A growing dependence on natural gas will see the US introduce 27 new storage sites by the end of 2016, states a new report by international energy analysts GlobalData. The report explains that as the US plans to generate up to 80% of its electricity through gas-fired plants by 2035, the working capacity of its underground storage network will increase from 4,650,122MMcf in 2011 to 4,970,022MMcf by 2016.

According to GlobalData’s 2011 figures, the US already has the largest number of active underground gas storage sites in the world, with 405. US production of natural gas has increased significantly over recent years due to the exploitation of shale plays, even leading to overproduction in 2011 and a resulting price drop.

The boost in production has prompted plans in the US to hugely improve natural gas pipeline infrastructure, which will in turn create demand for storage sites necessary in maintaining the reliability of the pipelines.

As natural gas cannot be utilized immediately upon production it must be stored underground for a period of time. The bulk of this is stored in depleted oil and gas field type sites (84.8% in 2011), but this is set to change as alternative salt cavern type sites become more prevalent due to the faster rate at which gas can be withdrawn.

This proliferation of natural gas storage sites during the period 2011-2016 will favour the salt cavern varieties, which will take a share of 70.4% of the total planned gas storage sites in North Americaduring this period. These more efficient locations will make up 19 of the 27 new storage sites expected by 2016.

The power sector is the one of the world’s biggest consumers of water, but one source – wind power – uses very little water to produce electricity. All fossil fuels and nuclear need significant quantities of water to pump crude oil out of the ground, remove pollutants from power plant exhausts, flush residues after fossil fuels are burned and cool power plants.

Coal uses up to 3.2 cubic metres of water per megawatt hour (MWh) of electricity produced, gas uses up to 1.7 m3 per MWh and nuclear around 2.7 m3 per MWh, but wind power uses only a fraction of these amounts.

In the US, the Department of Energy estimates that with a 20% share of wind power in the power system by 2030, as much as 15 trillion litres of water could be saved. That is the equivalent to the annual consumption of more than 9 million US citizens.

“Water scarcity is becoming a global challenge exacerbated by population growth and climate change. Wind energy is key to preserving our water resources and fighting climate change,” argues Remi Gruet, EWEA senior regulatory affairs advisor for environment and climate change. “Governments should therefore take a much more holistic approach to energy policy and promote investments in wind energy with ambitious targets for renewable energy.”
Global water demand is expected to outstrip supply by 2030 as world population grows and demand for power rises, according to the 2030 water resources group.

Eight Member States are being slow to take the necessary measures to complete the internal EU energy market by 2014. To achieve this, timely and complete transposition of EU legislation on the single market of gas and electricity into national law is crucial.

Opening energy markets for competition is key to competitiveness of the EU economy as a whole. An efficient, interconnected and transparent European internal energy market will also offer consumers a choice between different companies supplying gas and electricity and will make the market accessible to all suppliers.

The Electricity and Gas Directives of the Third Energy Package have to be transposed by the Member States by 3 March 2011. To date Bulgaria, Cyprus, Spain, Luxembourg, Netherlands, Romania and Slovakia have not informed the Commission of any transposition measures for the two Directives and Estonia has not done so as regards the Gas Directive.

Consequently, the Commission has sent 15 Reasoned Opinions to these 8 Member States to urge them to comply with their legal obligation. The Member States now have two months to respond. If they fail to comply the Commission may refer them to the Court of Justice of the European Union.

UK primary energy production fell by a record 14 per cent in 2011 to 136.3 million tonnes of oil equivalent, following sharp falls in output from the UK Continental Shelf as a result of maintenance activity and slowdowns. On an annual basis, petroleum was down by 17 per cent, with gas production down by 20 per cent.

Low carbon energy production grew – nuclear output was up 11 per cent, due to increased availability following a number of outages in 2010; wind output from major power producers was up by 59 per cent on additional capacity and higher wind speeds; with hydro up by 70 per cent following strong rainfall in Northern Scotland.

Gas accounted for 41 per cent of electricity supplied in 2011, with coal accounting for 32 per cent and nuclear 20 per cent. The share of generation by gas has fallen from 48% in 2010, with increases in the shares of generation for all other fuel sources.

Wind’s share of generation by major power producers has grown from 2.4 per cent to 4.0 per cent in 2011; with hydro’s share up from 0.8 to 1.5 per cent. Low carbon sources accounted for over 25 per cent of major power producers generation in 2011, up 5 percentage points on 2010 levels.

A mid-term review of the European Energy Programme for Recovery has found that offshore wind energy is the strongest performer of the three areas selected for funding in terms of investment, creating jobs and putting investment in place quickly. The Eur4 billion European Energy Programme for Recovery (EEPR) was launched in 2009 in response to the economic crisis and the need to meet EU energy policy objectives. Three areas – offshore wind energy, gas and electricity infrastructure projects and carbon capture and storage (CCS) – were selected for funding.

Offshore wind energy was allocated the smallest amount of funding – Eur565 million or 14% of the total – but has created ten times more jobs than CCS projects. Since 2009, a total of 4,000 jobs have been created in offshore wind projects financed under the EEPR compared to 400 in CCS, despite CCS being allocated nearly double (Eur1.05 billion) the amount allotted to offshore wind.

Vilma Radvilaite, Regulatory Affairs Advisor at EWEA, comments: “It shows that wind energy projects are an ideal way to stimulate economic growth and create jobs while at the same time reducing greenhouse gas emissions, and improving our energy security. Investment in the wind power sector should be recognised as a way to restore Europe’s economy to health. This report shows that stable legislative frameworks to promote the development of the wind industry should be maintained and enhanced, even in times of austerity.”

Under the Eur4 billion EEPR, 44 gas and electricity infrastructure projects, nine offshore wind energy projects and six CCS projects received funding.

The Energy Innovation Centre has revealed access to £29.2 million of funding for innovators and companies looking to bring new ideas for tomorrow’s energy industry to market. Available from February 2012, the funding can be accessed via the Energy Innovation Centre and investments will be selected by five of the UK’s leading electricity distribution companies – Electricity North West, Northern Power Grid, ScottishPower Energy Networks, Scottish and Southern Energy and UK Power Networks. These major players are looking to implement new services and technologies to enhance the way power is transported, monitored and stored.

The funding available originates from Ofgem’s Innovation Funding Incentive scheme and the £500m Low Carbon Networks (LCN) Fund.

“This is another huge step forward for innovators and businesses that need to accelerate their ideas to market. As part of this initiative we will continue to deliver a range of support services, including opportunities to test technologies on high and low voltage power networks and establish relationships with potential customers,” comments Denise Massey, director of the Energy Innovation Centre. “This is an opportunity for the UK to further develop the way energy is distributed whether this is a new or early stage idea or an existing technology from another industry which will improve the energy supply process. We are looking for products that will help manage demand, and encourage more efficient use of energy in the home and workplace.”

The UK power industries operate power networks with a replacement value of £150 billion and invest £1.5 billion per annum on maintaining and growing their 500,000 miles of cable which deliver electricity to homes.

Mark Mathieson, managing director of networks at Scottish and Southern Energy, says: “The low carbon agenda will change the way we buy and procure energy from the model we’re used to. Not a lot has changed since the 1930s but we as we move towards the likes of wind generation, electric cars, PV systems we’re looking at a more intermittent and complex mix of energy generation and use. The flows of energy will be completely different to what we’re used to and we need to manage the new constraints. Fault detection and resolution will also become increasingly complex.”

Since its launch in 2008 the Cheshire-based Energy Innovation Centre has provided business support to over 140 SMEs, start-ups and inventors from the UK and internationally. The Centre offers a complete range of services including product development, funding assistance, business support and access to power experts, and is committed to turning energy saving ideas into commercial reality.

For more information about the funding available and to see a list of industry technology gaps call 0151 347 2433 or visit www.energyinnovationcentre.com.

CAPTION:

Pictured (left to right): Chris Goodhand, innovation manager of CE Electric; Mike Kay, director of engineering and planning of Electricity North West; Stewart Reid, future networks and policy manager of Scottish and Southern Energy (SSE); and Denise Massey, director of the Energy Innovation Centre.

Following a series of significant increases in energy prices and within the context of Northern Ireland having the highest levels of fuel poverty in the UK (double that in Great Britain), the Consumer Council is urging the Executive and the Regulator to re-examine the McIldoon Report and ensure that energy policy and regulatory frameworks provide consumers with the best possible deal.

Antoinette McKeown, Consumer Council chief executive explains: “In light of recent energy price rises, the Consumer Council has reviewed Douglas McIldoon’s 2008 report and we agree with his continuing conclusion that energy policy in Northern Ireland remains confused and contradictory today. Our concern is that consumers could be paying less for their electricity but the Consumer Council cannot act alone to achieve that. At the very least we believe there should be debate around how electricity prices could be lowered; this report is our contribution to that debate.”

Northern Ireland currently has the highest energy bills in the United Kingdom and recent statistics from Westminster show that the highest average annual energy bill in Great Britain is around £1,000 cheaper than the average annual combined oil and electricity bill in Northern Ireland. Furthermore, in Northern Ireland 44 per cent of households are in fuel poverty compared to 13 per cent in Great Britain.

In conjunction with launching its report ‘Consumer Council Analysis of the McIldoon Report – Orphans in the Energy Storm’, the Consumer Council is putting a number of questions to the NI Executive and the NI Utility Regulator including:

* Why does the price of electricity produced by wind generators rise when the price of gas rises?

* Why does the most expensive electricity generator set the price that is paid to all generators on the Island of Ireland?

* Why are some generators making profit margins of between 20 and 50 per cent when NI’s top 100 companies are seeing margins between 1 and 6 per cent?

* Why are wind generators paid for being on standby when the wind is not blowing?

The EU achieved its 2010 target of 21% of electricity consumption from renewable sources, according to latest analysis by the European Wind Energy Association (EWEA). In 2010 renewable energies produced between 665 Terrawatt hours (TWh) and 673 TWh, hitting the 21% target given consumption was around 3,115 TWh to 3,175 TWh. If renewable electricity production in the EU continued to grow at the same rate as it did from 2005 to 2010 it would account for 36.4% of electricity in 2020 and 51.6% in 2030.

“The renewable electricity targets set back in 2001 have been realistic as well as effective,” said Justin Wilkes, EWEA’s director of policy. “The targets have worked in achieving their purpose within the time foreseen. This success is why industry is calling for an ambitious 2030 target for renewables.”

He adds: “The growth achieved in the last five years has been outstanding and if continued would result in over half of the EU’s electricity coming from renewables by 2030. A long-term stable framework, underpinned by an ambitious 2030 renewable energy target, is clearly the proven way to ensure Europe meets its climate, competitiveness and energy security goals.”

The growth of renewables between 2005 and 2010 was largely carried by onshore wind. In future the renewables sector will benefit from significant growth in offshore wind and other technologies as they become more mature.

EDF Energy has announced it will cut gas prices by 5%, making it the first major energy supplier to lower prices this year. The move, effective from 7 February, follows in the footsteps of smaller energy firms Co-operative Energy and Ovo Energy, who have already announced price decreases.

The price cut will be on gas, and not electricity. EDF Energy was the last of the major energy companies to raise its prices after it upped gas by 15% and electricity by 4.5% in November.

Which? executive director Richard Lloyd says: “This gas price cut will be welcome news for millions of consumers with already squeezed household budgets. But it follows a hike of 15% last November. Now the pressure is on for the rest of the major suppliers to follow suit. But as our survey today shows, there remain huge problems with customer service in energy as well as high prices.”

Four million complaints were received last year by the UK’s ‘big six’ energy companies – British Gas, EDF Energy, Eon, Npower, SSE and Scottish Power – and tens of thousands were still unresolved after eight weeks, according to a new Which? investigation. A Which? survey reveals that 40% have had a problem with a gas and electricity company in the last two years – a large number for an industry where very little should go wrong with the product itself.

The most common problems people reported were billing and meter problems, including mistakes on bills, inaccurate meter readings and missing bills. But almost a quarter (23%) of those who had a problem with an energy supplier did nothing about it.

If consumers don’t complain, there is no chance for things to be put right. Thousands could be missing out on compensation from the energy ombudsman – the next port of call for complaints not satisfactorily dealt with by energy suppliers – and, according to Which? research, the amount of unclaimed payments could be as much as £4 million a year.

Which? executive director Richard Lloyd says: “These findings reveal shockingly high levels of complaints and low levels of customer satisfaction in the energy industry, at a time when domestic bills have gone through the roof. Ofgem, the regulator, should publish the truth about the full level of complaints in this essential service. Energy suppliers should be held publicly accountable, on a regular basis, for putting right the problems their customers are reporting.”

British Gas and Npower Fined

The news comes shortly after Npower and British Gas were fined by the energy watchdog Ofgem for mishandling complaints. British Gas was fined £2.5 million and Npower £2 million. This represents only 0.02% of British Gas’s turnover in 2010. Both companies will have to pay their penalty by 22 February 2012.

These findings come alongside the results of the 2012 Which? Switch satisfaction survey, which reveals the ‘best and worst energy companies’ according to their customers, in the biggest publicly available survey of its kind.

The Which? Switch 2012 satisfaction survey reveals the best and worst energy suppliers from a survey of over 8,000 people. Good Energy tops the table with the highest customer score (84%), followed by Utility Warehouse (78%) and Ecotricity (77%). Of the larger companies, SSE comes first with a customer score of 51%, and Npower comes last with only 41%.

Wind power supplied an average of 5.3% of the UK’s demand for electricity for December and early January, reaching a record share of 12.2% on 28th December. As a result, carbon emissions from the UK’s electricity generators were cut by over 750,000 tonnes, equivalent to taking over 300,000 cars off the road.

Dr Gordon Edge, director of policy at RenewableUK, the trade association for the wind, wave & tidal industry, comments “Wind energy represents a new paradigm in electricity generation, allowing us to harness the power of the weather when it’s available, cutting our fossil fuel bills and lowering our carbon emissions. As we’re generating increasingly large amounts of electricity from wind, feeding those large volumes of power into the system represents an engineering challenge to the National Grid – a challenge we are pleased to see they met over Christmas.”

National Grid is responsible for balancing the output of the UK’s electricity generators with demand from consumers and businesses on a minute by minute basis. Integrating the variable output of wind generators involves taking a range of balancing actions, including reducing the rate at which fossil fuel generators consume fuel when wind output is higher. Last year, National Grid launched a new wind power forecasting system, allowing their engineers to more accurately predict output from the UK’s growing fleet of wind farms.

A decrease in both gas and electricity prices drove the Bord Gais Energy Index 1% lower for the month of December but it was 5% higher for 2011 as a whole. The ongoing European sovereign debt crisis, fears about global economic growth in 2012 and a mild start to the winter across Ireland, the UK and Europe, all contributed to put downward pressure on gas and electricity prices. However, Ireland did not benefit fully from falls in fuel commodity prices as the euro weakened over the month.

The average price of Brent crude oil posted a record high in 2011 as daily oil demand hit a new high of 89 million barrels per day, as growing demand from the emerging market countries continued. Prices were also supported by concerns about supply from the Middle East and North Africa. As a result, the Bord Gais Energy Index now stands at 143, which is 5% higher than in December 2010.

John Heffernan, power trader at Bord Gais Energy, comments: “The Index recorded a 1% drop for December; however the impact of the decrease in fuel commodity prices was offset as the euro weakened over the month. This meant that in euro terms, oil and coal prices increased over the month. There are a number of strong influences that are putting downward pressure on fuel commodities including: the European debt crisis, fears of a slowing global economy in 2012 and mild weather across Europe. Should the euro continue to weaken versus the US dollar, euro zone buyers will not benefit fully from any price falls and would have to pay even more should prices increase.”

The following are the key trends recorded for the month of December:

Oil: The oil element of the Index was up 1% to 152. Due to the ongoing European sovereign debt concerns, the possibility of a European recession in 2012 and fears of further ratings downgrades. In US dollar terms, oil prices weakened in December. However, euro zone buyers of oil, such as Ireland, did not benefit fully from this fall as the euro weakened significantly versus the US dollar. Because of this, in euro terms, the cost of oil increased by 1%.

Natural Gas: The natural gas element of the Index was down 1% to 189. A mild start to the winter across Ireland, the U.K. and mainland Europe, depressed demand in December and has resulted in relatively high stock levels for this time of the year. This put downward pressure on prices over the month. Temperatures above seasonal norms in December reduced demand for gas-fired central heating and the holiday season also lead to the seasonal slowdown of many businesses and industry. The ongoing European sovereign debt crisis is also weighing on prices as it is now likely that Europe will burn less gas in 2012 as activity and production slows.

Coal: The coal element of the Index was up 2% to 145. In US dollar terms, coal prices fell in December as the world experienced an oversupply of coal. Economic uncertainties and a comparatively mild winter is restricting European demand. However, euro zone buyers of coal, such as Ireland, did not benefit fully from the fall in international coal prices as the euro weakened significantly versus the US dollar. Because of this, in euro terms, the cost of coal increased by 2% over the month.

Electricity: The electricity element of the Index was down 4% to 118. The average wholesale Irish electricity price for December closed 4% lower than its November equivalent as unseasonably mild weather and reduced demand for electricity pushed prices downwards. In addition, as the cost of gas and carbon reduced in the month, the cost of producing electricity fell. The availability of hydro and wind power put additional downward pressure on prices.