Gas alert as demand and prices rise

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emordnilap
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Post by emordnilap »

RenewableCandy wrote:Yesterday we lit the wood-burner for the first time this season.
Despite damp weather recently, I haven't felt the need for space heating yet. The outside thermometer's been reading day temperatures from 15 to 19 this week, so presumably the inside of the house isn't that much warmer.

Being the skinflint I am, I hate heating the house before October. :lol:
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clv101
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Post by clv101 »

Our outside temperature hit minimum of 8C a couple of nights ago. Inside temperature in the morning was 18C, about 1 degree less than the evening before. No heating. Benefits of insulation.
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adam2
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Post by adam2 »

mikepepler wrote:The spot market price yesterday (30 Aug) was 2.422p/kWh. I've kept track over time, and this is the highest price I've got on record for the time of year. Here's a comparison to past ones for 30 Aug:

2018: 2.4220 p/kWh
2017: 1.5716 p/kWh
2016: 0.9087 p/kWh
2015: 1.3177 p/kWh
2014: 1.5800 p/kWh
2013: 2.1807 p/kWh
2012: 1.9674 p/kWh
2011: 2.0832 p/kWh
2010: 1.5219 p/kWh
2009: 0.6312 p/kWh

This time last year Rough had closed to new gas, but was still available to deliver the remaining cushion gas to the system. I assume it will be doing this again this winter, but perhaps the output will be lower?
So not only a new all time record for that date, but exceeding the previous record by a significant margin.
Prices have of course been higher at other times of the year, but these have generally been short term peaks driven by high demand.

The above quoted price looks to me like a sustained increase, it has since gone higher still.

I expect more retail price increases in both gas and electricity.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
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adam2
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Post by adam2 »

It is now about three weeks since wholesale natural gas reached 2.4 pence a Kwh.
Since then it has remained at about the same figure, this would appear to be a new record for a sustained price as distinct from brief spikes.

If these prices DO become the new normal, then this will have a significant effect on the economics of renewable energy.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
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adam2
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Post by adam2 »

Prices remain above 2.4 pence a Kwh, sometimes well above.
Stocks have declined significantly and are now down to 18,400 GWh.

This is not a problem whilst LNG cargoes continue to arrive regularly, but any interruption to these imports could have serious consequences in only a few weeks.
The increased price will somewhat reduce demand, but not perhaps by that much.
Domestic demand is not that elastic.
Industrial demand can be reduced by exporting manufacturing jobs to countries with cheaper fuel.
Gas burnt for electric power production can be slightly reduced in the near term by increasing coal burnt, however coal burning capacity is limited.

And it is not winter yet.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
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adam2
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Post by adam2 »

Wholesale natural gas prices have now fallen significantly.
They did however remain at historically high prices for over a month, I suspect that the price was a new record high for a sustained price as distinct from brief spikes.

Natural gas storage is also well filed, at about 27,000 Gwh.

Before any undue optimism breaks out we should remember that the price though reduced if compared to a month ago is still a lot higher than the average for recent years.

The storage figure is very low if compared to the good old days.

At an average winter drawdown rate we have enough to last about four weeks until empty, or about two weeks until it is time to consider a panic.

At an extreme winter drawdown rate we have enough for two weeks until empty, or one week until panic time.

We are therefore very vulnerable to any interruption to imports.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
kenneal - lagger
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Post by kenneal - lagger »

You've just given the government all the information it needs to recommend that we should frack for gas in the UK in the interests of energy security, Adam.
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vtsnowedin
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Post by vtsnowedin »

I expect that every gas bearing rock formation in the world will eventually be drilled and fracked. The NIMBY attitude of some of the posters here may well push back the start date of fracking in the UK but won't stop it when energy supplies get tight. The one thing delay might accomplish is to let the technology continue to advance to methods both safer and more efficient then current practice.
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Post by fuzzy »

Pretty much. The UK has vast coal gas gas reserves in the North Sea which can be extracted by controlled burning. This is inevitable in the long run [contrary to the the politicians BS].
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Post by kenneal - lagger »

In that case if you own any property within 10 metres of sea level sell it while it still has any value. And if you own anything within say 100 metres of a cliff top, unless the cliff is granite or similar hard rock, sell that as well because sea level rise and the associated increased erosion could well do for it sometime this century.
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adam2
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Post by adam2 »

kenneal - lagger wrote:You've just given the government all the information it needs to recommend that we should frack for gas in the UK in the interests of energy security, Adam.
True, regrettably, though I suspect they already know without reading my post.

A more sensible response would be to increase use of renewables and thereby use less gas, our otherwise inadequate gas storage would last longer if consumption was reduced.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
vtsnowedin
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Post by vtsnowedin »

I expect that rising prices for fossil fuels, as apposed to government mandates or central planning, will drive the increased use of renewables and conservation by improved efficiency to the limits that physics and nature place on them. We will fully explore what we can get from them and then learn to live without any measure they can't provide. During the transition which will probably take a decade or more the portion of energy provided by fossil fuels will steadily decline ( probably not evenly but long term inevitably) making more and more effort at renewables profitable.It will be a tough decade for the technological West but perhaps fatal for the third world population if only because the West will not have any excess fossil fuel produced food to ship to them even if the money and charity is there to pay for it.
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adam2
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Post by adam2 »

Natural gas back over 2.4p a Kwh.

It remains to be seen if this will be sustained or a brief spike.
Last time prices reached this level, it was sustained for over a month.
And whilst prices then moderated, they remained well above the historical average.

A sustained gas price of around 2.5p Kwh suggests that electricity from CCGT plant will cost about 7p/Kwh for fuel alone, with wages, maintenance, depreciation, taxes, and profit being in addition.

Even new nuclear starts to look affordable then, and new wind a bargain.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
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BritDownUnder
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Post by BritDownUnder »

I have noticed that the amount of coal generation creeping up in recent weeks. Whether a response to natural gas price or for some strategic reason who knows. There do seem to be a lot of nuclear outages at the moment too.

I doubt that much more gas generation gets built in the UK unless a real lunatic takes charge.
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adam2
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Post by adam2 »

Indeed, a lot more coal being burnt at present, over 7GW earlier today, the highest this season.
I doubt that there is any strategic reason for this, simply economics I presume due to the high price of gas.

Our admittedly paltry gas storage is well filled, and whilst we are vulnerable to supply disruptions I am not aware of any particular concerns.

With gas stocks at about 26,500 Gwh we have enough for 26 days at the maximum likely withdrawal rate.
After two weeks of serious disruption to imports I would expect some discreet gas saving measures to start.
If supplies were not restored after three weeks I expect a state of emergency.
"Installers and owners of emergency diesels must assume that they will have to run for a week or more"
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