Trade Resources Industry Views UK Gas-for-Power Demand Nears 11-Month High on Low Renewables

UK Gas-for-Power Demand Nears 11-Month High on Low Renewables

The amount of natural gas used by UK power stations to generate electricity neared an 11-month high Monday as unfavorable weather conditions for renewable generation technologies led to higher gas-fired generation, figures from the National Grid showed Tuesday.

UK gas-for-power demand rose to 63.3 million cu m Monday, the highest daily figure since January 21 and well above the December 1-13 average of 40 million cu m/d, Grid data showed.

Calm and cloudy conditions over the UK at the beginning of week 51 led to falls in both wind-power and solar-power generation Monday, leading to an increased need for gas-fired generation to cover the renewable output loss.

Gas-for-power demand is expected to fall back towards the monthly average with nominations for Tuesday's gas day at 43.9 million cu m at 1100 GMT, according to Eclipse Energy, an analytics unit of Platts.


Gas-for-power demand so far in 2015 has been 8.8% lower in comparison to 2014 levels, despite gas overtaking coal as the dominant fuel in the UK generation mix this year in reaction to an increase in the UK Carbon Price Support from GBP9.55/mt to GBP18.08/mt April 1, making gas more competitive against coal as a generation fuel.

For the January 1-December 14 period this year, gas-for-power demand has totaled 13.219 Bcm in comparison to the 14.504 Bcm for the same period in 2014, as higher renewable output in the form of wind power and solar power has limited gas-fired generation demand despite coal-fired plant closures and weaker NBP gas pricing.

Moreover, year-to-date gas-for-power demand is at its lowest levels since at least 2011, despite coal being the dominant fuel for the past few years due to a collapse in global coal pricing, lower than 13.408 Bcm in 2013 and well below 19.260 Bcm in 2011 -- the last year when gas was the dominant fuel.

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Topics: Metallurgy