Essential UK energy information

I have just discovered the excellent site “Vital Trivia” by Chris Vernon who provides a succinct overview of the UK energy supply system, derived from the new DTI Energy Trends report and comes to these conclusions. Essential reading.

· Total energy production 7½ % lower than Q2 / 2004.

· Oil production fell by 10 % compared to Q2/2004 as production from older established fields continued to decline.

· Gas production fell by 5½ per cent compared Q2 / 2004. Gas imports increased by 53½ % while gas exports declined by 26½ per cent. The UK was a net exporter of gas in the Q2 / 2004, albeit 74½ per cent lower than in 2004. UK gas demand was 2 per cent higher than a year earlier.

· Coal production declined by 20 % year on year (UK Coal lost £50Bn plus). Coal imports increased by 20 % - a new record level. Generators’ demand for coal was up 6½ per cent. (As the financiers sweat dirty old crumbling ancient power stations).

· Allowing for calendar differences, year on year , coal supplied ½ % more electricity, gas supplied 4½ % less. Nuclear supplied ½ % more. Net imports of electricity were 20 % higher than a year earlier.

He concludes

“Although this report does show supplies to be adequate it makes in my opinion some extremely optimistic assumptions about gas and electricity imports, relying on untested infrastructure and untested magnitudes and similarly optimistic assumptions on CCGT electricity generation substitution.”

Basically it's a back of an envelope calculation to see how the UK energy industry is falling headlong into energy importation and loss of energy security and with a tiny excess capacity - gone are the heady post war days when the fleets of coal fired stations were operating at 50-60% capacity.

He raises three main concerns in the outlook for the Winter of 2005 as a result of reading the Ofgem forecasts ;

· In Winter 2004, 331 million cubic metres per day gas was used in UK. Forecasts for “beached” gas have been lowered from 226 to 327 mcm/d and even this may be optimistic. There were record supply disruptions last year.

· The refurbished Isle of Grain LNG terminal, will import 13 mcm/d rising to 17 mcm/d (maximum capacity of the terminal) during the very coldest days. The terminal isn’t even operational yet and early shipments have been diverted to the the US. The US is also facing shortages and importers are dominating supplies from Africa and Middle East.

· The Intercontinental interconnector has a very finite capacity -It is assumed that 42 mcm/d will be available. In 2004 the capacity of the Interconnector was 25 mcm/d but despite acute gas shortage and extremely high prices in the UK the market responded by reducing imports.

To which can be added;

· Assuming continental weather is the same as UK, harsh conditions will not encourage EU suppliers to ship gas needed at home.

... and of course we need to pay for those imports. No more an energy island, we face the problems Japan faced many years ago.