Despite being championed regularly by the government during the mid-2020s, more recently, the embryonic shale gas industry in the UK has had to make its own case. Support for that case could be seen in recent reports by UK Onshore Oil and Gas and others which demonstrate the potential for developing indigenous gas production in GB (in the case of the former), as well as highlight a growing LNG sector globally. Against this context, this week’s Energy Perspective considers the prospects for building a new onshore GB gas production base.
Government policy has become gradually more sympathetic to intensive industry as its electricity prices have risen against neighbouring countries. But cost reliefs and support remain limited compared to several of those markets. Against this background – as we suggest in this week’s Policy section – the government’s new £315mn Industrial Energy Transformation Fund is an important initiative.
Although the Renewables Obligation is now closed to new capacity, the threat of mutualisation means the scheme is now trickier than ever for suppliers to manage. In our Regulation section, we look more closely at Ofgem’s Renewables Obligation Annual Report 2017-18, published 21 March, finding that lessons from setting the target over recent years seem to have been learned, with headroom delivering good prices for generators.
Our Industry Structure section takes a look at National Grid’s Summer Outlook 2019, the latest iteration of its annual report, published on 26 March. It demonstrates that current indications show a stable summer forecast, with ample gas supplies and the ability to meet both gas and power demand.
In November 2018, the final changes through BSC modification P305 were implemented. In this week’s Nutwood we consider recent developments including last weekend’s record sequence of negative prices.