TBE Process. Dec: Publish Ten Year Statement Oct/Nov: Review Investment Plan. Feb/Mar: Consultation

Transcription

1 TBE 2008

2 TBE Process Dec: Publish Ten Year Statement Oct/Nov: Review Investment Plan September?: Long Term Auctions July 10th: Industry seminar Feb/Mar: Consultation Apr/May/Jun Demand & Supply Forecasts Outline investment proposals

3 TBE 2008: Demand Forecasting

4 Forecast demand (November update) Actual Forecast 1000 Throughput (TWh) DN Firm DN Interruptible NTS Industrials NTS Pow er Irish Exports Continental Exports

5 Sector Share of Forecast Gas Demand Growth (excluding exports) 30% 58% 2% 10% DN Firm DN Interruptible NTS Industrials NTS Power

6 Energy Efficiency

7 Historical DN demand TWh per annum Firm Interruptible Shrinkage

8 Energy Efficiency Further falls in NDM gas demand in 2007 Need to consider the effect of energy efficiency in the forecast Standard of living / comfort v energy efficiency Technologies Insulation Lighting: Compact fluorescent & LED Smart meters/intelligent heating controls Domestic CHP Efficient appliances

9 Fuel Prices

10 Wholesale fuel prices p/therm Jan Apr Jul Oct Jan Apr Jul Oct Jan Apr Jul Oct Jan NBP Day-Ahead Price Sources: Nymex & Heren

11 Fuel Price Forecast (November update) Actual Forecast p/kwh p/th Domestic Small Firm Large Firm Interruptible Beach Pow er NBP

12 Power Generation

13 Power Generation actual demand MCM /10/ /11/ /12/ /01/ /02/ / MWh Low Base case High Spark - Dark spread Actual

14 Plant Margin - Generating Plant Closure 20% 15% 10% 5% 0% -5% -10% -15% -20% 2006/ / / / / / / / / / / /21 Demand Nuclear Coal & Oil Gas

15 2020/21 Plant Margin New Generation 30% 20% 10% 0% -10% -20% 2006/ / / / / / / / / / /17 Gas Coal Nuclear Wind Mothballed Plant Existing

16 Generation output by fuel Other Wind Gas Coal Nuclear 2017/ /17 TWh 2007/ / / / / / / / /16

17 Nuclear power Closures 7.4 GW of plant to close by 2020 (assumes five-year extensions for AGRs) leaving 3.6 GW of existing plant. New Nuclear Connection agreements with British Energy 10.8 GW from 2016 at four sites Now a question of when and not if...

18 Climate Change Targets

19 EU renewable energy targets 20% of EU gross final energy consumption from renewable sources by 2020 Includes heating, lighting, industry, agriculture, transport, distribution losses and energy used in energy production. UK target 15% (1.3% in 2005) 10% of vehicle fuels from bio-fuels Will require 30-40% of electricity generation from renewable sources Renewables to be given priority access to transmission and distribution networks.

20 Power Generation - renewables

21 EMO Sensitivities Annual Gas Demand (bcm) Outer Case Central Case Base Case

22 TBE 2008: Gas Supply Forecasting

23 National Transmission System ~ 420km pipe added for 07/08 Current NTS ~ 7,400 km Milford Haven to Aberdulais- 128km Felindre to Tirley pipeline 186km Pannal to Nether Kellet 93km NTS Charge average ~ 1.9p/therm (Entry/Exit & Commodity) Average domestic charge ~ 85p/therm

24 Supply Performance (winter to date) All flows broadly in line with forecasts UKCS in line with forecast Norwegian imports marginally lower than forecast due to higher flows to Continent Continental imports in line with forecast with higher BBL offsetting lower IUK imports. Higher IUK post January 1 st Intermittent LNG imports via Grain, no Teesside GasPort Storage flows in line with demands Release of discretionary interruptible capacity Interruptible scaleback at ASEPs

25 Summary Weather warmer than average Gas Dragon LNG, South Hook and Aldbrough delayed until 2008 UKCS and storage use in line with forecast Introduction of Transfers and Trade, main impact at Isle of Grain

26 All Supplies 500 Highest demand day December 17 th, 419 mcm/d mcm/d Oct-07 Nov-07 Dec-07 Jan-08 Feb-08 UKCS Estimate inc Tampen Norwegian Estimate BBL IUK LNG Storage

27 Gas Demand vs Seasonal Conditions mcm/d Oct 01-Nov 01-Dec 01-Jan 01-Feb 01-Mar 01-Apr NDM* DM (excl. interconnectors)* Storage Injection Interconnectors Export SND Cold demand Warm demand

28 Remaining UKCS Reserves and Production Import Requirement

29 Actual UKCS/Imports - March 1996 to Present 5-10% Jan UKCS volume decline year-on-year

30 Grain LNG flows to date Grain Flows SAP Winter 05/06 and 06/07 consistent flows, summer intermittent Summer 07, Winter 07/ * More attractive prices/markets * Increased Far East demand 140 mcm/d July 05, first flows * Tight LNG supply * Commercial regime SAP p/therm Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 0

31 Norwegian (est) Average over Oct-Jan, near identical Langeled completion Tampen operational

32 Norwegian Euro Flows

33 BBL flows Additional compression BBL operational Contractual?

34 IUK

35 Base Case 2007 UKCS declines continues Assume Norwegian volumes underpin import deliveries Troll project cancelled, lower long term volumes to Europe/UK? LNG flows more variable due to competition from alternative markets, LNG supply tightness BBL volumes initially more certain pending possible reverse flow capability IUK more price/market driven

36 UKCS decline and potential import make up (Base Case)

37 UK Import Flows (Gas Year)

38 Import Capacity build-up Dragon expansion Canvey Teesside Fleetwood BBL expansion Other Grain expansion Dragon South Hook

39 Import Capacity build-up (load-factors) LNG, 50% 80%

40 Storage developments

41 Storage/Import changes 1:8 1:8

42 Supply Summary Increasing import dependency First phase of infrastructure projects have provided significant additional capacity Requirement for additional capacity or high utilisation rates of infrastructure in place will be required UK Storage low as a legacy of domestic gas reserves Significant storage projects proposed but even if majority developed, storage level will only be comparable to major European importers Storage and Import projects face significant delays in planning process Significant price volatility