Tuesday, December 20, 2005

About average weather

Chilly for Charles is a good way of looking at the 7 day near ground level weather forecast and the 850 hPa 16 day forecast.

What is important from the 850hPa is that this winter is about the same as the last 30 on average. That implies this year's gas consumption is likely to be about the same as last year minus the approx 20-30 mcm/d that has stopped using gas because of the price.

The evidence of utilities now losing money on supplying gas has become clear from British Gas who have the advantage of also having gas supplies. Of course there are those who don't have the advantage of having their own gas. They could have hedged their bets, but I would not be shocked if one or two shippers hadn't.

There was a good event run last Friday in London and I have just received the papers from it. It does show that the chances of an emergency are touch and go. The really interesting question is whether the safety monitors should be recalculated on the basis of a lower forecast of gas availability from day to day supplies.

Last year's demand peaked at about 440 mcm/d in Jan/Feb. If the weather is about the same or colder than last year then the situation is really not clear. Something like 21% of Electricity Generation is spare, but 30% of Generation Capacity is from Gas. This implies that a cold stretch of say 2 days would result in power cuts. There are supposed to be 16 mcm/d of extra North Sea gas coming on line in January. This will make a big difference to marginal situations.


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