The volatility of gas prices in Europe is forecast to rise as utilities in the U.K., Germany and Spain need more flexible gas supply for dispatching power plants at short notice to counterbalance the growing share of intermittent power supply from renewables.
"We envisage gas demand from the power sector to increase across most European countries, with Great Britain set to become a wind and gas dominated system by 2030, following the closure of most coal plants," James Cox, Principal Consultant at Pöyry told Gas to Power Journal.
Japan's ministry for economy, trade and industry (METI) will host an LNG conference in Tokyo on September 19 to evaluate the increasingly central role of gas supplies for power generation as the country considers a nuclear phase-out by 2030. METI is aiming to overhaul the current strict regionalization of Japan's main electric power utilities, which consume about 5 million tonnes per month of LNG for to fuel gas-fired power plants.
The rapid implementation of India's 'National Gas Grid for LNG', designed to accommodate rising gas supply from LNG import terminals on the western coast, will provide a fillip to gas-fired power generation. "The formation of the gas grid (12,000 km) in India is a great leap which is going to encourage the use of gas-based power generation over a wider geographical area," an analyst at India's Central Power Research Institute told Gas to Power Journal.
While European power prices are will stay flat over the coming days they are likely to increase in by the end of September on colder weather conditions, the Italian bank UniCredit forecast. Gas generation remained on low levels throughout Europe, while higher profit margins and subsequently higher utilisation of power generation have supported carbon prices in recent weeks, bank research shows.
The British government has proposed to set a cap "broadly equivalent to 1 GW" for new biomass-fired power plant capacity. Energy secretary Ed Davey said the cap will "ensure that the Renewables Obligation delivers value-for-money for the bill-payer while enabling shovel-ready projects to come forward."