A lack of adequate gas storage has left Britain's energy market like a “house of cards”, more vulnerable to supply shocks than any other country in Western Europe, according to a leading energy analyst.

Four years after becoming a net gas importer, Britain still has one of the lowest levels of gas storage capacity in Europe - enough to supply consumers for about two weeks. That is equivalent to about 4 per cent of annual demand, compared with 20 per cent in both France and Germany.

John Hall, an energy analyst, said that this acute shortage was a key factor creating volatility in Britain's wholesale gas market, which in turn is resulting in bigger bills.

“Without more storage the UK is terribly vulnerable to supply disruptions,” Mr Hall said, adding that the situation was exacerbating tension in Britain's gas market, the third-largest in the world after America and Russia.

“If the Government was faced with a situation where we couldn't get gas from the Continent for some reason, the UK would be in serious trouble,” he said, adding that such a situation could lead to power cuts and the temporary closure of large industrial plants.

“We don't have a long-term plan and we have depleted our own resources. It's a house of cards.”

Historically, the UK has not built gas storage facilities because of its easy access to reserves in the North Sea. In the event of a supply shortfall, fresh supplies could simply be pumped directly to consumers.

However, with the rapid depletion of these resources, there is an urgent need for more storage to help to deal with potential disruptions such as the closure of one of the pipelines linking Britain with Europe, or a delay to shipments of liquefied natural gas.

The problem is likely to become increasingly acute. About 40 per cent of UK gas supplies will be imported this year, up from 27 per cent in the previous 12 months. That proportion is predicted to rise to 75 per cent by 2015.

A spokesman for E.ON said: “The theory is that when gas is cheap in the summer you buy a lot of it and you pull it out of storage in the winter. It helps to smooth out market volatility. But without storage on a large scale you have much less ability to deal with disruptions to supply.”

Since 1985, the bulk of the UK's gas storage capacity has been held at a site called Rough in the North Sea, which is operated by Centrica. The gas is stored in rock formations 2,700 metres beneath the seabed. Four smaller facilities exist at onshore sites.

Ten new gas storage projects have been proposed, mostly in Cheshire, Dorset and Yorkshire, to double storage capacity to about 8 per cent of annual demand. This would still be less than half the storage rates of France and Germany and most proposals are stuck in the planning system. Difficulty winning permission for such large projects has been a significant problem for power companies, especially since the fire at the Buncefield fuel depot in 2005 lowered public confidence in the industry.

E.ON, for example, has two projects planned: a 165 million cubic metre facility at Holford in Cheshire, and a 420 million cubic metre project called Whitehill in the East Riding of Yorkshire. The latter has not yet been approved.

A spokesman for the Department for Business said it was “vital” for the planning issue to be resolved this year with new legislation.

Times Recommends

• Food prices rise 8.3% on soaring fish and meat
• Car sales crash as economy hits skids
• House prices fall but Bank leaves rates on hold