A Scottish energy business that tried to win Government support for a plan to develop a huge offshore gas storage facility before the energy crisis developed has been acquired by an English firm.

Edinburgh-based Stag Energy has become part of the Carlton Power group in a deal that provides recognition of the expertise offered by the firm.

Stag was formed by a team of veterans of the gas storage and power generation industries led by George Grant.

The company spent years working on a plan to turn a network of salt caverns off north-west England into a huge gas storage facility.

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The project, called Gateway, won Government consent in 2008 and Stag secured backing for it from oil services giant Petrofac in 2010.

However, the company relinquished its licence to the acreage concerned in 2021 after spending years trying to win UK Government financial support for it without success.

Mr Grant said he had pressed the government to introduce the kind of support mechanism for gas storage facilities that would have ensured the UK has an appropriate capacity.

But he found ministers preferred to let the market decide.

Cetrica closed the Rough gas storage facility off Yorkshire to new supplies on economic grounds in 2017. The UK has been left reliant on imports in a way that has magnified the impact of the global supply squeeze, which has fuelled a dramatic increase in wholesale gas prices.

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Mr Grant noted that it will be crucial for the UK to have adequate storage facilities it is to maximise the potential of low-carbon hydrogen fuel in future.

However, he said it was hard to win official support for the kind of strategic long term developments required given the focus of governments on short-term political considerations.

“The storage we were looking to develop is exactly the sort that will be required in future as hydrogen becomes a material part of the energy mix,” noted Mr Grant.

Stag has worked on a range of infrastructure projects related to the transition to a lower carbon energy system such as hydrogen production, solar power and battery storage.

Led by Keith Clarke, Carlton is working on the development of an energy park in Manchester, which is expected to include a plant that will produce hydrogen for transport and heating use and a battery storage facility.

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Carlton founder Keith Clarke said the employees of the enlarged group had an unparalleled track record of successfully identifying, developing and delivering major infrastructure projects in the UK and Europe.

He added: “There are a range of business opportunities that we see to be vital for the UK energy system to safely navigate its way towards Net Zero.”

Mr Grant said: “The combined company intends to capitalise on the continuing growth in the market for distributed low carbon energy projects and to continue to deliver quality investment opportunities for both strategic and financial partners.”

The five employees of Stagg have joined Carlton Group.