cbi energy conference: malcom rice jones
TRANSCRIPT
1
What role for gas in a low carbon energy future?
CBI Energy Conference:
No time to lose: deciding Britain’s energy future
15th September 2010
Malcolm Rice-Jones
2
Is gas more than just a transitional fuel?
• Globally, 138 years of conventional reserves remaining(unconventional provides further upside)
• Nearly 80% of these reserves are within economic reach of Europe using proven delivery routes
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
Produced Reserves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
Global gas (tcm)
Proven
Ultimatelyrecoverable
Source: IEA World Outlook 2009
050
100150
200250
300350
400450
P r oduc ed R emai ni ng
R es er ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
Produced Reserves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
Global gas (tcm)
Proven
Ultimatelyrecoverable
Source: IEA World Outlook 2009
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
P r oduced R eser ves
0
20
40
60
80
100
120
140
Produced Reserves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
0
20
40
60
80
100
120
140
P r oduc ed R es er ves
Global gas (tcm)
Proven
Ultimatelyrecoverable
Source: IEA World Outlook 2009
050
100150
200250
300350
400450
P r oduc ed R emai ni ng
R es er ves
3
Is the UK gas system robust?
Source;Cedigaz
• UK has 15 days of storage compared to the EU27 average of 63• However the UK system has been robust enough to handle
- last year’s cold winter- disruption caused by Russia / Ukrainian dispute in 2009- Rough storage outage in 2006
Number of days of average demand that can be met by underground storage
0
50
100
150
200
250
Hu
ng
ary
Slo
va
kia
Au
str
ia
Cze
ch
Re
pu
blic
Fra
nc
e
Bu
lga
ria
Ge
rma
ny
De
nm
ark
Ro
ma
nia
Ita
ly
Po
lan
d
Ne
the
rla
nd
s
Sp
ain UK
Po
rtu
ga
l
Ire
lan
d
Be
lgiu
m
Sw
ed
en
Number of days of average demand that can be met by underground storage
0
50
100
150
200
250
Hu
ng
ary
Slo
va
kia
Au
str
ia
Cze
ch
Re
pu
blic
Fra
nc
e
Bu
lga
ria
Ge
rma
ny
De
nm
ark
Ro
ma
nia
Ita
ly
Po
lan
d
Ne
the
rla
nd
s
Sp
ain UK
Po
rtu
ga
l
Ire
lan
d
Be
lgiu
m
Sw
ed
en
4
UK gas system security
Supply 2010/11 Annual Peak day bcm/yr mmcmpd
Continental pipelines 45 123Norwegian pipelines 47 129LNG regas 57 156Indigenous production 52 142Storage (90 day) na 51
201 602Demand 87 518Source; NGC
• Even without indigenous production there is more than enough import capacity to meet annual average demand– Need an efficient market to
send clear price signals
• Peak capacity is tighter but new storage schemes are likely to compensate for declining indigenous production
5
Renewable power intermittency – how can this be managed?
British market in January 2030 with 2000 weather (from Poyry*)
*How wind variability could change the shape of the British and Irish Electricity Markets; Poyry July 2009
• 40GW of wind capacity requires 40GW of back up plant - (~50% of all installed capacity)
• Gas fired plant with relatively low capex is ideally suited to provide this mid merit support
6
Conclusions for gas in the UK
• Available
• Affordable
• Sustainable
• Reliable