Gas Provides Half of UK Power

Gas accounted for just over half of UK power production in 2Q 2016, as coal fell to a record low share, according to latest national statistics released by the government's new Department for Business, Energy and Industrial Strategy on August 25.

Gas provided 50.9% of 2Q electricity generation by major power producers, with nuclear at 24.2%, renewables 18.1% and coal only 6.8%. 

Electricity generation by the same producers was down 0.9% year on year, which meant their coal use fell by 71%, whereas their gas use rose by 52% – with gas use by generators in April 2016 the highest of any month since October 2011. This was due to reduced coal-fired capacity, with coal use in May 2016 its lowest of any month in the past 21 years, as more plants were definitively closed or switched to biomass-burning. It was also helped by cheap gas, currently available on the UK spot market at just under $4/mn Btu for prompt supplies. And uniquely in Europe, the UK has set a carbon price floor, which improves the economics of gas over coal burn.

RWE's 2-GW Pembroke gas-fired power plant in Wales. Such UK CCGTs were kept busy in second quarter 2016 (Credit: RWE)

Overall UK primary energy consumption in 2Q 2016 fell by 0.3% year on year, with indigenous natural gas production down by 3.2%.

Whereas UK 1Q 2016 gas production increased by 5%, owing to first flows from the Total-operated Laggan-Tormore field west of the Shetland Isles in February 2015, the 2Q 2016 figure (down 3.2%) is in comparison with the first full quarter of production from that field.

Overall UK gas demand in April-June 2016 was 20% higher than in 2Q 2015 – with a notable increase in April of one-third – largely thanks to the power sector. Gross gas imports into the UK in 2Q were up by 21%, while gross exports were down by 28% (those to the Republic of Ireland falling by half, thanks to the start-up of its Corrib gasfield). Norway supplied 63% of the UK's 2Q gross gas imports, while LNG provided 32%.

Net gas imports were 56.5% higher in 2Q at 7.7m³.

Mark Smedley