UK gas demand so far in August has been around 19% higher than last year despite a much slower rate of storage injections this month, as demand from other sectors has risen, a Platts analysis of National Grid figures showed Friday.
UK gas demand so far this month has averaged around 159 million cubic meters/day -- up from around 133 million cu m/d during the same period last year -- as higher gas burn and exports, stronger local distribution zone (household) demand and a boost in demand from industrial units all contributed to the demand hike.
This has continued the recent trend of UK gas demand being higher than in 2013, after June demand was higher than a year earlier. UK gas demand averaged 176 million cu m/d in June against the June 2013 average of 160 million cu m/d. This also confirmed the recent bucking of the trend from the first half of 2014, where UK gas demand was 16% lower than for the first half of 2013, with each of the six months in H1 being lower year on year.
INCREASED GAS BURN AND EXPORTS
The largest contributors to the higher gas demand have been gas-for-power and gas exports.
Gas-for-power demand is up 62% year on year so far in August due to gas becoming the dominant fuel in the UK generation mix. The amount of gas used by gas-fired power plants has averaged 47 million cu m/d so far during August compared with 29 million cu m a year earlier.
With coal-fired power plants undergoing annual maintenance to operate at full capacity during the high demand winter period, and EDF currently only having nine of its 15 nuclear reactors online after closing the 550-MW unit 2 reactor at the Dungeness B power plant Friday until August 29, demand for gas from power plants can be expected to remain high for the remainder of August and possibly into September.
Furthermore, demand for UK gas from neighboring countries is up 79% so far this month compared to the same period of 2013, rising from 17 million cu m/d to 31 million cu m/d.
Moreover, LDZ demand has been boosted by temperatures dropping back below average for the time of year recently, and has increased by 6 million cu m (11%), with industrial demand 1 million cu m (16%) higher year on year.
Only demand from storage facilities for gas injections is down year on year, more than halving to 13 million cu m/d so far in August compared with 26 million a year earlier.
