Sunday, December 25, 2022

Saxo Bank: UK Will Scramble For Gas When Wind Isn’t Blowing (TROPE)
ITS NOT LACK OF WIND OR CLOUDS, ITS LACK OF BATTERY STORAGE FOR ENERGY, AND LACK OF STRATEGIC PLANNING

Editor OilPrice.com
Sat, December 24, 2022 

The UK will be scrambling for highly expensive gas imports to meet its energy needs this winter to stave off blackouts whenever the wind doesn’t blow, warned a leading energy expert.

Ole Hansen, head of commodity strategy at Saxo Bank, told City A.M. that the intermittent performance of domestic renewable power is proving costly for the West.

He argued the country lacks a reliable alternative base load of power aside from highly expensive natural gas.

He said: “Europe and the UK are in short supply of base-load which can reduce the spikes seen in prices on days the wind does not blow. Not least in the UK, where the power generation from renewables has been so volatile that the change from high production to low has been the equivalent of turning on and off 15 nuclear power plants, each producing 1GW.

“Going forward, it highlights the risk of very expensive power days when the wind doesn’t blow and where supply has to be made up from gas as nuclear input is lower than normal.”

Wind power has consistently made up a significant minority of the UK’s energy mix, and is currently generating 45 percent of the UK’s power.

However, in recent weeks, this dropped to below eight percent, when National Grid called for the UK’s three standby coal power units to warm up earlier this month, before terminating the request when demand eased.

The UK has instead relied on vast inflows of liquefied natural gas from overseas vendors such as the US and Qatar to meet both its energy needs and demand on the continent.
Gas not the only issue in supply scramble

National Grid also came close last month to announcing emergency measures such as arranging volunteer households to cut off power at peak times to stave off supply shortages on the grid.

The organisation’s electricity system operator has predicted rolling blackouts in January only as a worst-case scenario in its winter outlook.

It expects to stave off supply shortages courtesy of supplies from overseas including power transmitted through the UK’s interconnectors into the continent.

However, there are increasing challenges in meeting demand with transfers from the continent, as the latest raft of nuclear power station closures in France reflects the volatility of the current energy market,

Plant outages caused by corrosion and scheduled maintenance have already severely dented France’s nuclear output this year.

Hansen argued the underperformance from France’s aging nuclear fleet has already been visible through “extreme volatility” in power prices across Europe over recent weeks.

Power prices have surged to near-record highs this year, and French state operator EDF is forecasting that annual output across its nuclear power plants will be below typical historic levels until 2024, as it grapples with maintaining its fleet.

By CityAM

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