UK Gas Demand Rises on Weather
UK gas demand was up by 2.4% last year to 71.8bn m³ but still below the average levels in recent years and the rise was mostly to do with slightly lower temperatures, the government's Department of Energy & Climate Change reported March 31. Industrial gas use was down. Industry group Eurogas reported a year on year rise of 0.4%, but had the same figure of 71.8bn m³.
Gas demand for power generation was down by 3.5%. However excluding power and heat generation, final gas consumption was up by 4.7%, driven in the main by increased residential demand and also demand for heating by other final users, including commercial premises. However the fourth quarter saw coal cede ground as the carbon floor price lifted the overall cost of burning coal above that of using gas.
Gross UK gas production in Q4 2015 was 12.8% higher year-on-year. For the whole of 2015 it was up 7.8%, due to fewer field outages than in 2014.
Imports for the whole of 2015 were up 2.6%, though it is notable that LNG volumes increased by a fifth to 11.8bn m³, at the expense of pipeline imports of 32.7bn m³. Indeed in the final quarter of last year, LNG imports increased year-on-year by 52.5% to 3.8bn m³.
The spot LNG price was lower last year as the oil price crash of mid-2014 fed through into the LNG market some months later.
In the final quarter exports were up by 72% compared to 4Q 2015, driven by strong production and relatively muted demand. Notable in 2015 were the first LNG re-exports from Britain, although most gas continued to be exported through the pipeline network, with over half going to Belgium, DECC said.
The UK produced 9.5% more energy last year than in 2014, ending a 16-year series of annual declines thanks to more oil, gas, bioenergy and primary electricity. Net import dependency fell back from 46.2% to 38.6%. Coal stocks fell as what was used in power generation was not fully replaced.
Of electricity generated in 2015, gas accounted for 29.5%, down from 29.8% in 2014; and coal 23%, a fall of 7 percentage points on 2014 to a record low generation of 76.3 TWh as a result of the ongoing reduction in capacity. In the last quarter it fell to 17.6 TWh, down by 37% from Q4 2014, while the share of generation from gas rose from 29.1% to 29.7%. Nuclear’s share increased by 2 percentage points on 2014 to 21%. The share of generation from renewables (hydro, wind and bioenergy) increased from 19.1% in 2014 to a record 24.7% in 2015 following the building of capacity.
UK greenhouse gas emissions fell by 3% in 2015 year-on-year, thanks to that decline in coal-fired power generation. Not including that latest decline, DECC also noted that 2014 was the UK's 2nd highest emissions reduction during a year of GDP growth, the largest having been in 2011.
William Powell