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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
www.eiug.org.uk
International Federation of Industrial Energy Consumers
Avenue Louise 200, B 1050 Brusselswww.ifieceurope.org
EIUG
Jeremy Nicholson
Director – Energy Intensive Users Group
Energy Intensive Users Group British Ceramic Confederation British Glass Manufacturers Confederation Chemical Industries Association EnergyQuote Mineral Products Association Confederation of Paper Industries Major Energy Users Council Alcan; Anglesey Aluminium UK Steel BOC; Air Products
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
Context :• c.12 GW oil & coal fired capacity to be retired by 2016 (LCPD)
• c.7GW nuclear capacity to retire by 2018 (absent AGR life extension)
• Concern over gas import security (UK c.70% import dependent by 2020)
• Major investment required in energy supply chain (c.£200bn by 2020)
• UK committed to at least 34% reduction in ghg emissions by 2018-22
• EU renewable target: 15% UK energy by 2020
Implies >30% electricity – mostly wind (intermittency issues)
• UK aspiration for 40% low carbon electricity by 2020
• Political resistance to new coal absent CCS (still at demonstration stage)
Key concern to consumers:
need to maintain secure, competitive/affordable power supplies
EIUG
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
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2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17
UK CS
Belgium / Netherlands
LNG
Norway
EIUG
Gas Sources – growing import dependency:Source: National Grid TBE 2008 (Base Case)
bcm per year
Dependent on access arrangements and pre-contracting
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
Gas Storage – not nearly enough:
Storage Capacity
% Annual Demand
Germany 19%
Italy 16%
France 24%
UK 4%
EU 25 13%
North America 20%
Source: International Energy Agency – date unclear (pre 2006)
EIUG
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
Wholesale Gas Prices: UK (NBP) / EU (oil-indexed) / US (Henry Hub)
Source: EPSL, 2 September 2010
EIUG
Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-1225
30
35
40
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55
60
65
Gas Forward Prices: UK, US, European (oil indexed)
UK
Russia to Europe (oil indexed)
US p/th
erm
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
Forward Wholesale Gas Prices: Summer & Winter 2010-16UK NBP Offer - p/therm
Source: Spectron 21 September 2010
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S 10 W 10 S 11 W 11 S 12 W 12 S 13 W 13 S 14 W 14 S 15 W 15 S 16 W 16
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
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Belgiu
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Bulgar
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Czech
Rep
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Denm
ark
Germ
any
Estonia
Irela
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Spain
Greec
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France
Ita
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Cypru
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Latvi
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Lithuan
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Hungary
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Nether
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Portugal
Roman
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Slova
kia
Finla
nd
Sweden
UK
EU 27
2005 Energy Share
2020 Energy Target
EU Renewables (%)
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
8EIUG
13.713.1 13.0 12.9
12.211.8 11.6 11.5
10.8 10.7 10.510.1 10.1 10.0
9.7 9.5 9.3 9.2 9.08.7
8.0 7.87.3 7.1 7.0 6.9
6.66.2
0
5
10
15
UK
Spain
Denm
ark
Irela
nd
Germ
any
Italy
Nether
lands
EU 27
Belgiu
m
Austria
Portugal
Cypru
s
Luxem
bourg
Mal
ta
France
Finla
nd
Greec
e
Sweden
Slove
nia
Hungary
Lithuan
ia
Poland
Slova
kia
Latvi
a
Estonia
Czech
Rep
.
Bulgar
ia
Roman
ia
Growth required to meet EU Renewable Targets
(as % total energy, 2005 to 2020)Source: European Commission
JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
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Gre
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Bul
garia
Irel
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Net
herla
nds
Cze
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epub
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Uni
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Kin
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gary
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uani
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Pol
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onia
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Mal
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are
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ren
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(%
)
Other renewables
Large hydro
Indicative targets 2010
Source Data: Eurostat 2006
Note: Data on production of hydro plants larger
than 10 MW in Switzerland was not available from Eurostat, however several
large-scale hydro plants (>10MW) do exist
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
UK Renewable Energy Strategy: Consultation DocumentChapter 10 - Wider impacts - Page 231-2:
10.5.3. On the industrial side, for an average medium-sized consumer, the RO, EU ETS & CCL together contribute around 21% to industrial electricity
bills and about 4% to gas bills.
10.5.7 Our existing climate change policies are projected to add around 18% to annual domestic electricity bills and around 55% to industrial electricity bills by 2020
Additional impact of Renewable Energy Strategy measures by 2020:
Table 10.1 Industrial Electricity Bills: 10 to 16%Table 10.2 Industrial Gas Bills: 24 to 49%
(NB impact on household bills will be around half this level)
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
CIVITAS Report:
“British energy policy and the threat to
manufacturing industry”
Ruth Lea and Jeremy Nicholson
Online Report: April 2010
http://www.civitas.org.uk/pdf/EnergyPolicyApril2010.pdf
Parliamentary Group for Energy Studies: 23rd November
EIUG
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
UK's National Renewable Energy Plan (1)As submitted to European Commission 30 June 2020
http://ec.europa.eu/energy/renewables/transparency_platform/doc/national_renewable_energy_action_plan_uk_en.pdf
Table 1: Expected gross final energy consumption of the UK in heating and cooling, electricity and transport up to 2020 taking into account the effects of energy efficiency
and energy saving measures 2010 – 2020 (ktoe)
2005 2010 2020
BaseYear
referencescenario
additionalenergy
efficiency
referencescenario
additionalenergy
efficiency
Heating andcooling
66900 60000 60000 54800 51500
Table 6 - Estimated share of renewable energy in the building sector (%)
2005 2000 2015 2020Residential * * 1 4Commercial / Public * * 3 12Industrial * * 2 9Total 2 8
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
UK's National Renewable Energy Plan (2) As submitted to European Commission 30 June 2020
http://ec.europa.eu/energy/renewables/transparency_platform/doc/national_renewable_energy_action_plan_uk_en.pdf
Table 10: Estimation of total contribution (installed capacity, gross electricity generation) expected from each renewable energy technology in the UK to meet the binding 2020 targets and the indicative interim trajectory for
the shares of energy from renewable resources in electricity 2010-2014
2005 2010 2020MW GWh MW GWh MW GWh
PV 11 8 50 40 2,680 2,240Wind - Onshore 1,351 2,501 4,040 9,520 14,890 34,150Wind - Offshore 214 403 1,390 4,630 12,990 44,120
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
Generation By Fuel Type (table)
Current Last Half Hour Last 24 Hours(12:30-13:00) (13:00-13:00)
Generating Plant MW %age MW %age MWh %ageCCGT 20895 39.3% 20879 39.2% 460744 38.9%OCGT 0 0.0% 0 0.0% 1401 0.1%OIL 1395 2.6% 1433 2.7% 18919 1.6%COAL 24684 46.4% 24649 46.3% 547220 46.2%NUCLEAR 5114 9.6% 5117 9.6% 121898 10.3%WIND 378 0.7% 389 0.7% 6023 0.5%PS 347 0.7% 412 0.8% 14841 1.3%NPSHYD 351 0.7% 370 0.7% 9537 0.8%OTHER 0 0.0% 0 0.0% 0 0.0%Interconnectors MW %age MW %age MWh %ageINTFR 0 0.0% 0 0.0% 2658 0.2%INTIRL 16 0.0% 16 0.0% 129 0.0%TOTAL 53180 100% 53265 100% 1183371 100%
Data last updated:2009-01-06 13:25:00 (GMT)
www.bmreports.com/bsp_home.htm
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
Managing intermittency – implications for reserve (backup generation)
0
1,000
2,000
3,000
4,000
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2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
STORR (MW)
Source: National Grid ‘Future System Operations’ February 2009
‘Gone Green’ scenario overview – potential opportunities for reserve providers
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
Citigroup Global Markets 3 February 2010
'The extraordinary investment levels identified by Ofgem – £200bn over 10 years – is driven by the UK’s commitment to the renewable energy target. We fully agree with Ofgem’s cost assessment. The UK power and gas utilities are currently investing around £7bn per year, so will need to increase that investment rate to £20bn per annum – that is 2 London Olympics every year!'
'without the environmental targets, we calculate that the UK would need to invest only between £30-40bn in new power generation assets to replace and renew plant that is coming to the end of its engineering life and secure reliable generation and gas supplies‘
‘in our view, bills will need to rise by around 100% if £200bn of new assets are really to be built. But the consumer is guaranteed one thing. The UK seems to be setting out to create an electricity system that is substantially more expensive, less efficient, and less robust than the current system’
EIUG
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
UK ERC - Great expectations: The cost of offshore wind in UK waters - September 2010
EIUG
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JN (EIUG) - Ceramics, Stoke on Trent - 14th October 2010
EIUG
WWA Report for EIUG & TUC, July 2010:
“The Cumulative Impact of Climate Change Policies on UK Energy Intensive Industries – Are Policies Effectively Focussed?”
EIUG / TUC presentation to Parliament: 9th November
www.eiug.org.uk
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