UK Gas For Electricity Generation Increased Only 1.5% Despite Low Prices

While Royal Dutch Shell reported strong results in the first quarter of the year, with a 2% year-on-year decline, the British government released its latest energy statistics suggesting that coal remained above gas for power generation in recent months. 

UK GAS IN 2014

Provisional data point at an increase in gas exports (+16.8%) and a decrease in gas imports (-10.8%) in 2014 with respect to the previous year. Despite the lower wholesale gas prices, though, gas used for electricity generation increased only by 1.5%. 

All in all, 2014 gas demand fell by 9.2% versus 2013. That was mainly due to a warmer year. 

‘LNG imports were 20.7 per cent higher, whereas pipeline imports were 19.2 per cent lower in 2014 versus 2013. The trade position for 2014 showed net imports to be 18.0 per cent lower in 2014 versus 2013’ reads the attachment about gas. 

Speaking about the period December 2014 to February 2015, the British government noted that, in electricity generation, coal was by far the main source. 

‘Coal provided 34.7% of electricity generation by Major Power Producers, with gas at 25.1% and nuclear at 20.9%’ reads a note released by the British government on Thursday, adding that the low carbon share of electricity generation by Major Producers was up 3.3% to 40.2%. 

The UK government showed an increased politicisation of energy issues over the last days and weeks, saying it would opposed a bid for BP and showing strong ties with the oil and gas industry. 

ROYAL DUTCH SHELL 

Meanwhile, Royal Dutch Shell published its first quarter results, with strong downstream CCS earnings almost compensating for a 88% plunge in the upstream segment to $675 million.

‘In Upstream, earnings were impacted by the significant decline in oil and gas prices and lower trading contributions’ Shell wrote.  

In his speech, Shell’s CEO Ben van Beurden confirmed the company’s focus on gas.

“The combination with BG would accelerate Shell's growth strategy in deep water and LNG, and create a springboard for further optimisation of our asset base, particularly when evaluating the longer-term portfolio.”