UK Doubles Coal Imports // NYISO Warns of High Electricity Prices // The First LNG Shipment From Australia to Europe

UK Doubles Coal Imports

In response to rising gas prices, the United Kingdom has doubled its coal imports to prepare for winter.

"Figures from Kpler, a commodity analytics firm, show that last month more than 560,000 tonnes of coal came into British ports, compared to the 291,089 tonnes that arrived in October 2021, a 93 per cent increase," reports The Times. "In the first 10 months of this year, the UK imported more than 5.5 million tonnes of coal, already exceeding the 4.2 million tonnes throughout the whole of 2021."

Sanctions of Russian energy in response to the Ukraine war have spiked gas prices. “With gas prices like these, relying on natural gas for power generation is a no-go zone for anyone who can switch between fuels," said Victor Katona, a senior analyst at Kpler. Thus the Iron Law of Electricity--people will do whatever they can to get the electricity they need--holds firm. 

UK green groups are furious that coal has experienced this brief resurgence. ‘’Instead of replacing Russian fossil fuels with more polluting coal, banging its head against the same wall and hoping for the headaches to go away, the government should invest in home insulation and renewables,” Louis Wilson of the NGO Global Witness told The Times.

It's difficult to be polite about such a comment. I would describe Wilson's remark as "not even wrong" to be diplomatic. A wind lull across Europe, which also sapped the UK wind fleet, is part of what set up this energy crisis as it forced countries to burn through their gas reserves to keep the lights on. Renewables are simply not up to the task of powering modern society and no amount of insulation can replace the kilowatt-hours the UK needs to keep the lights on.

NYISO Warns of High Electricity Prices

Yesterday, the New York Independent System Operator reported that it anticipates its electricity supplies are adequate to match peak winter demand. NYISO expects a peak demand of 23,893 MW (about 3% higher than last year's peak) based on forecasted winter temperatures. But the grid operator also believes consumers' wallets will still weep. 

“The New York state bulk electric system is well positioned to meet this winter’s forecasted demand and maintain reliability throughout the season,” Aaron Markham, vice president of operations, said. “However, as we have been highlighting for over a year, national and international economic conditions are contributing to a spike in consumer bills.”

"The U.S. Energy Information Administration projected that the price of natural gas delivered to electric generators will average $8.81/MMBtu this summer, up from $3.93/MMBtu in 2021," reports Utility Dive. "Actual prices are less, but still higher than last year. Prices averaged $7.28/MMBtu, down from $7.70/MMBtu in June and $8.14/MMBtu in May." The EIA expects similar prices through to the end of 2022. 

NYISO is also keeping an eye on its fuel inventories in the region, as the EIA has recently reported that both regionally and nation-wide, oil inventories sit "below historical values." "Seasonal and weekly fuel surveys indicate oil and dual-fuel generation have sufficient start-of-winter oil inventories but are lower than past years’ inventories," reports Utility Dive.

The First LNG Shipment From Australia to Europe

Where once Australia sent LNG to North Asia, the country is now sending it much farther to Europe.

"Woodside Energy Group said on Monday it has shipped a liquefied natural gas cargo to Europe from Australia's North West Shelf project for the first time, which the buyer Uniper said would help make up for supply lost from Russia," reports Reuters. "The 75,000-tonne cargo, equivalent to 100 million cubic metres of gas, was delivered on Nov. 27 to Uniper Global Commodities SE (Uniper) at the Gate Terminal on Maasvlakte."

"We continue to work on securing the much needed gas supply into Europe from reliable sources like Australia and thus helping to strengthen security of supply during the ongoing crisis triggered by the Russian war," said Uniper's Director LNG Andreas Gemballa in a joint statement with Woodside.

This, in part, explains why the German government's Uniper bailout keeps getting more expensive. 

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Conversation Starters

1. Germany is cooking up a windfall tax for wind and solar generators. "Germany is to table a €130 per megawatt hour cap on the earnings of wind, solar and nuclear generators," reports ReNews. "The German government plans to reclaim some of the profits being made by electricity companies on the back of high power prices to fund a €54bn consumer aid package outlined this month. The law is scheduled to pass the upper house of the German Parliament on 16 December and go into effect on 1 January."

2. The DOE's watchdog is too underfunded to monitor fraudulent green energy projects. "The Energy Department’s internal watchdog is warning that she can’t properly oversee the department that’s playing a central role in the Biden administration’s energy and infrastructure policies," reports E&E News. "DOE Inspector General Teri Donaldson sent a memo and a special report to Energy Secretary Jennifer Granholm this month warning that the IG’s office doesn’t have sufficient funding to keep tabs on the department as it takes on new programs and receives a cash influx under massive new climate, energy and infrastructure legislation."

3. Europe's LNG import capacity is set to increase over a third by 2024. "Liquefied natural gas (LNG) import capacity in the European Union (EU) and the United Kingdom (UK) will expand by 34%, or 6.8 billion cubic feet per day (Bcf/d), by 2024 compared with 2021, according to the International Group of Liquefied Natural Gas Importers (GIIGNL) and trade press data. Expansions of import, or regasification, capacity will total 5.3 Bcf/d by the end of next year and grow further by an additional 1.5 Bcf/d by the end of 2024," reports the Energy Information Administration. 

Crom's Blessing