The energy crisis

Originally Posted by nomadking

And how exactly would gas storage solve anything?

Germany only has capacity for a quarter of their annual consumption, and it has to be filled up at the new higher costs. A quarter of Germany's gas storage is owned by GazProm.

https://www.rpsgroup.com/insights/en...ansition-mix/#

In September 2021, due to a sustained period of very low winds, the current renewable energy supply was unable to meet demand.

Coinciding with an extreme spike in spot market gas prices, making gas supply uneconomical, the UK had to start up one of two remaining coal–fired power stations to meet electricity demand.Stored natural gas currently allows countries to meet their seasonal power demands, for instance in winter when gas demand is likely to exceed newly generated supply. However, in the future, it’s also likely to be required to help meet power demands during the intermittent outages as described above.

Although clearly not the case at present, gas storage also has an essential role in rebalancing an oversupplied market. Storage means that a valuable commodity can be ‘demand–ready’ and allow for more sustainable production and transport from ‘advantaged’ basins to create a more equitable supply. Thus, it also has a crucial role to play in the security of gas supply in the context of rising geopolitical risks and trade tensions.

https://www.eua.org.uk/uploads/57285500B54F4.pdf

The insurance provided by gas storage not only enhances physical gas security, but insulates those countries from the vagaries of the global gas market and its associated price risks. In short, gas storage is a vital national asset which contributes to the economic wellbeing of the majority of European member states…

... The Benefits of Gas Storage (“why does it matter?”)

Gas storage provides a multitude of benefits to the UK energy market, in particular it:
• delivers physical gas and is more reliable than other sources of gas supply as it is not exposed to the same risk of being diverted to other markets
• is located close to, and often embedded in, the UK gas market and so can react quickly to demand or supply shocks
• provides delivery support for other sources of supply
• reduces the average cost of consumers’ bills
• reduces the investment needs of the national transmission system and importantly for the physical security of supply
• is available to be called upon by National Grid in a Gas Emergency

However, not all of the value associated with these benefits is captured by the current
commercial arrangements between storage providers and market participants.
These include (i) the contribution it makes to energy security of supply, (ii) the impact it has on reducing consumer bills and (iii) the impact gas storage has on avoiding the need for costly network investment.

[nomadking]

Gas storage facilities are privately owned. The gas in them has to be paid for in advance, as well as the cost of eventual higher cost of refilling the storage.

The fact that gas prices in Germany are also shooting up, demonstrates that having gas storage achieves little on that issue. Germany used its stored gas to cope with increased demand and lower Wind power output, NOT increased prices.

Russia's own gas storage is also down.
Adeline Van Houtte, a Europe analyst at the Economist's Intelligence Unit, says: "Currently, the Russian domestic gas market remains tight, with output already near its peak and winter is looming... limiting gas export capacity."
There are several other factors affecting the situation in Europe, such as:

• cold weather at the start of 2021 depleting stocks
• rising prices in spring and summer put traders off buying to sell later in the year
• limited supply from Norway because of maintenance issues
• reduction in other energy sources such as wind power
• growing demand for gas elsewhere in the world

[Carth]

Globally, this net zero thing has had an impact after all, but probably not the impact everyone was talking about

[Jaymoss]

The UK used to drill its own Gas Wells if it invested in storage and did not sell it all off we would not have to buy any from anyone else. This is why I have banged my head against a brick wall with the 30+ years ago when it all got screwed up

British Gas was privatised in 1986 by that wonderful prime minister Thatcher we are in this mess imo directly due to this event in history

[1andrew1]

Originally Posted by Jaymoss

The UK used to drill its own Gas Wells if it invested in storage and did not sell it all off we would not have to buy any from anyone else. This is why I have banged my head against a brick wall with the 30+ years ago when it all got screwed up

British Gas was privatised in 1986 by that wonderful prime minister Thatcher we are in this mess imo directly due to this event in history

It could be a government-owned British Gas would have sold the storage off as well, we just don't know.

To me, it's a failure of regulation. The regulator should have ensured a strategic gas storage facility remained and there was a funding mechanism in place to ensure this.

[Sephiroth]

Originally Posted by Jaymoss

The UK used to drill its own Gas Wells if it invested in storage and did not sell it all off we would not have to buy any from anyone else. This is why I have banged my head against a brick wall with the 30+ years ago when it all got screwed up

British Gas was privatised in 1986 by that wonderful prime minister Thatcher we are in this mess imo directly due to this event in history

She was wonderful except for the privatisation of national utilities. I can see why - she wanted to bring cash in to fund capital projects and debt. Since then, that privatisation has been a blot on the country's copy book.

[GrimUpNorth]

Originally Posted by Sephiroth

She was wonderful except for the privatisation of national utilities. I can see why - she wanted to bring cash in to fund capital projects and debt. Since then, that privatisation has been a blot on the country's copy book.

I think you're right about privatisation, it's always seemed fundamentally wrong to try and make a profit (for shareholders) out of a public service. Another thing where we probably went wrong was not following the lead of other oil and gas producing countries and establishing a sovereign wealth fund from the profits to give us an income when the oil dollars dry up.

[1andrew1]

Originally Posted by GrimUpNorth

Another thing where we probably went wrong was not following the lead of other oil and gas producing countries and establishing a sovereign wealth fund from the profits to give us an income when the oil dollars dry up.

Would have been nice. Did we just use it to help pay the US war debt and prop up loss-making industries?

[Jaymoss]

Originally Posted by 1andrew1

It could be a government-owned British Gas would have sold the storage off as well, we just don't know.

To me, it's a failure of regulation. The regulator should have ensured a strategic gas storage facility remained and there was a funding mechanism in place to ensure this.

wow that is a stretch. Counter my point with speculation and fantasy

[1andrew1]

Originally Posted by Jaymoss

wow that is a stretch. Counter my point with speculation and fantasy

It's a discussion and it's not fantasy.

[Jaymoss]

Originally Posted by 1andrew1

It's a discussion and it's not fantasy.

Your conjecture that BG might have sold the storage anyway is.

[1andrew1]

Originally Posted by Jaymoss

Your conjecture that BG might have sold the storage anyway is.

It's equally conjecture to say that they would have retained it.

[Carth]

Did anyone here buy shares when the great sell off happened?

If so, do you still have them (Royal Dutch Shell now I believe)?

or am I (again) light years away with my knowledge of events

Not sure the Energy Loan/Levy has been fully thought through…



https://twitter.com/martinslewis/sta...235065344?s=21

[Inactive Digital]

Originally Posted by Hugh

Not sure the Energy Loan/Levy has been fully thought through…



https://twitter.com/martinslewis/sta...235065344?s=21

And what happens to those moving into their first homes in 2023 - are they expected to pay an additional £40 per year despite not getting the benefit? What if someone takes the £200 in October then closes their account and their partner/housemate etc opens a new account. There seems to be loopholes in this.