Wednesday, 30 November 2016

UK winter energy supply 2016-17

Following on from my previous post on gas supply, here's an update on the overall energy situation in the UK this winter.

The good news is that the gas storage site at Rough is due to come back online by 9 Dec, according to Centrica. Of course, it's still only 1/3 full, so we're not out of the woods yet.

The bad news is that several nuclear power stations in France have been offline for safety checks for some time now, and the result is that instead of importing up to 2GW of electricity from France, the UK is importing less, or even exporting to France. You can see this live on the graphs at Gridwatch. This extra power is largely coming from our CCGT (gas) power stations, which of course means increased gas use - this was already showing up in the graph I posted a few weeks ago, and has continued since then. (The red line is 2016 - click for a larger version)

It's also proving to be a colder than average winter so far in the UK, so we'll have to wait and see how things turn out over the coming months...

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Thursday, 3 November 2016

Outlook for UK gas supply in winter 2016/17

The UK Met Office has released it's long range outlook for Nov 2016 to Jan 2017, and it's expecting at least the first part of the winter to be a bit colder than average - there's some in depth discussion of it in this BBC video. So now's a good time to review what shape UK gas supplies are in.

A few months ago I commented on the news that the long range storage at Rough was out of action and only about one third full. At the time Centrica was expecting withdrawal from Rough to be possible by 1 Nov, but the latest statement on their website now says second half of November. The graph below (click it for a larger version) shows the storage level in Rough over the past decade, with 2016 in red. As you can see, no gas has been injected for some months, leaving the store short of about 26,000 GWh of gas, which is unprecedented in the past decade.
UK long range gas storage 3nov2016

To be fair, the operators of the medium range storage sites have done their best, with gas stored at record levels - but this only equates to an extra couple of thousand GWh compared to recent years, so does not offset the missing gas from Rough.
UK medium range gas storage 3nov2016

LNG stocks are at a fairly typical level, but these fluctuate as imports arrive periodically - the hope will be that more LNG tankers will arrive this winter than a year ago.
UK LNG stocks 3nov2016

The impact of Rough's outage and low stock is showing up in wholesale gas prices, which have more than doubled over the past two months - this has yet to feed through into consumer bills.
UK gas buy price 3nov2016

The other important factor to bear in mind is what's happening with electricity generation. A significant number of coal-fired power plants have closed in the past year or two, and this is good as they are high emitters of CO2. But the slack has been taken up by gas-fired power plants instead, rather than solely renewable energy or nuclear power. The graph below shows how power station demand for gas is at a multi-year high for this time of year.
UK power station gas demand 3nov2016

So what's the conclusion? Well, if it doesn't get too cold, Rough comes back online as planned, nothing else breaks and we get enough LNG deliveries, then we'll just see prices rise. If one or more of those factors doesn't work out favourably, then it may become necessary to restrict industrial gas or electricity usage, to ensure that gas supply to homes can be maintained. Let's hope and pray that we don't get another winter like 2010/11:


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Monday, 18 July 2016

Bad news for UK gas supply winter 2016/17

If Rough was a car, you'd scrap it and buy a new one. But it's actually the UK's biggest gas storage facility, and supplies up to 10% of peak winter demand for gas. A few weeks ago I wrote about how planned maintenance was preventing Rough being filled with gas until early August. Well, the news has now got worse. The BBC summarises it here, but here's the detail straight from Centrica's website:

On 22 June 2016, CSL announced that in the course of conducting the testing works it had identified an additional issue with one of the wells. This resulted in CSL ceasing all injection and withdrawal operations pending the further testing in relation to the issue identified. This program of testing was estimated to last at least 42 days.
CSL has now ended the 42-day testing program early and has plugged the affected well. However, the affected well has identified potential uncertainties in the remaining untested wells. CSL will therefore continue with an enhanced version of its original calliper run and seal testing program. We estimate completion in March to April 2017. In the meantime because of the uncertainty as a prudent and safe operator CSL cannot inject or withdraw gas from Rough.
CSL is also examining the feasibility of returning a number of wells to service for the Winter 2016/2017 withdrawal season. CSL anticipates it will complete this study by 30 October 2016. CSL currently anticipates that at least 4 wells will return to service for withdrawal operations by 1 November 2016. In respect of injection CSL cannot increase the Rough reservoir pressure during the testing programme.
If you're wondering how big an impact plugging one well is, and what possibly having four wells open in November means, the Operational Guide to Rough from 2015 says that it had 24 operating wells for injection, and 29 for withdrawal. Rough is currently about a third full, so opening some wells for withdrawal in November is of some use, but with no chance to inject any new gas, the UK is going to be left exposed to any further malfunctions or international incidents, and may even struggle to cope with a moderately cold winter. The ability to import LNG will be crucial to maintaining supply over this winter - this may work fine, but will cost us more, as we will have to outbid other countries to make sure we get what we need.

It's worth remembering that in Q1 2016 38% of the UK's electricity was generated by burning gas - this represents 25% of total gas use in the UK (data from here). So a shortage of gas implies a potential shortage of electricity, especially with more of our ageing coal plants having shut down over the past year.

One slightly odd thing is that National Grid's Prevailing View website is missing information on gas storage. One could be forgiven for thinking they're trying to avoid scaring people...

We may get more news, good or bad, on Rough over the coming months, but the key thing to look out for now will be long range winter weather forecasts. Time to start praying for a mild winter I think...

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Friday, 24 June 2016

While you were watching the EU referendum, something happened at Rough...

While we were all caught up in the EU referendum this week, there was an item in the news about the UK's largest gas storage facility, Rough:

Wholesale gas prices have been volatile following news that the UK's largest gas storage facility is being shut down for 42 days.
Normally, gas would be being injected into Rough right now, and was being until a couple of days ago, as you can see from the first graph on this page. The update on Centrica's website says:
In March 2015, CSL began conducting testing and verification works on the Rough wells. In the course of conducting these works, CSL has identified an additional issue on one of the wells tested. As a consequence, CSL has ceased all Rough injection and withdrawal operations. CSL will seek to expedite testing on the issue identified and expects this period of testing to last at least 42 days.
The current restart date is 3 August, but of course it could be later, given the above update says "at least 42 days". If storage isn't filled quickly enough over the summer, we'd better hope for a mild winter, or we might run into difficulties... One thing that's clear is that Rough is showing its age, and has had several mechanical breakdowns in the past 10 years. Worth keeping an eye on over the summer...

Easington Langeled Terminal

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