Markets

Energy shortages and rolling blackouts could become a real possibility in the UK in five years' time, warns Pilgrim Beart, founder of AlertMe. "A large fraction of our coal power stations are scheduled to be decommissioned in 2016. If you reduce supply without reducing demand then you get rolling blackouts," he told Gas-to-Power Journal.

Weakness in UK power markets is forecast to continue until 2013 as significant oversupply of power generation capacity is cutting into profit margins of gas and coal-fired plans, JP Morgan Cazenove (JPMC) said today in a research report. "UK power demand is worse than anaemic," JCMC analyst, Edmund Reid, said with reference to a drop in electricity demand below 2009 levels.

Societe Generale forecasts Europe's electricity demand in 2012 will see a mere 0.7% rise in annual demand as economic growth remains lacklustre. "Consumption should recover in 2012, but overall growth will likely to be modest," the bank said in its latest Energy Pulse report.

North American Electric Reliability Corporation (NERC) has alerted the U.S. energy industry of a growing reliance on natural gas as the primary fuel source at times of peak electricity demand. "The growing dependence on natural gas as a primary fuel source of on-peak capacity must be considered in planning, and operational measures must be in place to minimize interdependency risks," NERC told Gas-to-Power Journal.

The European Energy Exchange (EEX) will start OTC clearing for UK gas futures on 29 February, the bourse said Wednesday. Trading participants that are already admitted on the EEX Derivatives Market for natural gas can use the new service once they have registered for it at ECC, the clearing house of EEX.

Declining demand for Spanish gas-fired generation combined with unusually warm weather conditions this winter has led to an 8.7% drop in LNG imports to Europe in the second half of 2011, according to Deutsche Bank. Gas demand growth in Spain is forecast to remain sluggish as utilities are likely to favour coal over gas due to Spain's domestic coal subsidy scheme that will remain in place until 2014, analysts led by Mark Lewis in Deutsche Bank's latest European gas report.

China's State Electricity Regulatory Commission (SERC) has forecast an 8.5% drop in power consumption in 2012 on the back a slow-down in China's economic growth. Compared with the 11.7% surge in electricity demand to 4.7 trillion kilowatts hours in 2011, this development marks a significant decline in China's energy hunger.

Power cut hit Turkey's north-western region including the city of Istanbul over the weekend, following a system failure in a gas-fired power plant in the city of Bursa.

The link to Trayport's 'Global Vision (GV) Screen' as a trading interface has helped to boost the liquidity at the European Energy Exchange (EEX). "At the EEX, future trades are effectuated via Eurex and spot trades via Comserv, but trades can also be made directly via the GV Screen interface. This helped to boost liquidity together with other steps undertaken in 2011 such as extended Cross-Margining in the clearing process," EEX marketing representative, Eileen Hieke, told Gas-to-Power Journal today.

Power trading in 2011 was the "mainstay of revenue" for the European Energy Exchange (EEX Group), the bourse said today when publishing a review of its business. The bourse said it observed "a shift in trading activities towards shorter terms" in the fields of power and natural gas.

Tokyo Electric Power (Tepco) today announced forecast of a fresh record volume of natural gas consumed for power generation as it aims to close the gap in nuclear power supply following the shutdown of its Fukushima Daiichi plant following an earthquake last March. For the financial year ending March 31, Tepco forecasts gas use will rise to a record of 22.67 million tonnes of liquefied natural gas (LNG), increasing an earlier estimate issued in November of 22.6 million tonnes.

Deutsche Bank today slashed its price projections of the German baseload power price for 2012 and 2013 on the back of an expected drop in demand of electricity, natural gas and carbon emission allowances in Europe in the prolonged recession.

Investments in carbon capture storage (CCS) for new-built and operational power plants has a softening effect on carbon prices - albeit not a big one, Energy Brainpool's chief analyst Tobias Federico estimates.

"The scale of the price effect largely depends on how widespread the implementation of CCS technology will be implemented in the power generation sector," he told Gas-to-Power Journal in an interview.

BDEW, Germany's energy and water association, today released data on the country's power generation mix. Gas-fired generation was virtually unchanged at 14% in 2011. The share of renewable energies in the country's overall power generation mix surged by 20% in 2011, according to BDEW statistics. In 2011, renewable energies have already overtaken nuclear plants (18%) and coal-fired power generation (19%) in terms of market share.

Societe Generale is anticipating that 2011 will be far worse than 2009 for gas demand. The year 2011 has so far seen a 9.3% yoy drop in gas consumption and a 1.9% decline in electricity demand, Societe Generale said in its latest SG Energy Pulse report.