View
463
Download
2
Category
Tags:
Preview:
DESCRIPTION
Phil Hare, managing director, Poyry Energy Consulting at the CBI's energy conference. London, September 2010.
Citation preview
Energy Market Trends
CBI Energy Conference 2010 London
Phil HareManaging Director
15th September 2010
CBI 15th September 20102
Source: Heren
Once upon a time…gas prices were “volatile”
0
10
20
30
40
50
60
70
80
90
100
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
GB
NB
P (
200
8 p
/th
erm
)
High continental prices pull up UK prices
Mild winter and oversupply causes low summer prices
Sharply rising gas prices driven by oil prices
Oil prices drive up the price of gas
Extremely mild winter causes oversupply and price crash
Rough storage failure and cold weather causing extremely high prices
CBI 15th September 20103
….....and coal prices were “stable”
Source: Reuters, McCloskey, ARA CIF basis 6000kcal/kg
0
20
40
60
80
100
120
140
160
180
200
220
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
NW
E c
oal
mar
ker
pri
ce (
2008
$/t
on
ne)
CBI 15th September 20104
…. and what of the future for commodity prices?
• What is a good long run price for oil?
• There is a lot of gas… in a global market
• Is there an acceptable (high) price for carbon? What if the electricity market decouples?
• Renewables and nuclear plant have low short run costs…
Increasingly not just a question of “must go up” – but “if” and “when”
CBI 15th September 20105
Even more change “planned”
0
100
200
300
400
500
600
700
1990 2008 2020 2050
MtC
O2
Projections
Services
Residential
Transport
Hydrogen
Electricity
Upstream andnon-sector
Industry
Agriculture
Sources: DECC, Committee on Climate Change
CBI 15th September 20106
Generation plant dispatch in a low carbon future
0
10
20
30
40
50
60
70
01-Jan 04-Jan 07-Jan 10-Jan 13-Jan 16-Jan 19-Jan 22-Jan 25-Jan 28-Jan 31-Jan
Gen
erat
ion
(GW
)
Nuclear Biomass Coal CHP CCGT Other renewables Demand Peaking plants Imports
0
10
20
30
40
50
60
70
01-Jan 04-Jan 07-Jan 10-Jan 13-Jan 16-Jan 19-Jan 22-Jan 25-Jan 28-Jan 31-Jan
Gen
erat
ion
(GW
)
Nuclear Biomass CCSCoal Coal CHPCCGT Other renewables Demand Peaking plants Imports
2010
2030
CBI 15th September 20107
Gas is in the party
GB – daily demand with weather of 2003
0
50
100
150
200
250
300
350
400
450
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
0
50
100
150
200
250
300
350
400
450
Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep
Non power generationPower generation
Dem
and
(m
cm/d
ay) 2009
2029
CBI 15th September 20108
Market price volatility and stretch will greatly increase
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Weather year:
-50
-10
30
70
110
150
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
£/M
Wh
(rea
l 200
8 m
oney
)
0
500
1,000
1,500
2,000
2,500
3,000
0.0% 0.5% 1.0%
£/M
Wh
(rea
l 200
8 m
oney
)
Prices spike at £7700/MWh
2010
CBI 15th September 20109
Demand Side Management Value likely to grow?
• Inevitable response from demand response….
• ….but need to develop quantitative analysis of potential
• Analysis needs to include volumes, behaviours, timeframes and technologies
• This will not be ‘load management’ as we know it..
CBI 15th September 201010
Some early answers on demand…
Example for 2030 with electrification of heat and transport (Jan 2000 weather)
0
20
40
60
80
24-Jan 25-Jan 26-Jan 27-Jan 28-Jan 29-Jan 30-Jan
Win
d ou
tput
(G
W)
Quantity loadmanagement
Centralised active load management
0
20
40
60
80
24-Jan 25-Jan 26-Jan 27-Jan 28-Jan 29-Jan 30-Jan 31-Jan
De
ma
nd
, GW
Flexible EV
Flexibleappliances
Flexible heat
Inflexible
CBI 15th September 201011
In conclusion…
• Wider views of the future than ever before
• Too simple to say that energy prices will go up
• UK even less of an island
• Moving to a low carbon future likely to be even more
Pöyry Energy ConsultingKing Charles HousePark End StreetOxford, UKOX1 1JD
+44 (0)1865 722660www.poyry.comwww.ilexenergy.com
Phil HareManaging Director
phil.hare@poyry.com
+44 (0) 7770 828644
Pöyry Energy (Oxford) Ltd. Registered in England No. 2573801. King Charles House, Park End Street, Oxford OX1 1JD.
Recommended