EDF TRADING A leader in the international wholesale energy market 13 th November 2013
Gas Storage Update in the UK This is a complex subject about which much has been published The role of gas storage in the UK will be discussed through explanation of the supply/demand balance, the wholesale gas market and different types of storage EDF Gas Storages in the UK Alternates to gas storage are there any? Many storage projects have been developed over the past number of years which will indicate the number the market has brought forward What prevents new projects reaching Financial close 2 EDF TRADING
European Gas Supply
Role Of Gas Storage Smoothing Distribution to Users. The UK gas grid is well developed and with the existing storages is able to smooth supply and demand spikes Storage as a Daily Flexibility Tool Quick Cycle Storage. EDF Storages are quick cycle designed to quickly provide gas to stabilise the grid and market. Characteristics are quick response high volume gas plants and smaller gas in store. Signals to operate stem flow from the market price. Storage to Hedge against Winter Summer Spread. Provided by long cycle storage typified by small capacity gas plants and very large gas in store as provided by large depleted oil or gas fields or Aquifers. The most famous in the UK is Centrica Rough Storage. Strategic Storage. Storage to provide gas in the event of major supply interruption to the country. Currently the UK does not have strategic storage other than that provided by existing long term storage. Storage Capacity. It is often quoted that the UK has a lower percentage of storage capacity to demand than other major EU countries. It should be noted that if expressed as a percentage of imported gas currently there is not a significant difference however as the north sea declines the ratios alter Continental European Storage Capacity may also export gas through interconnectors to the UK 4 EDF TRADING
Additional Storage Capacity UK Supply Alternates FID expectation for UK Storage Projects The UK Government has investigated and consulted widely to discern whether security of supply strategic storage is required and whether intervention is required to ensure the whatever provision is required. It has been concluded that the UK has sufficient alternate sources of supply that gas will can be provided from a variety of sources including LNG regasification without additional strategic storage. Currently it seems that business case to support the required investments to build new storages do not exist in the market. Price spreads resulting from daily, weekly, monthly and annual volatility do not provide sufficient income. The last storage to receive FID is the EDF Energy Hill Top Storage Project Source of Map the National Grid 5 EDF TRADING
British Salt Brine Processing Plant Hill Top Farm s Gas Plant (HH3) Existing Hole House Gas Plant (HH1&2) Hill Top Cavities 6 National Grid Gas AGI
Total Demand Notice the Changing Volatility of Demand mcm/d 2010 2011 2012 2013 500 450 400 350 300 250 200 150 100 50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 7
Total Supply Supply ultimately follows demand and must respond to the market signals. LNG has supplied up to 120 mcm/d although generally much lower. Beach supply is usually around 85 mcm/d and is expected to decline. mcm/d 500 2010 2011 2012 2013 450 400 350 300 250 200 150 100 50 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep 8
Total Net Storage Withdrawal Storage withdrawal provides one source of gas to smooth volatility. It is possible to buy forward on the market to protect against price and demand spikes. mcm/d 2010 2011 2012 2013 120 100 80 60 40 20 0-20 -40-60 -80-100 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct 9
Existing Storage Facilities In Operation or under Construction excl LNG Depleted Field Hatfield Moors Salt Cavity Hornsea Aldbrough Stublach Rough Holford Hole House 1,2&3 Humbly Grove 10
Known Projects some now discontinued Depleted Field Hatfield West Salt Cavity Saltfleetby IslandMagee Whitehill Bains Aldbrough 2 Gateway Preesall Esmond Baird King Street Corvette Hewett Caythorpe Portland 11
Permitted Storage Projects FID soon? Depleted Field Hatfield Moors Salt Cavity Saltfleetby IslandMagee Hornsea Aldbrough King Street Stublach Rough Holford Hewett Hole House 1,2&3 Humbly Grove 12
Hole House Gas Plant 13
Well Head- 2 bore hole design 14
Large 10 MW Compressor 15
Hole House and Hill Top Gas Plants 16 EDF TRADING
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