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UK energy minister outlines key questions for Energy Review

UK energy minister Malcolm Wicks has warned that up to 80% of the UK ’s gas supply could be derived from non- UK sources if the government’s Energy Review, due to be published next summer, does not address key issues of energy security.

Speaking at the Social Market Foundation on Monday, Wicks warned: “As economies like China , India and Brazil expand their thirst for energy increases we’ll be competing with them to secure those supplies across what may at times be unstable borders”. He added that the key questions for the Energy Review would be: how can we speed up carbon emissions reductions, particularly in power generation; how can we develop more effective policies for securing energy efficiency; how can we ensure reasonable reliability of energy supplies; and how can all the above be achieved in an affordable way?

Wicks finished by noting that he wanted a “grown up, informed debate” and added that “I am not interested in spending the next few months responding to those people who have written off this review as a foregone conclusion – or who believe that there is only one”. GR

This article was taken, with permission from Heren Energy from ESGM 19th December 2005.

Record high prices wipe 30 Mm3 off UK gas demand

High gas prices have forced British industry to rein in gas consumption, by around 30 million cubic metres, network operator National Grid announced on Friday. Speaking at a seminar hosted by Britain ’s energy regulator Ofgem, National Grid said November’s cold snap was met by a significant demand-side response, particularly in the power sector.

“We’ve seen up to 30 [million cubic] metres (Mm3) of demand come off that we attribute to the power sector. We’ve also seen a demand side response from the nonpower sector,” said Chris Murray, director of operations and trading at National Grid.

Ofgem confirmed gas-fired power stations had reduced their output. Sonia Brown, director of markets at Ofgem, said: “The evidence is that [demand-side] response did occur. The extent of that response is something that we are still working on… It was clear that CCGTs were responding.” Brown also said from the middle until the end of November beach gas flows delivered around 16% below Ofgem’s winter outlook assumptions.

Between 15th November and 10th December, Brown said more than two-thirds of the UK’s “missing gas” — the discrepancy between actual beach flows and those Ofgem assumed would flow into the UK this winter — resulted from “unplanned outages”.

However, beach flows were now beginning to deliver at the winter outlook assumptions of 303 Mm3, Brown said. “What was of concern for many was that when prices were at their highest, during that period between the middle and end of November, we didn’t see beach deliver at those levels and we saw a lower level of reliability of around 84% against the winter outlook assumptions. That was a key cause for concern for many customers in the market… Sixty-seven per cent of the missing gas was a result of unplanned outages,” she added.

In its calculations for natural gas supplies predicted to enter the UK this winter, National Grid said it had included fields that are not yet producing. “All the data in there is what the industry has been telling us,” a National Grid spokesman told The Heren Report.

Ofgem said it had been working with the Department of Trade and Industry (DTI) to find out why beach gas was flowing at lower than predicted levels.

The DTI expects about a dozen North Sea gas fields to come on-stream by February 2006. BF

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