Business reporter, BBC News<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n The UK’s largest gas storage facility could be closed if the government does not help support a redevelopment of the site, the boss of the company which owns it has told the BBC.<\/p>\n Centrica chief executive Chris O’Shea told BBC One’s Sunday with Laura Kuenssberg programme that its Rough storage facility would be “shut down” without government help over energy pricing.<\/p>\n Centrica – which owns British Gas – says the site is set to lose \u00a3100m this year, and it wants to invest \u00a32bn in the facility so it can use it to store more gas, including hydrogen.<\/p>\n The government said the future of Rough was a commercial decision for Centrica but it was open to discussing proposals. <\/p>\n<\/div>\n The Rough facility is off the coast of East Yorkshire, and accounts for about half of the capacity the UK has to store gas.<\/p>\n It was closed in 2017, but then partly reopened in October 2022 following the energy crisis triggered by Russia’s invasion of Ukraine.<\/p>\n Earlier this month, Centrica said it was in “constructive discussions” with the government for a support mechanism that would allow investment in the Rough site to proceed.<\/p>\n The company is seeking a “cap and floor” pricing mechanism. This means that if energy prices fall below a certain level its revenues will be topped up, but prices would be capped if they rise too high.<\/p>\n “What we’re asking for is simply for the government to help create the conditions which will unlock \u00a32bn of investment,” Mr O’Shea told the BBC.<\/p>\n “It will create thousands of jobs in the construction phase, and it will safeguard the jobs of very highly skilled colleagues that are offshore.”<\/p>\n Without this investment he said the site would be decommissioned “and we’ll lose this resilience”.<\/p>\n He said the UK currently has 12 days of gas storage, of which Rough provides six.<\/p>\n “So if we don’t have Rough anymore, then we go down to six days. Now, if we take Rough to full capacity, we will go up to about 25, or 30 days.”<\/p>\n A Department for Energy Security and Net Zero spokesperson said while the future of Rough was a commercial decision for Centrica, “we remain open to discussing proposals on gas storage sites, as long as it provides value for money for taxpayers”.<\/p>\n<\/div>\n Last week, Mr O’Shea said the way that the energy pricing mechanism worked meant that building of renewables would not “materially” reduce UK electricity prices from current levels.<\/p>\n He told Laura Kuenssberg on a visit to the North Sea platform that decarbonisation was important and also a “huge economic opportunity”.<\/p>\n However he added that “the price we see today for electricity is the same as the price that we’re given to new renewable developments”.<\/p>\n “Therefore, that new renewable development will not bring down the price.”<\/p>\n He added that he thought the government’s 2030 target for clean energy was “very challenging, but I think it’s right that the energy secretary has set a very stretching target”.<\/p>\n “It’s not impossible, no, but it’s not easy.”<\/p>\n The Department for Energy Security and Net Zero said: “As shown by the National Energy System Operator’s independent report, our mission for clean power by 2030 is achievable and will deliver a more secure energy system, which could see a lower cost of electricity and lower bills.”<\/p>\n<\/div>\n Last year, Mr O’Shea told the BBC that the \u00a34.5m pay he received the previous year was “impossible to justify”.<\/a><\/p>\n And earlier this month, nearly 40% of Centrica’s shareholders voted against the company’s latest pay plans.<\/p>\n When asked about this by Laura Kuenssberg, Mr O’Shea said: “I don’t set my own pay.<\/p>\n “I think it’s really difficult,” he said. “I am unbelievably fortunate. I have a job where the market rate is is more than ever thought I would have done.”<\/p>\n<\/div>\n<\/div>\n![\"BBC](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/2260\/live\/7b57ca50-33ba-11f0-b50a-8f193c97c723.jpg.webp\")
BBC<\/span><\/div>\n<\/div>\n<\/figure>\nPay row<\/h2>\n<\/p>\n