Welcome to Grid Brief! Here’s what we’re looking at today: Centrica warns that the UK needs more gas storage for energy security, renewables advocates pitch a fit at ISO-New England’s latest Consumer Liaison Group meeting, Pakistan offers LNG tenders for the first time since last summer, and more.

Centrica: UK Needs More Gas Storage

The United Kingdom has a gas storage problem.

“While a partial reopening in October of the UK’s largest gas storage, Rough, boosted the country’s capacity to stockpile the fuel, that’s not enough, Chris O’Shea, chief executive officer of Centrica — the facility’s owner — said Tuesday,” reports Bloomberg.

“We increased the UK’s gas storage capacity by 50% — this is no small achievement,” O’Shea said. “But this increase means that the UK now has nine days of peak winter demand in storage capacity, which is by far the lowest in Europe and is nowhere near enough to make our energy system resilient.”

Compare that to Germany’s 89 days worth of peak demand storage.

Centrica’s Rough facility has only re-opened about a fifth of its capacity. The company has sought minimum revenue guarantees to aid long-term investment in the Rough. Centrica plans to transform it into a hydrogen storage facility to aid the energy transition.

ISO-NE Consumers Meeting Gets Heated

Last week, activists pled with the New England grid operator—ISO-NE—to finally ditch fossil fuels and commit to the energy transition.

Most of the frustration was a response to the construction of a gas peaker plant in Peaboy, Massachusetts, which the activists condemned. One speaker said they wanted this to be the last fossil fuel investment made in the state and asked what it would take to replace the plant with solar plus battery storage.

The ISO-NE was also condemned for burning oil to keep the lights on during harsh winter conditions.

“Every time we come and ask for a just transition, we hear these arguments that ‘ISO has to be neutral; we can’t take a political stance on one form of energy over another,’” said one speaker, as quoted in a piece by RTO Insider. “ISO is already deciding what fuels are present on our grid and picking fossil fuels. My question is, how do we fix this? Do we need to change the tariff? Do we need to abolish [the] ISO itself?”

Another speaker asked ISO-NE to reverse its commitment to well-functioning markets and reliability to instead focus on reducing carbon emissions to stop climate change.

“What we really want to hear is that your heart is in saving life — not in the lights coming on every time someone wants to make an egg,” he said.

“ISO-NE Vice President Anne George pushed back on almost every point,” reports RTO Insider.

“Reliability also affects lives,” she emphasized.

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Pakistan Offers LNG Tenders

Pakistan has offered tenders for spot liquified natural gas contracts for the first time since May of last year.

“The delivery windows are Oct. 5-6, 20-21 and 31, and Dec. 7-8, 13-14 and 24-25. The tender will close on June 20,” reports Reuters. “Pakistan LNG's second tender seeks three cargoes, also on DES basis to Port Qasim, for delivery windows of January 3-4, 28-29 and February 23-24. The second tender closes on July 14.”

Pakistan, which was priced out of the market by Europe after Russia invaded Ukraine, offered tenders in July of last year to no avail. Now that the LNG market is glutted with supply—in part thanks to Europe’s recession—more sensitive buyers like Pakistan feel safer stepping back into the market.

The country has also inked a monthly LNG delivery deal with Azerbaijan. But as the saying goes: once bitten, twice shy. Pakistan learned a painful lesson in the early months of the energy crisis—no matter what wealthy western nations say about climate and emissions, they will do whatever they can to keep their lights on; even at the expense of others. So, Pakistan is looking to build more coal and nuclear plants to reduce its vulnerability to the international LNG market.

Conversation Starters

• Mexico acquires Iberdola’s gas plants. “Spanish utility giant Iberdrola has signed an agreement with Mexico to sell its combined cycle gas plants in the country for $6 billion in a deal previously described by Mexican President Andres Manuel Lopez Obrador as ‘a new nationalization of our electric industry,’” reports Oilprice.com. “Iberdrola, which is increasingly focused on wind and solar power generation in Europe and the Americas, is selling 55% of its Mexican business to Mexico Infrastructure Partners (MIP). The sale includes 99% of Iberdrola’s combined cycle gas plants and 87% of Iberdrola plants operating under the Independent Power Producer regime, contracted with the Federal Electricity Commission (CFE). In total, Iberdrola is selling 13 gas-fired power plants to an entity of the Mexican government.”

• South Korea makes a bold move in hydrogen. “South Korea is opening what it claims is the world’s first hydrogen power generation bidding market, while the International Energy Agency says that Omani hydrogen production could surpass current European consumption levels,” reports PV Mag. “The selection of a winning bidder is scheduled for the middle of August. The government has planned two bidding rounds this year, with a total volume of 1,300 GWh, and the first round aims to allocate half of this volume.”

• Slovakia wants SMRs. “The Ministry of Economy and Slovenské elektrárne have signed a memorandum of cooperation with a range of partners in the energy field to support the development of small modular reactors (SMRs) in Slovakia, including applying for funding from the USA's Project Phoenix,” reports World Nuclear News. “The other signatories of the memorandum were US Steel Košice, the Slovak Electricity Transmission System, VUJE, the Office of Nuclear Supervision and the Slovak Technical University in Bratislava. There will now be an application for funding from the US government's Project Phoenix, which was announced by US Climate Envoy John Kerry at COP27 last year - it aims to ‘accelerate the global clean energy transition by providing technical assistance to support decision-making on pursuing the conversion of one or more coal-fired power plants to secure and safe zero-carbon’ SMR nuclear energy generation.”

Crom’s Blessing

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