Utility Week

UTILITY WEEK | 4TH - 10TH MAY 2018 | 13 Policy & Regulation A mix of supply is important "The Beast from the East" showcased the value of existing fast-cycle gas storage facilities. View from the top Felix Lerch, chairman, Uniper UK I t's easy to forget that not that many weeks ago, much of the country was in the grip of "the Beast from the East". It's at times like this that the challenges of ensuring security of supply are brought into sharp focus, and I'm proud of the part Uniper played – and continues to play – in ensuring there's power and gas when it's needed. All our generation plant, for exam- ple our gas-fired power stations at Grain in the South East and Connah's Quay in North Wales, reliably delivered. Our fast-cycle gas storage facility at Holford in Cheshire also helped ensure, in spite of the extreme weather con- ditions and the demand on the system, that National Grid was able to balance gas supply and demand. It was a demonstration of the importance of being able to call upon a diverse mix of both power and gas supply sources, showing the UK could indeed manage the combination of unseasonal cold weather, high demand on the gas network, and a reduction in supplies due to the unavailability of some of the gas infrastructure. It also high- lighted that a reliable gas supply from pipelines cannot be guar- anteed; the same could easily be the case for electricity intercon- nector flows, responding to mar- ket prices across countries that experienced similar conditions. There was inevitably com- ment about volatile and high gas prices during the cold weather, but these price spikes are a fea- ture of a well-functioning mar- ket, providing a price signal to incentivise the correct response from market participants and attracting the necessary supply. The "Beast" showcased the value of existing fast-cycle gas storage facilities. Responding to National Grid's first Gas Deficit Warning in eight years, with low- ering National Transmission Sys- tem (NTS) pressures across the system, Uniper's facility at Hol- ford ensured additional gas could be delivered at this time of need. We successfully and safely delivered additional gas above Holford's usual maximum flow rates, supporting system pres- sure and contributing towards a UK supply and demand balance. This supply mix is important. There is a well-documented slow decline of domestic production from the UK Continental Shelf, combined with a reduction in seasonal gas storage. At the same time, we are beginning to see more use of liquefied natu- ral gas (LNG). In other words, the UK market is attracting the cargoes when they are needed. Uniper is already a global player in commodity markets including natural gas and LNG. As well as maximising our out- put from our gas storage facility, we utilised our diverse portfolio to ensure supply across vari- ous markets during this critical period. Gas will undoubtedly con- tinue to be an important fuel during the energy transition, as we decarbonise the power sector and address the important chal- lenge of climate change. Natural gas, too, can play a role in decar- bonising transport, particularly in the logistics sector. The challenge of decarbonis- ing heat has been something of "the elephant in the room" in the UK, and it is good to see the gov- ernment is now turning its atten- tion to the heating sector. Here, there is a clear role for hydrogen. The UK is well placed to "repurpose" its extensive gas infrastructure to transport hydro- gen. And with the UK's potential to utilise wind as a resource, "power to gas" – converting power generated by wind tur- bines to hydrogen – we have an important technology for the gen- eration of truly green gas. Uniper already has some experience in this area: it's a route we believe the UK government could explore. Felix Lerch will speak at the Energy Summit in London on 21 June. For more information, visit: utilityweek.net/Summit18

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