UK gas and electricity supplies. A review of the winter John Greasley and Simon Griew Commercial. UK Transmission

Transcription

1 UK gas and electricity supplies A review of the winter John Greasley and Simon Griew Commercial UK Transmission

2 Agenda What were we saying before the winter? What happened in electricity? What are the interactions between gas and electricity? What happened in gas? What issues does this raise looking forward?

3 What did the 2003/04 winter operations report say? (October 2003) Transportation requirements of cold winters can be met Sufficient gas forecast to be available at the beach Some mothballed plant has returned We are progressing changes to market rules Gas/electricity interactions CCGT interruptions Proposals developed to mitigate impact of this Worst case scenarios only realised if exceptional circumstances arise

4 Electricity Plant Margin Since Outturn July 03 90/91 91/92 92/93 93/94 94/95 95/96 96/97 97/98 98/99 99/00 00/01 01/02 02/03 03/04

5 Market Signals Seven Year Statement Plant Margin 2003/04 SYS margin varied through the year Actual margin outturned at 21.6% 20.0% 19.0% 18.0% 18.7% SYS Plant Margin % 17.0% 16.0% 16.2% 16.4% 15.0% Jan Mar July Oct

6 Market Signals Operational Margins Weekly and daily margins large negative surpluses seen in the approach to winter Situation improved as more plant became available Based on information provided by the generators

7 Key uncertainties going into winter. Potential Upsides: Further plant returning to service Other initiatives to gain access to generation Interconnector flows Potential Downsides Interconnector flows Generator performance Further mothballing / unavailability? Gas interruptions? Weather

8 Generation availability The following mothballed plant returned Dinorwig 3 Grain 1 Dinorwig 2 288MW 650MW 288MW Ffestiniog 3 90MW Deeside 250MW Fifoots 13 & 14 Killingholme PG Grain 4 242MW 560MW 650MW Plant Availability increased by ~3GW

9 Interconnector positions at Demand Peak Interconnector FPN Daily Peak Demand December 2003 French Avg 1890MW MW Scottish Avg 1123MW Dec 30-Dec 29-Dec 28-Dec 27-Dec 26-Dec 25-Dec 24-Dec 23-Dec 22-Dec 21-Dec 20-Dec 19-Dec 18-Dec 17-Dec 16-Dec 15-Dec 14-Dec 13-Dec 12-Dec 11-Dec 10-Dec 9-Dec 8-Dec 7-Dec 6-Dec 5-Dec 4-Dec 3-Dec 2-Dec 1-Dec Average 3013MW import from Interconnectors

10 French Interconnector Half-Hourly Flow, MW :00 02:00 04:00 06:00 08:00 10:00 12:00 14:00 16:00 18:00 20:00 22:00 Period Start Time Typical Profile High Swing (12/11) High Imports (13/1) Export over Peak (27/2)

11 Other factors New service introduced to gain access to additional emergency generation (~700 MW - Maxgen) Additional reserve contracted by NGT Generator performance was typical No further withdrawals of plant prior to winter No significant gas interruptions

12 Winter Demands Temperature Profile - Normal & ACS Degrees Celsius , , , , , , , , , , Demand (MW) /10/ /10/ /11/ /11/ /11/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /01/2004 Average Weekly ACS Temperature Average Weekly ACS Demand 27/01/2004 Date Average Weekly Normal Temperature 02/02/ /02/ /02/ /02/ /02/ /03/ /03/ /03/ /03/ /03/ , , ,500.00

13 Winter Demands Average Weekly ACS Demand Degrees Celsius , , , , , , , , , , Demand (MW) /10/ /10/ /11/ /11/ /11/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /01/2004 Average Weekly ACS Temperature Average Weekly ACS Demand 27/01/2004 Date Average Weekly Normal Temperature 02/02/ /02/ /02/ /02/ /02/ /03/ /03/ /03/ /03/ /03/ , , ,500.00

14 Winter Demands Actual Temperature Profile Degrees Celsius , , , , , , , , , , Demand (MW) /10/ /10/ /11/ /11/ /11/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /01/2004 Average Weekly ACS Temperature Actual Effective Temperature Date 27/01/ /02/ /02/ /02/ /02/ /02/ /03/ /03/ /03/ /03/2004 Average Weekly Normal Temperature Average Weekly ACS Demand 23/03/ , , ,500.00

15 Winter Demands Actual Metered Demand Degrees Celsius , , , , , , , , , , Demand (MW) /10/ /10/ /11/ /11/ /11/ /11/ /11/ /12/ /12/ /12/ /01/ /01/ /01/ /01/2004 Average Weekly ACS Temperature Average Weekly ACS Demand Date 27/01/ /02/ /02/ /02/ /02/ /02/ /03/ /03/ /03/ /03/2004 Average Weekly Normal Temperature Actual Metered Demand 23/03/ , , ,500.00

16 Winter Demands Temperature Profile Degrees Celsius , , , , , , , , , , , , Demand (MW) /10/ /10/ /11/ /11/ /11/ /11/ /11/2003 Date Average Weekly ACS Temperature Actual Effective Temperature Actual Metered Demand 04/12/ /12/ /12/ /01/ /01/ /01/ /01/ /01/ /02/ /02/ /02/ /02/ /02/ /03/ /03/ /03/ /03/ /03/2004 Average Weekly Normal Temperature Average Weekly ACS Demand 44,500.00

17 Impact of weather on demand DP DULL Day DULL Day A 2B 3B Demand MW BRIGHT Day BRIGHT Day

18 Gas/electricity interactions Plant mix 2003/04 Nuclear Interconnector CCGT Coal Pumped Storage Oil Other

19 Gas/electricity interactions (all figures approximate) GB gas-fired power stations 24 GW output capacity 7 GW have alternative fuel capability 4 GW have back-up gas connection Interruptible arrangements 9 GW on some form of interruptible contract Majority have back-up fuel capability typical distillate capacity around one week Potential for firm CCGTs to arbitrage Spark spread key measure in determining commercial behaviour

20 Overview of 2003/04 in gas Another mild winter: 1 in 7 warm 9 out of the 10 mildest winters since 1928 have occurred in the last 20 years (and 7 of these in the last 10 years) Highest demand day was 28 January 444 mcm compared with 450 mcm in 2002/03 Roughly 90% of diversified firm peak demand Unexpectedly low deliveries of beach gas Corresponding increase in Interconnector imports Well-publicised offshore outages Jittery market sentiment System average price exceeded 50p/therm on 29 January Some evidence of demand-side response in CCGT sector

21 Beach deliveries Comparison of 2002/03 and 2003/04 Beach deliveries consistently lower in 2003/04 than in 2002/ Beach Supply (mcm/d) Demand (mcm/d) 2002/3 Beach 2003/4 Beach Linear (2002/3 Beach) Linear (2003/4 Beach)

22 Beach and Interconnector deliveries Comparison of 2002/03 and 2003/04 Interconnector filled the gap, but extent of commercial v physical drivers unclear Supply (mcm/d) Demand (mcm/d) 2002/3 Beach & IC 2003/4 Beach & IC Linear (2002/3 Beach & IC) Linear (2003/4 Beach & IC)

23 Daily beach gas deliveries against price Little apparent response to price above 30p/therm Beach (mcm) SAP (p/therm)

24 Beach performance against maximum forecast Highest beach deliveries well below maximum beach forecast.. 12-Mar-2004 Terminal max Sub-terminal max 2003 Forecast Bacton excl. IC Barrow Easington St. Fergus Teesside Theddlethorpe Point of Ayr Total Beach NB (Excluded from above) Interconnector has flowed up to 29 mcm/d compared with forecast of 22 mcm/d

25 Interruption and firm demand-side management Evidence of CCGT response, particularly on 29 Jan System Average Price in gas market was 51p/therm Spark spread fell close to zero Estimated reduction in CCGT gas demand of around 125 GWh Represents around 3% of total system demand ¾ from interruptible CCGTs, replaced by coal and French imports ¼ from firm CCGTs switching to distillate back-up Total response less than total forecast interruptible CCGT demand Low levels of LDZ interruption Highest level of shipper-initiated interruption around 24 GWh (28/29 Jan) Consistent with move by customers to Transco-only interruptible contracts Highest level of NGT-initiated interruption around 15 GWh (28 Jan) No clear evidence of customer-led response in LDZs

26 Issues raised by 2003/04 experience Is mothballing/de-mothballing to become the norm? Nearly 1.5 GW of plant has mothballed since the winter How do we give market participants appropriate signals and incentives to procure sufficient generation capacity and gas supplies? What beach performance can we expect in the coming winters? Which of the importation and storage projects under development will deliver (and when)? Are we taking appropriate account of climate change in our demand forecasts? What level of gas demand-side response can be expected? From CCGTs? From the non-power sector? Looking further ahead, should new CCGTs be required to have an alternative fue capability?