Daily Energy Report
UK power generation by source, Russian oil flows to Europe, Iraq’s northern crude exports via Ceyhan, sour crude oil market, US crude exports, Spain’s drought “emergency”, and more
CHART OF THE DAY: Share of UK Power Generation from Gas
Figure (1) above shows that natural gas was the dominant source of power generation in the UK in 2022 with a 38.5% share of the fuel mix, followed by wind at 26.8%, nuclear at 15.5%, biomass at 5.2%, and coal at 1.5%.
EOA’s Main Takeaway
The Chart of the Day is a response to claims that wind has become the top energy source for power generation in the UK, exceeding natural gas.
Reporting oil and gas exports or imports for the first week of any month, and drawing conclusions for the whole month is a flawed approach to interpreting any data. The same goes for reporting power generation for the first 2-3 months of the year.
Wind is seasonal and now is the time to harvest it. It is hot in summer because wind is not blowing, and this is the time of the year when natural gas is heavily used for power generation. Looking at averages for the whole year, the 2023 power generation mix is not going to be much different from that of 2022. The demand for natural gas will continue to rise, especially if we end up with a hot summer. The wind share now is high in Britain’s electricity generation mix, which means that the country will need massive amounts of gas to cover any potential wind gap.
We share below reports on this subject from 2021:
ELECTRIC INSIGHTS: Q1 2021: When The Wind Goes, Gas Fills In The Gap
STORY OF THE DAY
Reuters quoted market sources as saying that amid rising global demand and output cuts implemented by OPEC+, sour crude oil stocks are expected to be squeezed as US oil refiners boost purchases for the summer driving season.
Meanwhile, the April shutdown of Shell Plc's 375,000 b/d Zydeco oil pipeline in the Gulf of Mexico due to a “limited” leak, is also likely to reduce supplies. According to Reuters, the pipeline system connects different crude oil pipelines in Houston and Port Neches.