2010 Winter Outlook & a future view

Transcription

1 2010 Winter Outlook & a future view Place your chosen image here. The four corners must just cover the arrow tips. For covers, the three pictures should be the same size and in a straight line. Presentation to BIEE 8 th October 2010 Peter Parsons

2 Contents Winter 2010/11 Weather Forecast gas demand Forecast gas supply Forecast electricity Supply issues Security of Supply Meeting environmental targets Future scenarios / forecasts Gone Green Slow Progression 2

3 Winter 2010/11 Weather Forecast The Met Office have not issued a specific winter weather forecast for winter 2010/11 But their web site continues to provide longer term weather forecasts For the December to February period their data illustrates for most of the UK: a 60 80% probability of above normal temps a 20 40% probability of near normal temps a 0 20% probability of below normal temps In terms of UK precipitation their forecasts are weighted towards above average Probability weighted towards For Europe average temps are typically C above average above average temperatures For North America average temps are up to 2 above average except for a cooler west coast 3

4 Gas - Forecast Peak Demands Due to high power generation, actual highest demand was close to peak 1 in 20 but was not at 1 in 20 type conditions mcm/d forecast for 2009/ forecast for 2010/ forecast for 2010/11 NDM LDZ DM, NTS Industrial & Shrinkage Ireland NTS Power Highest Actual (8th Jan 2010) 4

5 Gas Preferred source of for fuel for Electricity Generation Prices as of 31/08/10 Coal Burn Carbon ( /tonne): 15.2 Gas (p/th) % Coal/Gas Burn Nov - Feb Current - Oct 10 40% CCGT Gas Burn Coal ($/tonne) Gas Range 40% - 55% Gas Favoured Uncertain Coal Favoured 5

6 Winter 2010/11 Supplies 09/10 Base 10/11 Range Base Case UKCS Norway BBL IUK LNG Total NSS Storage Total Peak Demand

7 Gas Storage Storage deliverability (mcm/d) /11 storage reduced at peak due to less LNG and review of actual storage deliverability from all sites /11 storage deliverability profile 2009/10 storage deliverability profile 7

8 Electricity New CCGTs Staythorpe 1700MW Severn Power 850MW Grain units 6,7 and MW West Burton B 1300 MW Severn Power 8

9 Electricity - Assumed Availability Power Station Type Full Metered Capacity (GW) Assumed Availability Assumed Availability (GW) Nuclear % 7.6 French Interconnector % 2.0 Hydro generation % 0.6 Wind generation % 0.3 Coal % 25.1 Oil % 2.2 Pumped storage % 2.7 OCGT % 1.1 CCGT % 24.7 Total Overall availability 85% 9

10 Electricity - 1 in 20 Demand and Assumed Generation Availability Average Cold Spell ACS 57.8 GW Normal peak 56.0 GW /11/10 08/11/10 15/11/10 22/11/10 29/11/10 06/12/10 13/12/10 20/12/10 27/12/10 03/01/11 10/01/11 17/01/11 24/01/11 31/01/11 07/02/11 14/02/11 21/02/11 28/02/11 07/03/11 14/03/11 21/03/11 GW 1 in 20 Demand Short term operating reserve 85% generation with 2GW French Imports 85% generation with 2GW French Exports

11 Winter Outlook 2010/11 - Summary Gas Peak day demand forecast is higher than last year Forecast non storage supplies are higher than last year with potential upsides in LNG Storage deliverability is reduced due to less LNGS and a review of the actual deliverability from all storage sites Forecast spreads between Gas or Coal as base load fuel source for Electricity Generation is very small Electricity Average Cold Spell Demand forecast is the same as last year Notified and Assumed Generation availability is close to last years figures Large potential upside in new CCGT commissioning during the winter Even with the uncertainties the forecast indicate the winter should be manageable But events happen! 11

12 Winter 2010/11 Supply Issues Russia & LNG

13 Russian Supplies 2010/11 Ukraine - Better relationship since election in Jan/Feb 30% discount negotiated in return for 25 yr extension to use of Sevastopol Price too high? but all bills paid on time Emphasis as a reliable transit route IMF funding resumed with $15bn loan. domestic prices raised 50% as a condition 22 bcm out of 36 bcm in Ukrainian storage (2009 ~ 25 bcm) Foreign minister calls South Stream project wasteful and unnecessary Talks of joint venture to upgrade Ukraine s transit system, but parties poles apart on structure Belarus - 4 day dispute in June 2010, no issues reported since Poland - Currently does not have sufficient contracts to meet demand, ~2.5 bcm shortfall Negotiations ongoing between PGNIG and Gazprom over new contract, EU monitoring 13

14 LNG & Shale the game changer? US LNG import capacity developed to meet longer term US gas shortfall arising through lower indigenous production and lower pipeline imports BUT non conventional US gas developments (notably Shale) have limited US LNG import needs, despite low prices Global recession and low US LNG imports have provided excess LNG to alternative markets, notably UK UK and other spot market gas is now priced much lower than oil indexed contracted gas leading to pressures to break indexation To change the current supply / low price position: Increased global LNG demand China & India Lower US non conventional gas due to depressed US price More managed gas production from producers 14

15 US shale & total production Following years of little or no growth, US gas production is forecast to grow through Shale resulting in lower imports, hence anticipated less need for LNG 15

16 US vs Europe Forward Gas Prices p/th Sep-10 Nov-10 Jan-11 Mar-11 May-11 Jul-11 HH Zee TTF NBP German - Contract 16

17 Security of Supply Several supply issues over previous winters.

18 2007/08 Limited LNG available July 2007 Magnitude 6.6 Earthquake off coast of Japan 8000 MW Kashiwazaki-Kariwa Nuclear plant shutdown Equivalent to about 10 bcm LNG for CCGTs Japan colder than average for Jan & Feb China started taking small volumes of LNG (3 boats per month) Olympics? US volumes (contracted?) held up Limited non contracted supply available. Low UK supplies despite average Dec to Feb prices of over 50 p/therm 18

19 2008/09 Russia Ukraine Payment dispute between Russia and Ukraine led to a cut off in supplies on 7 th Jan 2009 Cut off lasts 13 days >300 mcm/d of supply Freezing temperatures through much of Europe IUK exporting ~ 40 mcm/d Norwegian Flows rerouted ~ 10 mcm/d UK storage depletion No price signal to hold back UK storage 19

20 January & February Flow (mcmm/d) Russia / Ukraine IUK shifts to exports No material increase in UK gas price UK storage significantly depleted UK gas prices subsequently lower, modest IUK exports Gas Price (p/therm) Jan Jan Jan Jan Feb Feb-09 0 NSS - IUK Storage IUK Storage Inj. NBP day ahead Euro Contract 20

21 2009/10 - Norwegian Outages December Feb 1 in 5 Cold UK Temps 3ºC.. Norwegian outages (1 st 11 th January) Troll/Kollsnes (~140 mcm/d) Ormen Lange (~ 70 mcm/d) Kårstø (~90 mcm/d) Overall loss ~300 mcm over 5 days Significantly higher LNG 43 mcm/d Additional IUK, importing ~ 10 mcm/d 21

22 Norway: Last Winter mcm drop Jan 03-Jan 05-Jan 07-Jan 09-Jan 11-Jan 13-Jan 15-Jan 17-Jan 19-Jan mcm/d 250 mcm loss over 4 days Little impact on continental flows Germany Holland France Belgium UK 22

23 January & July Flow (mcmm/d) IUK imports despite UK price below Euro contract Relatively low UK gas price throughout high demand period Summer gas prices higher than winter! Storage replenished with higher priced gas! Gas Price (p/therm) Jan Jan Jan Jan Jul Jul Jul Jul-10 NSS - IUK Storage IUK Storage Inj. NBP day ahead Euro Contract 23

24 Forecasts Meeting energy targets Gone Green Or moving towards energy targets Slow progression

25 Energy Targets 2020 EU Targets 20% of EU energy from renewables UK target 15% Limited opportunity to change heat profile hence most of the target needs to be met by renewable power generation ~32% of UK power by renewables 20% reduction in emissions 20% improvement in energy efficiency Gone Green meets 2020 Slow Progression moves towards 2020 UK % reduction in emissions, 34% by 2020 Decarbonisation of heat 25

26 Future vision efficiency and electrification Electricity Heat Transport Simple efficiency measures across all sectors Appliance efficiency Insulate homes Efficient engines and integrated transport Decarbonised electricity fuels zero emission vehicles Decarbonised electricity Heat pump Mainly for new homes and decarbonise transport Decarbonise gas using biomethane Biomethane CNG 26

27 Demand view to ,200 1, History Forecast Little or no demand growth over next decade 27 Throughput (TWh) LDZ Firm LDZ Interruptible NTS Pow er NTS Industrial Irish Exports Gone Green

28 Approximate position for peak demand / supply / capacity mcm/d Demand Supply UK storage 28

29 Approximate position for peak demand / supply / capacity mcm/d Demand Supply UK storage 29

30 24/25 Storage /23 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19 20/21 Existing Under Construction Proposed 2008 Forecast 2009 Forecast 2010 Forecast Deliverability (mcm/d) 00/01 02/03

31 Supply forecasts (Slow Progression) 120 Actual Forecast 100 bcm / year /01 02/03 04/05 06/07 08/09 10/11 12/13 14/15 16/17 18/19 UKCS traditional Norway LNG Unconventionals Continent Gone Green