O’Shea, said: “Rough is not a silver bullet for energy security, but it is a key part of a range of steps which can be taken to help the UK this winter.” In the short term we think 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.”
