Energy and Utilities

Fast cycle gas and salt caverns in the UK: yesterday's game or back in vogue?

Published on 25th Oct 2023

Gas storage sites are complex, with particular logistical and geological risks – but there are major opportunities for long-duration energy storage and interseasonal hydrogen storage

Business planning meeting, photo of people's hands holding pens and going over papers

In 2017 Centrica closed the Rough gas storage site on the basis it was uneconomical to continue running – and had reached the end of its design life. In 2017/18 EDF Energy also marketed its two (nine cavity) gas storage facilities at Hill Top Farm and Hole House in Cheshire. For EDF the sale was more about strategic alignment (EDF was pivoting from its gas business) and a very flat gas trading market.

Fast forward past two gas market crises (Covid-19 pandemic and the invasion of Ukraine) and it looks like the tables have turned. Gas storage is now very much back in fashion – Rough was reopened last winter and salt caverns are now attracting a lot of investor interest.

Why is this, and what is the potential for buyers for onshore salt cavern sites?

Onshore salt cavern opportunities

Key opportunities for investors include gas trading arbitrage, long-duration storage and interseasonal hydrogen storage.

Gas trading arbitrage

The primary role of gas storage sites is to store gas for periods of high prices (that is, trading gas by buying at low prices and exporting at high prices). This was why EDF'S Cheshire sites were developed in the first place, and the gas markets are now much spikier than they were.

Long-duration storage

EDF looked at the potential for compressed air storage at both Hole House and Hill Top Farm some years ago, and long-duration energy storage (LDES) is now very much on the net zero-inspired agenda.

It is regarded as one of the key mitigants between high output/low demand and low output/high demand periods, brought about by an increasingly intermittent renewable-backed energy system. 

The economics for EDF's gas storage sites did not stack up a few years ago, but last year they received funding from the Department for Energy Security and Net Zero (DEZNZ) and the government is very motivated to explore LDES as a proof-of-concept.

Interseasonal hydrogen storage

Interseasonal hydrogen storage is the real sweet spot for a future decarbonised energy system, which needs hydrogen to play a role in storing energy (hydrogen is an energy vector) between seasons: capturing hydrogen produced during high-wind peaks for use in low renewable/high demand periods. This is where hydrogen is intended to displace the role currently played by gas peaking plants, and open and closed-cycle gas turbines.

What about the risks?


Salt caverns are formed from strata of rock salt, with water pumped into an existing cavity to enlarge the underground space.

This works through a "debrining" process, whereby circulating water dissolves the exterior rock salt which can then be extracted as a brine solution. That brine then has a number of uses, but the effect of debrining is that it significantly expands the cavity (think cathedral-size). The gap between neighbouring cavities is the pillar – and it has to be thick enough to prevent cavity collapse or the escape of gas between cavities.

Cavities cannot be used for storage when the cavity walls are not sufficiently robust to withstand the required underground pressures.


As a result of the debrining process, there are often complex commercial agreements in place with the neighbouring "debrining" provider – in the case of EDF's Cheshire plants this is the neighbouring British Salt facility (that salt then ends up in your crisps).

These arrangements limit flow-rates and the associated operational aspects of the neighbouring sites.


The easiest issue to overlook – but potentially the most expensive.

Salt caverns cannot be left empty at the end of their life, so have to be safely decommissioned using an appropriate cushion gas or brine solution to prevent further cavity expansion and to maintain safe cavity pressures. Given the huge size of the cavities, the cost of the quantities of brine required can be very significant.

Market risk

The flip of the "opportunities" above, just as the market flattened in 2017/8, so the incentives for trading could move from a storage operator in the future.

The LDES market is currently reliant on grant funding – which is short-lived and there is no mechanism for ongoing operational expense (OPEX) support.

LDES, by its nature, requires a different trading strategy, given the move away from day-ahead and intra-day trading. The H2 storage opportunity is limited by the availability of a sufficient volume of (low cost) hydrogen and an appropriate transportation system from point of production to point of supply (via the gas storage cavern).


Gas storage sits within a complex regulatory web. This ranges from the energy regulator Ofgem's third party access requirements, the Health and Safety Executive's COMAH (control of major accident hazards) regime, through to the various regulations applicable to gas transportation and storage.

All of this has to be appropriately managed by the operator, which requires a well thought through stakeholder engagement plan. Similar considerations apply in respect of the neighbouring communities.

Osborne Clarke comment

The operation of gas storage sites, particularly in salt caverns, is less simple than might first appear. However, the opportunities introduced by a net zero energy system are significant, and gas storage in salt caverns is one of the few credible solutions to both LDES and the interseasonal storage of hydrogen, making it the perfect complement to a renewables-dominated energy system.


* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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