By Chris O'Shea
Group Chief Executive
Published in the margins of the Chancellor’s Budget last week, the government’s consultation ‘Gas System in Transition: Security of Supply’ might have slipped under the radar for some - but make no mistake, this is one of the most consequential consultations in years. If the Budget was about balancing the books, this consultation is about balancing Britain’s energy security in a world where the old certainties are fading fast.
As the consultation document makes clear, the UK energy system stands at a crossroads, shaped by the twin forces of rapid decarbonisation driven by intermittent renewables production, and the natural decline of domestic gas production. This urgency has been echoed by NESO, the UK’s national energy system operator, which has concerns about gas shortages as Britain becomes more reliant on imports.
The consultation sets out government’s priorities for ensuring gas security of supply during the transition. Annual gas demand is expected to fall sharply as power generation becomes more dependent on intermittent renewables and home heating and industry electrify. Yet, peak-day demand remains strategically vital - gas will still be needed to back up renewables on cold, low-wind days. The government’s modelling is clear: while the system is adequate today, the 2030s could see tight or even negative supply margins during stress events, such as a 1-in-20 cold day combined with low storage or a major import terminal outage.
“Rough, as the UK’s only large gas storage site, is central to resilience. The government acknowledges the weakening economics of merchant storage and is actively exploring support models, strategic reserves, and regulatory requirements to ensure deliverability.”
In this context, gas storage is energy system-critical. Rough, as the UK’s only large gas storage site, is central to resilience. The government acknowledges the weakening economics of merchant storage and is actively exploring support models, strategic reserves, and regulatory requirements to ensure deliverability. “Do nothing” is not viable. Investment in alternative smaller storage assets is poor value for money given the scale of gas in the system – and they’d take up to a decade to build, too late for the first predicted pinch points.
The consultation is candid about market limitations. Existing models may not deliver the infrastructure resilience required. Options on the table include revenue support for storage and import infrastructure, strategic gas reserves, changes to gas quality rules, mandatory stockholding, long-term contracting, and wider regulatory reform. The case for keeping Rough open and expanding its capacity now is compelling - not just for its strategic value in underpinning national energy resilience as North Sea production declines and reliance on imports grows, but for the wider economic benefits it can unlock. Our £2bn investment in Rough would support thousands of skilled jobs, drive investment into the North and East, and strengthen the UK’s industrial supply chain at a critical juncture for the energy transition.
As the consultation unfolds, there is a real opportunity for constructive engagement. The decisions taken now will shape the future of Britain’s energy system for decades to come. We look forward to responding to the consultation and making the case for a storage framework that delivers lasting value for consumers, industry, and communities across the country.
This article has been adapted from an post from Chris O'Shea on LinkedIn - originally posted 7th December 2025.
