Energy minister John Hayes confirmed yesterday that the government will look to hold gas storage auctions, following publication of the long awaited energy bill.
Hayes said the Department of Energy and Climate Change (Decc) will begin a consultation into increasing the UK’s gas storage capacity through auctions.
“Gas storage is very good way to deal with the volatility,” said Hayes. “We share [energy regulator] Ofgem’s enthusiasm and want to look at it closely as an option.”
Decc produced details on the long awaited energy bill yesterday, which included plans for a capacity market through auctions following an agreement made last week.
Hayes said further details about gas storage auctions will be released following chancellor George Osborne’s gas strategy announcement due in next week’s Autumn Statement.
Cost consultant Turner & Townsend UK power sector director Mike Pigott said there is “every chance that Britain will see a second dash for gas”.
“Gas has emerged from the wings to play a surprisingly big role in the diverse mix proposed by the energy bill,” he added.
“New nuclear power stations will play a key role too, but the construction timescale they need is too long to address the immediate demand for power that gas will bridge.”