Saturday 21 December 2013

DECC Energy Trends - UK energy decline continues

The latest Energy Trends have been published by DECC, so here's a summary... (all graphs are copied from the publication)

Unsurprisingly, the upward trend in net UK energy imports continues:

UK Net Energy Import Dependency Q3 2013

At least fossil dependency is coming down, though this includes nuclear:

UK Fossil Fuel Dependency Q3 2013

Coal

Coal mines have been closing - production is down 32% over last year. Imports are up 12%, and mainly come from Russia, Columbia and the USA. Total consumption is actually down 2.8% on a year ago, due to a reduction in the use of coal for generating electricity - coal use in other areas increased significantly.

UK Coal supply Q3 2013

Oil and petroleum products

The downward trend of oil and NGL production has continued, with a new post-peak low being hit in Q3 - down 7% on a year ago:

UK Oil production and trade Q3 2013

The following graph shows net trade in both crude oil and petroleum products. Unsurprisingly, the UK is importing a lot of crude oil, but our traditional position as an exporter of petroleum products is also being eroded as refineries are closed down:

UK Oil and product trade Q3 2013

Gas

Gas production actually declined less than in recent times, with a drop of 3.8% compared to a year ago. However, this is due to the return to production of the Elgin field, which shut down due to a leak in March 2012, rather than any pause in the overall decline. Demand for gas was down 8.2% on a year ago, due to warmer temperatures and less gas being burned to generate electricity.

UK Gas production and trade Q3 2013

Electricity

Electricity demand was down 0.6% compared to a year ago, although this combines a rise in industrial use and a fall in domestic use. Interestingly, domestic use was the lowest for Q3 for fourteen years! Electricity generated from renewable sources increased from 11.7% in Q3 a year ago to to 13.2% this year, although this is lower than the 15.4% reached in Q2 2013. Lower wind speeds resulted in reduced generation despite increased capacity, but this was compensated for by conversion of coal fire power stations to burn biomass instead. This is controversial though, as the biomass used is imported rather than being sourced from within the UK.

Generation from solar PV was up 31.9%, due to increased capacity, but hydro was down 26.6% due to low rainfall. In terms of installed capacity:
  • onshore wind was up 25% at 7,120MW
  • offshore wind was up 36.3% at 3,657MW
  • solar PV was up 57% at 2,542MW
  • anaerobic digestion was up 33.5% at 122MW

UK Renewable Electricity Generation Q3 2013

So, nothing shocking this quarter - a continued decline in fossil fuel production, a steady but slow rise in renewable energy, and a few new highs and lows set compared to recent years.

Mike

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Friday 29 November 2013

IEA World Energy Outlook 2013 video presentation

The 2013 IEA World Energy Outlook is now out, but as it's pretty expensive, and long, you might like to watch the videos of the key facts being presented by some of the key people, that the IEA has kindly uploaded to YouTube. There's three - intro, main presentation, and Q&A:







Mike

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Thursday 28 November 2013

Blown fuse in Norway reduces UK gas supply

OK, well not a blown fuse literally, but a circuit breaker tripped and shut down a chunk of output from the Ormen Lange gas field, which is one of the main sources of gas for the UK, via the Langeled pipeline. This story indicates the cut should only be for 24 hours. You can see the effect on this graph of Langeled output taken from a National Grid website:

Langeled shortfall 28Nov2013
Not a huge problem today, but this is exactly the kind of thing that can cause dangerously low supplies when it happens in colder weather - of which there is more to come in the next few months...

Mike

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Tuesday 12 November 2013

Gas Bills 'Could Rise' Due To Low Reserves

Good to see that some people are aware of the issues the UK has with gas supply - Sky News in this case!

Gas prices could soar this winter if the national supply runs short during another cold snap, an energy expert has warned. Industry analyst Peter Hughes told Sky News that a "perfect storm" last March of extreme weather and the shutdown of two major pipelines caused prices to double. And that could happen again because the Government has refused to support the storage of more gas. "It foreshadows things to come," he said.

"The situation in terms of the risks will only get worse as North Sea production runs down and demand rises. That's the double whammy. And if you don't have more storage that translates into real vulnerability."

Britain currently stores enough gas for 13 days of supply. But Germany has reserves to last 69 days, in case there is a problem with the supply from countries such as Russia.

Even the gas storage that we DO have is not always working properly... News out today from Reuters says that withdrawals from Centrica's Rough storage site, the largest in the UK, will be limited for a few hours today and for four days from 21 Nov. More importantly perhaps, no gas can be injected back into for two weeks starting on 18 Nov. Presumably this is all down to maintenance work, but that really should have been completed earlier in the year... Let's hope we get a mild winter!

Easington Langeled Terminal

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Monday 14 October 2013

Keeping the lights on? UK gas supplies and prices in winter 2013/14

With the UK weather turning colder over the last week, it's time to take a look at how our creaking gas and electricity infrastructure might cope this winter. I'll look at two areas - first, National Grid's Winter Outlook for 2013/14, and second, my own analysis of their data on UK gas storage.

Most of National Grid's Winter Outlook is dedicated to gas, as the supply/demand is affected much more than electricity by the availability of imports and how cold the weather is. The report indicates that there is, in theory, plenty of gas supply for even the coldest weather that the UK could experience. In practice, however, situations can arise where supplies are far from secure. For example, earlier this year an unseasonably cold March coincided with a brief outage in the Bacton Interconnector, resulting in gas storage levels dropping to record lows. LNG imports were low at the same time, due to demand from Japan and China - this has not changed since then. The situation is illustrated well by a graph from from page 13 of the Winter Outlook, where the 2012/13 line can be seen going off the cold end of scale in March:

Fig G1 from National Grid Winter Outlook 2013-14

This exposes the other flaw in our gas market - if it is cold in Europe at the same time as it is cold here, there's no guarantee that gas suppliers in France, Germany and elsewhere won't keep gas for local use due to obligations placed upon them. Alastair Buchanan, the former head of OFGEM who stepped down from his post in June after 10 years’ service, comments on this in an interview with The Telegraph, and goes on to say that uncertain gas supplies combine with ageing power stations in the UK to create a real risk of temporary blackouts if the weather is cold over the next few winters. Over 40% of the UK's electricity is generated by burning gas, so the two are closely linked. In the Winter Outlook, National Grid notes that the margin of spare electricity generating capacity this winter would only be 5% during a cold spell, compared to 17% just two years ago.

Moving on to the current state of our gas stores, here's some graphs I've plotted using data available from the National Grid website. First, here's the amount of gas in Long Range Storage, which is basically a single depleted gas field known as Rough, owned by Centrica. 2013 is in red on the graph.

UK gas long range storage 14 Oct 2013

As you can see, the main factor affecting the storage levels in Rough this winter is what happened last winter. The cold weather dragging on through March and April resulted in the storage level actually going below 'zero' (see my blog at the time for an explanation), so we've been playing catch-up all summer and the current level is lower for this date in October than any time since 2007 (when North Sea supplies were much greater than today...). There's little hope of the storage getting filled up to the higher levels seen in the past few years, partly due to physical limits to how fast gas can be pumped in and partly due to the rising cost as we go into winter. The rate at which Rough has been filled this year is shown in the graph below. Why they decided to take a break from filling it at some points is beyond me...

UK gas LRS injection 14 Oct 2013

You'd think that someone would be building more storage space for gas, but a recent story in The Telegraph noted that:

Centrica has written off £240m in wasted costs after scrapping its £1.4bn plan to convert an empty North Sea gas field into a gas storage site, and shelving another smaller project indefinitely.

The situation with Medium Range Storage is not so bad, though this doesn't fully compensate for the current shortfall at Rough:

UK gas medium range storage 14 Oct 2013

Short Range Storage is very low, but the amounts required to fill it up are relatively small. It does still need doing though, as these stores are critical to cover unexpected outages, which seem to occur regularly enough that the may as well be expected these days...

UK gas short range storage 14 Oct 2013

Of course, the question that most people will be asking is 'What will happen to prices?' Well, I said in a post on this blog in May 2013:
This can only translate into higher bills eventually, although the bumper profits made last winter may result in a short delay before this happens. Boosted gas prices will feed through into electricity prices too.
Lo and behold, one of the 'big six' have already put up their prices, and I'm sure the others will follow suit. I know they blame 'green taxes' and transportation costs, while the government blames fat profits in the upstream sections of the energy companies, and there is a little truth in all these claims, but the simple fact is that in the year ending 30 June 2013 we imported over 50% of our gas (data from DECC). This means that we are at the mercy of European and global demand and weather. The graph I've plotted below shows spot market prices as reported by National Grid over the past few years. The trend is clear, and the average price this year so far is currently up 18% on the year before, in part due to the very low storage levels at the start of the summer.

UK gas buy price history 14 Oct 2013


I will of course be keeping an eye on gas storage levels, and the weather forecast, over the coming 4-5 months, and don't forget you can check the current gas situation yourself at National Grid's Prevailing View page.

If you're wondering what else you can do, at the risk of repeating myself, you can:
  • Reduce demand (wear warmer clothes, turn the thermostat down, don't boil a saucepan without a lid on it, etc.)
  • Improve efficiency (insulate your house, draughtproof, double-glaze, etc.)
  • Use renewable energy
There's some examples of what we've done at home for the above points here, and you can check out some inspiring ideas on the Ashden website too.

Keep warm, and pray that we don't get too many days that look like this in the coming winter...

DSC_5464

Mike

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Thursday 26 September 2013

DECC: UK imported more than half its energy in Q2 2013

The latest DECC Energy Trends was published today, and it's no surprise that the decline in indigenous energy production has continued. The killer statistic is:

In the second quarter of 2013 net import dependency rose to 51.4 per cent, up 9.6 percentage points from the second quarter of 2012.
The chart on page 10 tells the story:
Uk energy import dependency
Here's the reasons, all comparing Q2 2013 to Q2 2012...

Coal: Production was down 24.3% on a year ago, and the proportion of our coal that came from imports rose from 81.7% to 93%. These imports came mostly from Russia (nearly half of the total!), USA and Columbia.

Oil: Production was down 13.4% on a year ago, and the proportion of our oil and oil products that came from imports rose from 40.5% to 45.1%. On a related note, the closure of the Coryton refinery resulted in a 5.6% drop in production of fuels from oil.

Gas: Production was down 2.8% on a year ago, and the proportion of our gas that came from imports rose from 43.6% to 52.5%. These imports came mostly from Norway, Qatar and the Netherlands.

Electricity: Production from nuclear power fell 16.5% due to several outages, but wind and PV generation rose by 58.6% (due to increased capacity), and hydro generation rose by 29% (due to higher rainfall). We imported 4.4% of our electricity.

Renewables
The key points here are:
  • Share of electricity supply up from 9.7% to 15.5%, due to increased capacity for wind and PV and increased rainfall to power hydro stations. There was also more generation from power stations converted to biomass, although co-firing with coal has reduced.
  • There's now 1,918 MW of capacity on a feed-in-tariff, 127 MW of which joined during Q2 2013.
  • Total renewable capacity in the UK was 19.5 GW, compared to 14.2 GW a year ago.

Large Combustion Plant Directive
There's a helpful table (page 72) that shows how many of the coal power stations that were running over winter 2012/13 won't be running this winter. It's for reasons like this that Ed Miliband's promise to freeze energy prices seems a bit foolhardy.
LCPD hours remaining

The status of the plants that opted out is given in another table:
LCPD plant staus

This shows that there's 5,050 MW of coal plant that ran last winter and won't be running this winter, and another 2,268 MW of oil plant that has shut - this didn't run much last winter, but when it did run it was urgently needed... On top of this there's another 1,730 MW of coal plant that is currently open but will close at some point during this winter. DECC also notes that:
From 1st January 2016 the remaining large combustion plants will be subject to more stringent emissions controls outlined in the Industrial Emissions Directive (IED). Plants that chose to opt-out of this directive will be limited to 17,500 hours between 2016 and 2023.
So there's more shutdowns to come!

Mike

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Wednesday 21 August 2013

North Sea faces record fall in oil and gas production

Montrose Alpha

According to a story in The Telegraph today, this year could see a record fall in oil and gas production for the UK:
North Sea oil and gas production could decline by as much as 22pc this year - the biggest annual slump on record – as maintenance on ageing infrastructure hits operations, the industry body has warned. Oil & Gas UK said it now expected average output to fall to between 1.2m and 1.4m barrels of oil and gas per day (boepd) this year, down from 1.54m boepd in 2012.
Full story
The decline has been in the region of 10% a year for some time now anyway, but some major technical issues in the past year have pushed production down faster than has been typical. In some ways this isn't all bad - it means that oil and gas is still there to use later on, when prices are higher. But there's always the risk that it's not worth repairing failing machinery if there's not much left to be extracted from a particular field, leaving it locked underground for good. (Of course, from a climate change point of view that's a good thing!)

This trend doesn't fully show up in the latest DECC Energy Trends, as it only covered up to Q1 2013, but even then oil production was down 15% from a year ago, and gas down 14.5%. It'll be interesting to see what's in the September edition...

On a slightly more positive note, it seems that more attention is being paid to thorium as a nuclear fuel. Obviously nuclear energy of any sort has numerous downsides, but thorium does seem to be be 'less bad' than uranium in several ways, so it'll be interesting to watch for more developments...

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Wednesday 24 July 2013

Peak oil lives, but will kill the economy

Interesting story in the Guardian this week, noting that the BBC had lined up a row of 'experts' to tell us that there's no need to worry about the future of oil supplies. The point they seem to have missed is that the cheap oil is declining fast, and the gap is being filled by expensive oil, and that this expensive oil also takes more energy to get it out of the ground and turned into usable fuel.

"Global production of crude oil and condensates... has essentially remained on a plateau of about 75 million barrels per day (mb/d) since 2005 in spite of a large increase in the price of oil. Even more important, the global net oil exports from oil-exporting countries (oil production minus internal consumption) have peaked and are in decline."
...
The Eos paper goes on to point out that while "total oil production has plateaued, production of oil from older existing fields has been in decline, dropping roughly 5% annually, corresponding to a loss of 3-4 mb/d." Although production from unconventional oil and gas has balanced this decline, they are "difficult and expensive" with "very low energy return on investment (EROI)." In simpler terms, "it takes energy to get energy, and more is required to produce energy from unconventional sources."

The outcome is of course that oil will cost more, and that limits economic growth.
The result is an undulating production plateau correlating with higher but more volatile oil prices, as well as a prolonged recession punctuated by small cycles of 'recovery' and contraction.

Hmmm, 'prolonged recession punctuated by small cycles of 'recovery' and contraction.' - sound familiar to anyone?

You can read the full article here.

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Wednesday 12 June 2013

Interview with Kjell Aleklett, one of the Peak Oil 'founding fathers'

An interesting interview with Kjell was published a couple of days ago, where he sets out the story so far on Peak Oil. Good to hear it from one of the pair who coined the term originally. A few quotes:

How have attitudes shifted since you first made your predictions?
Attitudes have changed considerably. Traditionally, economists have stated that if the price of a commodity is high, you should be able to produce more of it. However, this doesn’t necessarily hold true for a finite resource. Previous IEA and EIA estimates suggested that by 2030, oil production would have reached 120 million barrels per day. They have since revised their estimates to 95 million barrels per day: a reduction of 25 million barrels per day.
...
Do you think that sufficient measures are being taken by policymakers to plan for our transition to the second half of the age of oil?
No. It is clear that in this respect, we have a big problem. It is very difficult for any politician to admit that something is wrong, and that we might need to do something about it. If they were to do this, another politician would come along and say, ‘There’s no problem; vote for me and we can carry on as we are’.

This is the democratic dilemma. Drastic action is necessary, but it is very difficult to achieve. Education will be crucial if we are to succeed in implementing the required measures. Alternatively, it might take a crisis to precipitate change.
This last point is key - how can a politician get elected by telling people that they must consume less and pay more for it? Or is a crisis the only option?

You can read the full interview at Science Omega.
Los-angeles-oil-rigs

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Wednesday 29 May 2013

UK gas supply and prices for winter 2013/14

Yeah, yeah, I know summer's not even started yet, but the UK gas markets are already planning ahead to next winter. Time to take a first look at how things are shaping up...

As you will remember, winter dragged on a bit this year in the UK, and it was only seven weeks ago that our gas supplies were running on empty. As I noted at the time, this leaves us with a problem, as there is now not enough time to easily refill the long range gas storage before next winter, as there are technical limits to how fast gas can be injected back into the store at Rough.

To illustrate the problem here's a graph showing long range gas stock levels for the past few years (click for a larger version):

UK long range gas storage level 29 May 2013
As you can see, we are starting from an all-time low and are several weeks behind the next worst case (which was 2010). Here's another graph showing the rate at which gas has been injected into Rough since the cold weather stopped:
UK long range gas storage injection rate 29 May 2013
Centrica have actually been making a good effort to get gas in there as fast as possible, actually setting a new record on 1 May, but there have still been some blips due to cold weather or other issues that have slowed things down.

So how has this been affecting price? The exceptionally low storage level following last winter represents itself as extra demand in the gas market between now and next winter, so it's no surprise that average wholesale prices are up 23% for the year to date compared to 2012:
UK gas buy price 29 May 2013

This can only translate into higher bills eventually, although the bumper profits made last winter may result in a short delay before this happens. Boosted gas prices will feed through into electricity prices too.

So what can you do? Well, the message hasn't changed - insulate and draught-proof your house, upgrade your heating controls and thermostats, get a new boiler if you need to. Switching supplier will make little difference, especially in the long run, so the only answer is to use less gas.

I'll post more updates over the summer when I see how things are going in preparation for the coming winter.

Mike

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Friday 19 April 2013

The real reason we won't stop climate change

Note that I said won't, not can't. We have the technology we need to shift to a renewable-energy powered society, though it would certainly be hard work. And there would also need to be changes in the way we live. But it could be done, if we were willing. However, 'we' includes every individual and organisation, and it's not the hard work that's putting some of them off, it all comes down to money...

This isn't new, but it was on the BBC news today, so I thought it was worth mentioning:

Some 60% to 80% of fossil fuel reserves owned by listed firms could be classed as unburnable if politicians stick to CO2 emission limits, a report warns.

The research by the London School of Economics and NGO Carbon Tracker says firms spend billions of pounds of shareholders' money on exploration.

It says 200 listed firms spent £440bn in 2012 chasing more coal, oil and gas.

It says if this continues for a decade - and if CO2 limits are achieved - they would waste over £4tn.
...
To stick to the current agreed global limit on emissions - which is sure to be breached - the firms would probably be able to emit no more than about 125-275 billion tonnes of CO2 - about a quarter of their assets.
...
The authors say the current fossil fuel business model assumes that there are no emissions limits.
Coal yard - geograph.org.uk - 190817

This was written about last year in Rolling Stone:
We have five times as much oil and coal and gas on the books as climate scientists think is safe to burn. We'd have to keep 80 percent of those reserves locked away underground to avoid that fate. Before we knew those numbers, our fate had been likely. Now, barring some massive intervention, it seems certain.

Yes, this coal and gas and oil is still technically in the soil. But it's already economically aboveground – it's figured into share prices, companies are borrowing money against it, nations are basing their budgets on the presumed returns from their patrimony. It explains why the big fossil-fuel companies have fought so hard to prevent the regulation of carbon dioxide – those reserves are their primary asset, the holding that gives their companies their value. It's why they've worked so hard these past years to figure out how to unlock the oil in Canada's tar sands, or how to drill miles beneath the sea, or how to frack the Appalachians.

If you told Exxon or Lukoil that, in order to avoid wrecking the climate, they couldn't pump out their reserves, the value of their companies would plummet. John Fullerton, a former managing director at JP Morgan who now runs the Capital Institute, calculates that at today's market value, those 2,795 gigatons of carbon emissions are worth about $27 trillion. Which is to say, if you paid attention to the scientists and kept 80 percent of it underground, you'd be writing off $20 trillion in assets. The numbers aren't exact, of course, but that carbon bubble makes the housing bubble look small by comparison. It won't necessarily burst – we might well burn all that carbon, in which case investors will do fine. But if we do, the planet will crater. You can have a healthy fossil-fuel balance sheet, or a relatively healthy planet – but now that we know the numbers, it looks like you can't have both.
So what it comes down to is that it's not just that our electricity supply, transport, food production and manufacturing is tied to fossil fuels, it's that a massive chunk of the world's economies are also inextricably linked to them too. If we ever acknowledge the problem and decide to leave some of these resources in the ground, the value of stock markets, pension funds and much else will plummet, as the amounts to be written off dwarf what happened in the 2007-present financial crisis.

I can only think of a few ways this pans out, and none of them are pretty. For example:
  • We do nothing, climate change accelerates, and by the time we realise we need to change it is too late. Unpredictable weather reduces food supplies and causes localised disasters, eventually impacting the economy sufficiently that fossil fuel extraction slows.
  • We have a global economic crash, caused by some other factor, and as a result fossil fuel extraction reduces. But this comes at a heavy price, and if we want to build a renewable energy infrastructure that will support us, we need a working economy while we do it.
  • We agree, globally, that fossil fuel extraction is reduced by a few percent a year. Note that I say extraction, not consumption. The only way to make this work is to get less out of the ground, so that prices stay high and encourage reductions in use. We'd probably focus on coal first, as that's where most of the potential lies. Of course, this will not be pain-free, it would change economics completely, would reduce overall economic activity every year, and would make many assets useless, such as recently built coal power stations.
A recent story in the Guardian covers the same ground from a different angle:
The industrial revolution that kick-started the human impact on the climate was driven by just such a feedback. The steam engine enabled us to drain coal mines, providing access to more coal that could power more steam engines capable of extracting yet more coal. That led to better technologies and materials that eventually helped ramp up production of oil as well. But oil didn't displace coal, it helped us mine it more effectively and stimulated more technologies that raised energy demand overall. So coal use kept rising too – and oil use in turn kept increasing as cleaner gas, nuclear and hydro came on stream, helping power the digital age, which unlocked more advanced technologies capable of opening up harder-to-read fossil-fuel reserves.

Seen as a technology-driven feedback loop, it is not surprising that nothing has yet tamed the global emissions curve, because so far nothing has cut off its food supply: fossil fuels. Indeed, though our governments now subsidise clean-power sources and efficient cars and buildings – and encourage us all to use less energy – they are continuing to undermine all that by ripping as much oil, coal and gas out of the ground as possible. And if their own green policies mean there isn't a market for these fuels at home, then no matter: they can just be exported instead.
...
Even the UK, with its world-leading carbon targets, gives tax-breaks to encourage oil and gas recovery and has been growing its total carbon footprint by relying ever more on Chinese factories – and therefore indirectly its reliance on American and Australian coal. And not just that. Although it rarely gets commented on, Britain – along with other supposedly green nations such as Germany – regularly begs Saudi Arabia and the other Opec nations to produce not less oil, but more. As journalist George Monbiot once put it, nations are trying simultaneously to "reduce demand for fossil fuels and increase supply".
It does seem that as we add renewables, they are in addition to fossil fuel use, not instead of, and haven't made any real difference to actual CO2 emissions - check out the graph in the Guardian story above.
Rapeseed crop near Drax - geograph.org.uk - 750915

I think the only thing we can do is to challenge people in government and industry who support tackling climate change to face up to this issue. Where we go from there is unknown...

Mike

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Wednesday 10 April 2013

Energy crises popping up across the world

While most people interested in energy in the UK (myself included) have been focused on our gas supply issues, with the unseasonably cold March, events have been unfolding in other countries that may be a cause for concern.

During past price rises in the price of energy and problems in global supply, poorer countries have often acted as 'canaries in the mine', as their relative lack of financial muscle exposes them to the risk of shortages much sooner than rich countries. This is not surprising, given that our energy markets impose 'rationing by price' when demand rises, supply falls, or both happen at once.

Over the past week, there are three stories that have come to my attention, in Jordan, Thailand and Egypt:

Jordan

Amman


According to Reuters, Jordan is in the grip of an electricity supply crisis:
The resource-poor kingdom, which imports 97 percent of its energy, has in the past two years seen the annual cost of those purchases soar above $5 billion (3.3 billion pounds) - equivalent to about 15 percent of its gross domestic product - after supplies of cheap Egyptian gas were disrupted by sabotage of a pipeline to Jordan.

Dependent now on costly diesel and fuel oil, Jordan is considering wider electricity rationing and is preparing a hike in electricity prices in June, a politically fraught move in a country which saw street protests last year over fuel subsidy cuts imposed as a condition for a $2 billion IMF loan.

"Energy is the Achilles heel of the Jordanian economy, it's a huge vulnerability for Jordan...the biggest drain on the economy," Nemat Shafik, deputy head of the International Monetary Fund, said during a visit to Jordan last month.
Interestingly, it is provoking some positive responses, such as improvements in energy efficiency and plans to build large solar farms, but sadly they are still focusing on fossil fuels, for example: pipelines to import crude oil and plans to develop shale oil and gas. Jordan is actually in a similar situation to the UK, only worse, as it seems to have been getting most of its gas through one major import route, while the UK has several. But the lesson is there - if you depend on imports, then disruption to them can turn into a serious problem very quickly.

Thailand
Natural gas separation plants

Another Reuters story covers the trouble in Thailand, where technical problems at gas fields in Myanmar have resulted in a shutdown of gas supplies right at the peak of electricity demand.
Government electricity-saving plans - including agreements with factories such as a Thai unit of Toyota Motor Corp to stop operations on April 5 - may prevent blackouts in the short term but point to the potential long-term economic impact.

The supply crunch also highlights the difficulties in securing alternatives. Liquefied natural gas is much more expensive, while cheaper coal faces strong opposition after problems caused by pollution in the early 1990s at a coal-fired power plant.
As in Jordan, they are considering other options, but not many of them are renewable:
To strengthen electricity security, Thailand aims to develop an ASEAN power grid to link transmission systems among Southeast Asian countries, said Pongdith Potchana, deputy governor at the state-run Electricity Generating Authority of Thailand.

Thailand has already signed deals to buy up to 7,000 megawatts of power from Laos and is aiming to buy either hydro or coal-fired power from Cambodia and Myanmar, he added.

But for real security, Thailand needs to double its electricity generation capacity to 70,000 MW by 2030 and the most cost-effective way to do that - and the most controversial - is through coal-fired plants.

Imported coal provides power at 2.94 baht per kilowatt hour, cheaper than 3.96 baht for natural gas, as well as the 3.00-5.20 baht for biomass and wind power and the 12.50 baht for solar energy, according to government data.
...
Another way the government can tackle the looming gas shortage is to dampen demand by allowing prices to rise. It has said it wants to raise prices of cooking gas, or liquefied petrolem gas (LPG) and natural gas for vehicles to reflect costs.

Egypt
Cairo International Airport 03

Meanwhile, Alternative Energy Africa reports on the situation in Egypt, where there is no single cause for the crisis:
The Egyptian government has announced that it will close the Cairo International Airport beginning on June 1 from 1:30 am to 5:30 am in order to save electricity; however, one lane at the airport will remain in operation to receiving incoming flights.

While the airport has not been hit by the power outages that have affected the rest of the city because of back-up generators, the energy situation in Egypt continues to deteriorate. Over 95% of the population has access to electricity, but the rising demand has crippled the already battered economy. Previously, the government announced that it would cut power from shops at 9 pm each night, but business owners protested against the change since many places depend on the active Egyptian night time to conduct operations.
In some ways this is worse than a specific technical or political problem restricting energy supplies, as there are no quick solutions to increase supply. Of course, this is also the situation for the UK in the next few years, as we face an ageing energy infrastructure here too, with power stations closing and not many new ones opening that don't rely on imported gas...

Mike

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Sunday 7 April 2013

Britain's biggest gas storage runs out of normal supply

Following up on my post on Friday, here's a report from Reuters with more details:

Britain's biggest gas storage site ran dry of normal supply on Friday and is using gas usually reserved for the technical operation of the site, National Grid data showed.

Unusually cold weather in Britain has boosted gas consumption, forcing the Rough storage site off Scotland's east coast to take the unusual step of dipping into its so-called cushion or base gas.
What's very useful is that they got some figures out of Centrica on how much of this 'cushion gas' can actually be extracted:
"There is potentially an additional 1.1 TWh (terawatt hours) (100 million cubic metres) that could be produced from the Rough reservoir below this opening stock level... The opening stock published by National Grid may ultimately be at -1 TWh)," Rough operator Centrica said in a regulatory update on Friday.

They finish up by saying:
Gas traders said next week a planned strike by workers on Norway's offshore gas fields could hurt gas flows to Britain.

Supply could also be impacted by unplanned outages because of technical problems that are a regular occurrence in the vast network of gas platforms and pipelines that crisscross the North Sea.

However forecasted milder weather and two deliveries of LNG to Britain due next week could take pressure off prices, traders said.
So, we can draw a further 100mcm, or 1,100 GWh out of Rough below 'zero'. By 6am on Sat 6 April 2013 we'd already drawn 290 of these GWh of gas out of there, as shown by this screenshot taken from the Prevailing View page:


Thankfully it's warming up now, because soon this store really will be empty... The problem, and cost, of refilling it in time for next winter still remains though...

Mike

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Friday 5 April 2013

UK long-range gas storage drained

Yesterday (4 April 2013) afternoon, the UK long-range gas storage facility at Rough went 'below empty' for the first time. This is possible because Centrica normally leaves some 'cushion gas' in the depleted Rough reservoir to make sure there’s enough pressure to keep it flowing properly. Here's the status, taken from the Prevailing View page, showing figures valid for 6am on the 3 and 4 April 2013:

UK gas storage 4 April 2013

The 4pm udpate today gives the Long Range stock level as -132 GWh, a negative stock level! I got this from the spreadhseet on this page, as the Prevailing View is being a bit slow to update today - maybe it's struggling over what to do with a negative stock level?

It was clear this was going to happen, because the Entry Zone graphs have been showing gas flowing out of Rough at over 20 mcm/day (image shows 24 hours from 4-5 April 2013):
UK gas flows from Rough 5 April 2013

20mcm is about 220 GWh, so with only 108 GWh in Rough yesterday at 6am, it was clear we were going to dip below zero. The fact that we are now burning through this normally untouched 'cushion gas' reserve is a sign of the problems we have right now, and does not bode well for next winter, as everything that is pumped now ought to be put back in before the end of October to guarantee winter supplies.

According to National Grid, gas can be injected into Rough at a rate of 220 GWh/day, and the maximum capacity is 39,405 GWh. In practice, the injection rate varies according to the stock level, because the more gas is stored, the higher the pressure, so the harder it is to force more gas in. I've plotted injection/withdrawal rates vs. stock level from 2007 to date on the graph below (click for a larger version on Flickr):
UK Rough gas storage withdrawl-injection vs stock level

As you can see, the injection rate can get up to around 300 GWh/day when the store is nearly empty, but drops steadily towards 220 GWh/day as it fills, and drops quickly to 100 GWh/day when it is nearly full. Withdrawals are relatively unaffected by stock level - they are lower at the top end simply because demand is lower, and there are tentative signs of them dropping off a bit at the bottom end, presumably because of the falling pressure.

Anyway, if we assume 220 GWh/day is an average value, this implies 179 days, or about six months, to refill from empty. This year, we will be starting from below what is normally considered 'empty', so it seems unlikely that we will be able to refill the long-range stores by the end of October. Another barrier to refilling storage is planned outages, with the UK's Teeside gas terminal undergoing maintenance from tomorrow and possible reductions in Norwegian gas supplies to the UK from Monday, according to Reuters.

Combine the above with the shutdown of several GW of coal-fired power stations in 2013 and the continuing decline in North Sea gas output, and it is clear that wholesale gas prices are going to stay very high throughout 2013. This will inevitably feed through into higher gas and electricity prices for domestic and business customers, as the alternative is to let the lights go out.

The only action that can be taken in the time available is to launch a crash-programme of energy saving between now and Autumn, insulating homes, improving heating system efficiency and persuading people to wear warmer clothes and turn the thermostat down. Doing this brings a direct benefit, as your heating bills will come down, and if enough of the UK population does it, the reduced demand could help reduce wholesale prices too, as we will be able to import less gas.

Will this action be taken by more than a handful of people? Sadly, I doubt it, as nobody in a position of power is pushing for it.

Mike

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Wednesday 3 April 2013

April brings more UK gas supply problems

In case you hadn't noticed, winter is not yet over in the UK, and today seems to have brought some new gas supply problems, though there have not been any public announcements about them yet. Below is the raw data, screen-captured from a National Grid website at 10am on 3 April 2013, with some commentary from me.

Here's the first problem - the Bacton interconnector is not flowing (again) - just like on 22nd March. You can see that hte Bacton BBL pipeline has stepped up a bit, but not enough to compensate:

Bacton gas supply graphs

On top of this, the Langeled pipeline has dropped off a bit:

Easington gas supply graphs

Also, one of our own gas field terminals, St Fergus, is showing lower flow, which can only add to the problems:

St Fergus gas supply graphs

Fortunately we have plenty of gas in the LNG stores at the moment, and extra supply is coming online as I type this...

LNG gas supply graphs

Long Range Storage (from Rough) has also started flowing again - but bear in mind that it is all but empty, so can't do this for long.

LRS gas supply graphs

The Medium Range Storage is a bit more healthy, and significant flows are coming out of these stores now:


So it looks like we're coping OK for now, but it really doesn't help the situation - in a normal year we'd be refilling gas storage by now, ready for the coming winter, but right now we're drawing the dregs out of it... Hopefully the Bacton pipeline will come back on soon - I'll keep this site updated.

Mike

UPDATE: Gas imports through the Bacton Interconnector restarted at 17:00 BST, albeit at a low level. Tomorrow's update from National Grid will show how much storage went down as a result of the lack of imports today.

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Saturday 30 March 2013

UK Energy Trends: the decline continues

A couple of days ago the latest UK government Energy Trends publication was released by DECC. As is now normal, it does not make cheery reading...

Production

Here's the headline figures for 2012 UK energy, compared to 2011:
  • Total energy production down 10.5%
  • Oil production down 14.5%
  • Gas production down 14%
  • Coal production down 10%
  • Hydro, wind and solar generation up 21%
So, bad news on fossil fuel production, but at least renewables are growing. But note that even after this growth, renewables only supplied 11% of electricity in 2012, and a much smaller percentage of total energy, so there's still some work to do there!

There are also figures focused on the fourth quarter of 2012, comparing it to Q4 2011. The results there are even worse than for the year as a whole:
  • Total energy production down 14%
  • Oil production down 20%
  • Gas production down 21%
  • Coal production down 10%
  • Hydro, wind and solar generation up 7.5%
Gas production was much lower due in part to the leak at the Elgin platform, which is now gradually coming back into production, so hopefully the decline through 2013 won't be quite so severe. However, gas demand will be increasing, due to the closure of coal-fired power stations.

Imports

Here's the figures for how much we were importing, given for 2012 as a whole and then for Q4 2012:
  • 43% of all energy was imported through 2012, rising to 48.7% in Q4
  • About 39% of oil demand was met by imports, falling to 36% in Q4 as refinery demand reduced after the closure of Coryton refinery
  • About 47% of gas demand was met by imports, rising to 55% in Q4
  • About 70% of coal demand was met by imports, falling to 64% in Q4
Of course, the declines in oil and gas production are not just down to depletion, there have also been various technical problems and accidents, as well as maintenance. But these events are not one-offs, they happen every year as our energy infrastructure ages...

We're also a net importer of petroleum products, such as petrol, diesel and jet fuel, after the Coryton refinery shut last year - so the reduction in oil import dependency was offset by an increase in dependency on imports of the finished products.

Electricity

Looking at electricity in more detail, a few key points are worth noting:
  • Coal's share of electricity generation increased from 29.5% in 2011 to 39.3% in 2012, while gas went in the opposite direction, from 39.9% to 27.5%. This was due to price variations and upcoming carbon taxes for burning coal, combined with the remaining hours left to run on coal plants opting out of compliance with the LCPD. As many of these plants are closing during 2012 (some have already closed), the balance may be expected to swing from coal back to gas again in 2013.
  • Net imports of electricity doubled from 2011 to 2012, and represented 3.4% of total supply.
  • Installation of renewable energy capacity is still going ahead quickly, and new record generation was recorded, but it is still a relatively small proportion of overall energy.

Summary

Well, what can I say? We're producing less, importing more, but only using a little bit less energy. With the various ongoing gas supply problems I've been reporting on this blog, it is imperative that the whole of the UK takes action to reduce energy use, particularly for heating and electricity, before we get to winter 2013/14. The alternative is that we pay more. A lot more.

Oil rig: Erik Christensen



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Friday 29 March 2013

UK gas stores running down in continued cold weather

Lots of gas was drawn out of storage in the past two days. The previous lowest storage level on record was 17 March 2010, when we had a total of 4,932GWh, split as Long Range Storage (LRS) 2959, Medium Range Storage (MRS) 1357, Short Range Storage (SRS) 616

The 4pm update on 28 March 2013 showed 3,399GWh in storage, split as LRS 1150, MRS 2200, SRS 49, so that's a new record low.

Also, by 28 March 2010, over 3,200GWh had already been reinjected to stores after the low, whereas this year it looks like we won't be putting much back in through the whole of April...

Even if we scrape through the remainder of this winter, we are not in a good position already for next winter...

Get the latest data here: http://marketinformation.natgrid.co.uk/gas/frmPrevalingView.aspx

Snow blizzard

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Monday 25 March 2013

LNG to the UK's rescue this week?

Some positive news on UK gas supply from Reuters today:

The first of a trio of tanker loads of super-cooled gas from the world's largest LNG exporter docked at the Isle of Grain terminal near London on Sunday, with a second due in Wales on Monday and a third on Friday, tracking data on Reuters shows.

The Qatari tankers could supply a total of around 430 million cubic metres (mcm) of gas to Britain over the next week, compared with daily gas demand of around 370 mcm, while another tanker has set sail from Trinidad on Saturday after UK gas prices leapt on Friday when a key supply link from Belgium shut unexpectedly for 8 hours.
Lng tanker

Of course, the key is that it's only because wholesale gas prices have been so high in the past few weeks that it's arriving:
But it may take sustained high UK wholesale gas prices to lure many more gas tankers away from consistently higher paying buyers in Asia to the UK.
I expect this will enable the UK to scrape through this week's cold weather, and no doubt the government will declare that the market has 'worked'. I imagine many customers will question how well it is 'working' though when their inflated gas bills arrive later this year...

We'll need to keep prices high to keep the LNG arriving and the import pipelines flowing, as the weather is expected to stay colder than average for a few weeks yet. And there's that Norwegian shutdown looming next Monday as well...

Fundamentally we are now in an international bidding war, and we either pay up or the lights go out next winter. Of course, we could always try using less energy, but that doesn't seem to be a very high priority for the government right now...

Mike

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Friday 22 March 2013

Bacton gas outage - how well did we cope, and what next?

Earlier today I wrote about an outage at the Bacton Interconnector, which imports gas from Belgium to the UK. The outage was caused by the failure of a simple pump, but couldn't have come at a worse time, given the low amount of gas in UK storage and the ongoing cold weather. So how did the UK and National Grid cope with the outage, and what are the consequences? The following graphs were all screen captured from National Grid's Instantaneous Flows Report in 24-hour view at about 7:30pm on Fri 22 March 2013.

This first one shows the problem - the blue line represents gas entering the UK via the Bacton Interconnector. From about 7am to 2pm there was little or no gas coming through, compared to the rest of the day when the flow was about 70mcm/day. So that's about 20mcm that had to be found from other places to meet today's UK gas demand (which is high, due to the cold weather). Demand today was around 350mcm, so this was just under 6% of the day's demand that went missing.

National Grid UK gas graphs Fri 22 Mar 2013

Well, clearly the lights didn't go our (remember that about a third of our electricity is generated by burning gas), so what happened? Well, the first thing was that gas started flowing out of Long Range Storage, which is actually an old gas field called Rough. There was no gas coming out of this prior to the Bacton outage, but about an hour after it, flows started and ramped up close to maximum for the duration of the outage, and stayed a bit above half maximum afterwards. To put this in context, if gas was drawn from LRS at maximum rate continuously, we only have enough in it right now to keep going for about 5 days.

National Grid UK gas graphs Fri 22 Mar 2013

A little bit later on, extra gas started flowing from one of the Liquefied Natural Gas (LNG) terminals. This is gas that arrives on tankers from Qatar and other places, is pumped into storage vessels and released gradually as required. However, we've not been able to import much LNG in the past year, as Japan is buying a lot of the global supply, to replace the output of the nuclear power stations that were shut down after Fukushima. There's about 65% more gas in the LNG stores than there is in LRS right now. At the time of writing the flows coming out of LNG were about 18mcm/day, at which rate the stocks would last about 21 days - but with more cold weather coming, the withdrawal rate could increase.

National Grid UK gas graphs Fri 22 Mar 2013

As the outage continued, gas also started flowing from the Medium Range Stores. There's currently about the same amount of gas in MRS as in LRS, but it can be released faster when required - though clearly that would only then give us a few days' supply.

National Grid UK gas graphs Fri 22 Mar 2013


This final graph was from one of the links on National Grid's Prevailing View page. The black line indicates actual flows, and the orange line indicates the estimate for the day's gas demand at that point in the day. The effect of the Bacton outage is clear, as is the increased supply post-outage to compensate for what went missing.

National Grid UK gas graphs Fri 22 Mar 2013
So the good news is that the 'market' worked, and enough gas arrived despite the outage. The bad news is that the extra supply came out of storage and LNG, reducing stocks. This is a problem because the coming week is forecast to be unseasonably cold for March - check out the 'feels like' temperature map at the Met Office. Add to this the fact that one large coal power station shut for good today (Didcot A, 2,000 MW), and others are to follow - so that means more gas being burned to generate electricity.

So, we have a tight week ahead for gas and electricity supply in the UK, with the cold weather. What about after that? I'm sure we're all hoping Spring will arrive eventually, and be followed by a decent summer. But even if everywhere is lovely and warm, there's still a job to be done - refilling the gas storage and getting the LNG stores back up to a decent level. This will be expensive work - we need to import a lot of gas to do this, and ultimately it's you and I who are going to pay for it, one way or another. But it's not even that simple sadly... Norway needs to take about 40 mcm/day of production offline from 1 April to 2 August to carry out maintenance. This is bound to reduce availability to some extent in the European gas market, so can only push prices higher, and perhaps even limit what it is possible for us to put back into the gas stores before next winter.

Let's hope the summer is a warm one...

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Problem with gas imports at Bacton Interconnector?!?!

OK, this is a bit scary - I just finished writing my previous post, and then went to the National Grid web page that shows live data about gas flow, and was alarmed to see this graph:

Gas flows at Bacton Terminal 7:20am 22 Mar 2013

What it shows is imports from the Bacton Interconnector falling from nearly 80 million cubic meters (mcm) per day down to zero. To put this in perspective, UK demand today is expected to be about 327 mcm, so that's a quarter of today's gas supply gone missing.

No new response at the time of writing from storage sites, and nothing in the news yet... Let's hope they get it back online soon, or we really may have a problem right now...

UPDATE: the mainstream media has caught up with me:
Britain's wholesale gas prices surged to a record high on Friday, after one of its three gas import pipelines shut down unexpectedly.

The operator of the UK-Belgium Interconnector pipeline said a technical problem had forced the shutdown, without giving more details.

If the pipeline remains shut for a number of days, Britain's grid operator will be forced to trigger all emergency supply options, including reducing demand from contracted users, which will cause an even higher price spike, traders said. source

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The media wakes up to the current energy shortage

Today Reuters and the BBC realised we don't have much gas left in UK storage. I've been blogging about this on and off for some years now, and in particular over the past month or so, and finally it's deemed important enough to be in the news.

Britain is grappling with a potential gas supply crisis as a late blast of winter depletes stored reserves, coal power plants close and pending maintenance in Norway threatens to further squeeze supply.

The country risks running out of stored gas by April 8 based on the fall in its reserves seen since the cold hit at the beginning of March, Reuters calculations show.

Gas storage sites have been depleted by 90 percent, with the equivalent of less than two days' consumption remaining, data from Gas Infrastructure Europe shows.

If the cold persists, as is forecast, the UK may need to cut gas supplies to some big industrial customers, as it did in 2010 at a time of severe gas shortages. source
The BBC starts with a message from SSE about the impending electricity crunch, and mentions the gas issue later on:
The boss of the energy firm SSE has warned that "there is a very real risk of the lights going out" in Britain.

Ian Marchant said the government was significantly underestimating the scale of the capacity crunch facing the country.

He was commenting on the company's decision to cut back on power generation at five sites.

The energy regulator, Ofgem, has also warned of an increased risk of a blackout.

In February it predicted power station closures could mean a 10% fall in capacity by April alone.

SSE points out that the regulator did not take into account its plans to cut power generation when the warning was issued and that therefore, makes the warning even more stark.
...
SSE is reducing its energy generation by 2,000MW over the next year. The power stations affected are Ferrybridge, Keadby, Slough, Uskmouth and Peterhead. It is also postponing further investment in gas-fired electricity generation until at least 2015. source
Just to make matters worse, the current cold snap comes just as Didcot A coal power station shuts down - it will stop generating at 2pm today,  so that's 2,000 MW of capacity which will need to be replaced by gas from this afternoon.
Aerial view from Paramotor of Didcot Power Station, Dave Price, from wikimedia

Don't forget you can keep an eye on the current gas supply situation on the National Grid website. The next few days are forecast to be very cold - more news to follow as it happens...

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Tuesday 19 March 2013

What does the future hold for UK gas supply?

The gas crunch in the UK continues, with the current cold weather pushing demand up and very low storage continuing to be a concern. An article yesterday in the FT explains the situation very well (note, you can go via Google to avoid the paywall):

When a power cut at the Nyhamna gas processing plant in Norway hit production this month, prices in the UK soared 50 per cent in one day. The plant feeds the 1,200km Langeled pipeline that exports gas from the vast Ormen Lange field to Britain.

The loss in output was shortlived but for many in the UK it was indicative of a more worrying trend: an increasing exposure to new supply risks as North Sea production declines and competition for imports of liquefied natural gas increases.

Coming at a time when ageing coal-fired plants are being retired and new nuclear power faces delays, it raises questions over energy security, as the industry undergoes its biggest changes since privatisation in the 1980s. Alistair Buchanan, chief executive of Ofgem, the electricity regulator, warned of higher energy bills last month ahead of a “horrendous” gas supply crunch.
These are all issues I've written about recently on this blog, here and here. Just to summarise, these are the key problems that affect the UK at present or in the near future:
  • Gas production from our own fields is falling, often by around 10% a year.
  • Gas supplies from Norway (18-22% of UK winter demand) are subject to interruption, such as the storm-induced power cut mentioned above, and a technical problem in 2010.
  • Gas supplies from Europe by pipeline are subject to political problems, such as past disputes between Russia and Ukraine. They can also be affected by cold weather in Europe increasing demand there.
  • LNG imports have fallen dramatically since Fukushima, as Japan is outbidding the UK for gas.
  • Several of the UK's coal power stations will shut down for good in twelve days, with more to follow in the coming year. Some of our nuclear plants are also nearing the end of their lives.
The situation right now is that UK gas storage is at its lowest level for this time of year since 2010, and we may yet go lower than that, setting a new record. The difference is that our own gas production now is 37% lower now than it was then, comparing Q3 2012 with Q3 2010.

So while we may scrape though the tail end of this winter without any major panics on gas supply (though it's not over till the fat lady sings...), the low level of storage and limitations on supply mean that we are going to have to pay for a lot more gas imports over the coming months to refill the stores ready for next winter. So, we are virtually guaranteed to see higher domestic gas prices this year, and because about a third of our electricity is generated from burning gas, we will see prices rise there too, especially due to the shift of generation from coal to gas that will happen shortly.

If you've not already insulated and draught-proofed your home, now might be a good time to start...

Mike

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Friday 8 March 2013

UK gas crunch...

Gas supply is looking very tight for the next few days...

Forecast demand is:
Sat: 300mcm
Sun: 320mcm
Mon-Wed: 360-370mcm

Bearing in mind how low storage is, and that the margin notice trigger level is currently around 400mcm but will drop as storage depletes, I wouldn't be surprised if we have a gas demand warning by the end of next week...

More live gas info at http://marketinformation.natgrid.co.uk/gas/frmPrevalingView.aspx

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Monday 4 March 2013

UPDATE: UK Gas Jumps to Seven-Year High as Norway Cuts Supply

Quick update to my earlier post, prices have gone even higher, and there's more info on what's going on from Bloomberg this time:

U.K. natural gas for within-day delivery jumped to the highest level since March 2006 as Norway cut supplies following a power failure at its Ormen Lange gas field in the North Sea.
...
Production from Royal Dutch Shell Plc (RDSA)’s Nyhamna gas processing plant in northern Norway, which handles fuel from Ormen Lange, is reduced by 53 million cubic meters a day today and 37 million tomorrow after storms caused a failure in the national power grid, according to Gassco AS. Output was cut by 57 million yesterday and 32 million on March 2, it said.

“The timing and extent of these offshore outages has unsettled a lot of people,” Craig Lowrey, a consultant at The Utilities Exchange Ltd. in Ipswich, England, said in a telephone interview today. “It highlights the nervousness of traders that we have seen this response.”
...
Inventories at Rough, the U.K.’s largest gas-storage facility, were at 6,909 megawatt-hours yesterday, the lowest level for the time of year since at least 2004, National Grid Plc (NG/) data show.

Start saving for your new gas bill now...

Mike

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UK gas hits five-year high as unplanned outages squeeze supply

Just when you thought that there would be no gas supply problems, as winter was over...(see my earlier post on this)

Norway's Nyhamna gas plant connected to Shell's giant Ormen Lange field in the North Sea, which primarily exports gas to Britain, had an outage on Saturday after stormy weather, with production still down by around 53 mcm/d on Monday. The capacity of the plant is 70 mcm/d.

"It's the Nyhamna outage, Ormen Lange's processing plant. With storage so low and Norway running 100 percent it's gone mental," said one British gas broker.

In addition to the Norwegian outage, flows through Britain's St. Fergus terminal were reduced by around 7 mcm/d on Monday, creating an extremely tight supply situation.

Read the full story at Reuters, and keep an eye on the situation here and here.

Mike

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Tuesday 26 February 2013

Keeping an eye on UK gas supply...

Although winter should be nearly over in the UK, it's still pretty cold, and has been for much of the time since early January. As a result, while UK gas storage was looking pretty healthy earlier in the winter, it's now (again) at the point where it needs to warm up pretty soon or there are going to be some demand reductions enforced on industry.

The trigger level for issuing a Gas Demand Warning has fallen from 473 mcm/day (million cubic metres of gas per day) as recently as 9 Feb 2013 to only 395 mcm/day for 27 Feb 2013. Although demand is some way short of that (352mcm on 26 Feb), the gap between demand and trigger is now tighter than it has been at any other point so far this winter.

This is underlined by the amount of storage left at present (26 Feb):

  • Long range: 8,931 GWh out of ~40,000 max
  • Medium range: 2,871 GWh out of ~12,000 max
  • Short range: 203 GWh out of ~350 max
For comparison, that total GWh storage is equivalent to about 1,100 mcm, or just over three days gas at present consumption. So as you can see, it only takes one industrial accident or a change in gas trading to cause a problem. Let's hope it warms up soon...

If you'd like to view the raw data for the above yourself, you can view the 'Prevailing View', which summarises the current state of the gas system, here. Screenshot:

Also useful are the Entry Zone Graphs, which allow you to view the last few minutes, hour or 24 hours of gas supply, including that coming out of storage. Screenshot:

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