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Irish gas supplies / Why Britain Has to Be Really Nice to Norway and Russia

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  • 21-06-2017 3:02pm
    #1
    Impetus
    Registered Users Posts: 1,667 ✭✭✭


    While Ireland has Corrib gas to supply a portion of its nat gas requirements for the next decade or so, in the context of Brexit, GB can no longer be seen as a reliable transit route/supplier for natural gas. Qatar is in a mess, thanks to Donald's Trump's recent visit to Saudi Arabia, and is/was the largest exporter of LNG in the world. In any event Ireland does not have an LNG reception facility connected to serious gas transmission pipelines - in terms of capacity - ie to replace natural gas inter-connector volumes.

    The Bloomberg article below spells out Britain's future gas risks, and Ireland will suffer if GB suffers - because of the lack of direct energy connectivity between Ireland and mainland Europe.

    On the electricity front, Ireland's interconnection capacity is totally with GB/NI. NI's electricity generation capacity is in a dire condition, and so is Britain's with its need to replace an ageing nuclear generation fleet. Add to that is the exchange rate risk for exports of electric power to a country that has a falling currency. Ireland needs several GW of direct power interconnection with mainland Europe (priced in EUR) to export wind surpluses and to import in times of low wind. A de facto big battery.


    https://www.bloomberg.com/news/articles/2017-06-20/u-k-at-mercy-of-global-gas-market-as-giant-storage-site-shuts


Comments

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    #2
    Tabnabs
    Moderators, Recreation & Hobbies Moderators, Sports Moderators Posts: 15,691 Mod ✭✭✭✭Tabnabs


    This isn't anything new and already steps are being taken to mitigate the effect of Brexit. An electricity inter-connector with France is being examined currently.

    https://www.youtube.com/watch?v=5VRymvLaxDM


    The UK has significant gas reserves still, but is lacking in storage capability. The ability to tap into Norwegian gas reserves is a bonus and similar to other European nations where gas is piped across other jurisdictions before reaching its final destination.

    The other side of the coin is the trouble that the Corrib field development received during construction means that developers will be reluctant to extract gas from the west and south coasts as the additional cost because of protests and disruption will make the projects unprofitable.


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    #3
    recedite
    Closed Accounts Posts: 13,993 ✭✭✭✭recedite


    Impetus wrote: »
    Ireland needs several GW of direct power interconnection with mainland Europe (priced in EUR) to export wind surpluses and to import in times of low wind. A de facto big battery.
    Yes, but how is Brexit going to affect that? UK never joined the euro, so the currency thing is irrelevant. Its quite normal for a fuel pipeline to traverse several countries before reaching the final market. Unless the UK actually declares war against France and /or Ireland we shouldn't have a problem with disruption of supply lines.
    Tabnabs wrote: »
    The other side of the coin is the trouble that the Corrib field development received during construction means that developers will be reluctant to extract gas from the west and south coasts as the additional cost because of protests and disruption will make the projects unprofitable.
    This is of course nonsense. They will extract gas if they can make a profit. If the cost of shafting the local community exceeds the cost of sharing some profit with them, then the companies will become benevolent instead of hostile. At Corrib, a lot of the security costs were borne by the state (Gardai) so it was still more profitable for the company to be hostile, despite the protests.

    Its normal in the USA for landowners to get some money from mining or fracking on their land, and in mainland Europe windfarms pay a direct dividend to the local community.

    But in Ireland, a precedent was established similar to that in third world countries whereby companies would pay the govt. and/or politicians instead. Then with govt. permission, they could go in and shaft the local people. Good old Ray Burke was quite happy with that.

    Thankfully there are some winds of change. Raheenlagh is a recent development on a mountain on the Wicklow/Wexford border that produces timber and electricity, has recreational walks, and delivers cash to local charities.


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    #4
    Impetus
    Registered Users Posts: 1,667 ✭✭✭Impetus


    Tabnabs wrote: »
    This isn't anything new and already steps are being taken to mitigate the effect of Brexit. An electricity inter-connector with France is being examined currently.

    https://www.youtube.com/watch?v=5VRymvLaxDM


    The UK has significant gas reserves still, but is lacking in storage capability. The ability to tap into Norwegian gas reserves is a bonus and similar to other European nations where gas is piped across other jurisdictions before reaching its final destination.

    The other side of the coin is the trouble that the Corrib field development received during construction means that developers will be reluctant to extract gas from the west and south coasts as the additional cost because of protests and disruption will make the projects unprofitable.

    GB comes first, when the pressure arises.

    There were no issues with Kinsale head - Ireland has lived off this gas for the past few decades. It seems to me to be a dumb west of Ireland issue.


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    #5
    Impetus
    Registered Users Posts: 1,667 ✭✭✭Impetus


    recedite wrote: »
    Yes, but how is Brexit going to affect that? UK never joined the euro, so the currency thing is irrelevant. Its quite normal for a fuel pipeline to traverse several countries before reaching the final market. Unless the UK actually declares war against France and /or Ireland we shouldn't have a problem with disruption of supply lines.

    Britain is not a Eurozone country - and its currency is falling in value since Brexit. One guest on CNBC this morning predicted an EUR 1 = GBP 1 FX rate.

    Britain has taken for granted some 700 laws within the EU over the past 40 years. Both Britain and their Anglo Saxon cousins in the US have massive balance of trade deficits - while the EU and Switzerland have the largest trade surpluses in the world. Every nook and cranny is up for negotiation. Britain is clueless on where it is going - or even the meaning of Brexit.

    The EU is going to dismantle Britain's financial centre - which is the largest tax paying region in that country. Unless GB says yes to all EU demands. And cut their gas feed off from mainland Europe. Ireland needs to prepare for this, or face an ice-age period on planet earth.


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    #6
    Impetus
    Registered Users Posts: 1,667 ✭✭✭Impetus


    recedite wrote: »
    Yes, but how is Brexit going to affect that? UK never joined the euro, so the currency thing is irrelevant. Its quite normal for a fuel pipeline to traverse several countries before reaching the final market. Unless the UK actually declares war against France and /or Ireland we shouldn't have a problem with disruption of supply lines.

    The price of electricity in GB and the province of NI is priced in GBP. The price of electricity in the Eurozone is priced in EUR. The GBP has sunk since the Brexit vote in the international markets. Back in the day one suggested that Ireland focus on direct grid connections with France etc, removing the FX risk from the cost of the grid infrastructure. Instead the idiot gov pursued a grid connection with GB. A connection which transported no power for several months, until recently.

    Britain has declared war against the entire EU by leaving the confederation. As a result the island has had an annus horribilis - between the Brexit result, murder in Manchester and London murders (not terrorism), its falling GBP forex rate, and the fire in the plastic coated skyscraper in London - of which there appears to be many similar buildings (including hospitals) on that island. Switzerland is not in the Eurozone either, yet it intelligently prices power flowing across swissgrid.ch URL]https://www.swissgrid.ch/swissgrid/en/home.html[/URL in EUR rather than CHF.


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    #7
    Victor
    Registered Users Posts: 78,241 ✭✭✭✭Victor


    Two useful sites to look at:

    http://smartgriddashboard.eirgrid.com/#all

    https://www.electricitymap.org/?wind=false&solar=false&page=map
    Impetus wrote: »
    While Ireland has Corrib gas to supply a portion of its nat gas requirements for the next decade or so, in the context of Brexit, GB can no longer be seen as a reliable transit route/supplier for natural gas.
    In the middle of the Cold War, West Germany imported gas from the Soviet Union. I think you might be over-thinking things.
    The Bloomberg article below spells out Britain's future gas risks, and Ireland will suffer if GB suffers - because of the lack of direct energy connectivity between Ireland and mainland Europe.
    In the event of disruption, many power stations can operate on alternative fuels.
    On the electricity front, Ireland's interconnection capacity is totally with GB/NI. NI's electricity generation capacity is in a dire condition
    Not really. It has come a long way in 15 years. Coolkeragh and Lisahally are new. Ballylumford has some modern units. Belfast Docks are getting a new power station. Northern Ireland has a huge amount of wind generation and small renewables (I'm sure you've heard). Decisions will be needed about Kilroot and the rest of Ballylumford.

    Moreover, Northern Ireland and Ireland operate as a single electricity market, despite having different currencies, tax regimes, etc.

    Wind has taken so much of the market from other generators, that there may be a move to pay the other operators just for maintaining capacity (for when there is no wind).
    Add to that is the exchange rate risk for exports of electric power to a country that has a falling currency.
    Not a problem. We already have that risk and it works fine. If sterling falls, then so what, we get cheap electricity? The market will adjust, especially given that the price of fuel (which would rise for UK operators if sterling dropped) is an important factor in the price of electricity. However, electricity is a capital-intensive industry with wind, nuclear and hydro having very low ongoing costs - the market will win, not exchange rates.
    Ireland needs several GW of direct power interconnection with mainland Europe (priced in EUR) to export wind surpluses and to import in times of low wind.
    Not necessarily. Up to 1 GW might be useful, but so would pumped storage.


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    #8
    Victor
    Registered Users Posts: 78,241 ✭✭✭✭Victor


    Tabnabs wrote: »
    The UK has significant gas reserves still, but is lacking in storage capability.
    If this were truly the case, they wouldn't be closing the Rough storage site.
    recedite wrote: »
    Its normal in the USA for landowners to get some money from mining or fracking on their land, and in mainland Europe windfarms pay a direct dividend to the local community.
    Irish landowners get paid for mining under their land also. The thing is, to date, gas has only been sourced offshore.
    Impetus wrote: »
    GB comes first, when the pressure arises.
    Fair enough, that's why we have reserves: https://binged.it/2t9KkRl and https://binged.it/2t9qKod I imagine all of those will have to become domestic reserves in a Brexit scenario.
    Impetus wrote: »
    The price of electricity in GB and the province of NI is priced in GBP. The price of electricity in the Eurozone is priced in EUR. The GBP has sunk since the Brexit vote in the international markets.
    As I said above, there is a functioning market, exchange rates aren't an issue. Your a wind generation company, you can either get no money in market A or something in market B. Whacha gonna do?
    Britain has declared war against the entire EU by leaving the confederation.
    No it hasn't.
    As a result the island has had an annus horribilis - between the Brexit result, murder in Manchester and London murders (not terrorism), its falling GBP forex rate, and the fire in the plastic coated skyscraper in London - of which there appears to be many similar buildings (including hospitals) on that island.
    I don't think you can blame murder and fire deaths on the prospect of Brexit.


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    #9
    recedite
    Closed Accounts Posts: 13,993 ✭✭✭✭recedite


    Impetus wrote: »
    The price of electricity in GB and the province of NI is priced in GBP. The price of electricity in the Eurozone is priced in EUR.
    Right, but how is the price of electricity flowing between the UK and Eurozone priced? I suspect that whichever currency is used, there will be a large amount of FX hedging written into the contract, so it won't really matter which is used.
    Impetus wrote: »
    Britain has declared war against the entire EU by leaving the confederation. As a result the island has had an annus horribilis - between the Brexit result, murder in Manchester and London murders (not terrorism), its falling GBP forex rate, and the fire in the plastic coated skyscraper in London
    Not quite war. Remember they are leaving the EU, not leaving Europe. And don't forget that the Brexit vote was taken at a time when Merkel was still facilitating mass unvetted migration into the EU from parts of the world where jihad is a way of life, and thousands of these migrants were camped in Calais where they were using any method at their disposal to get to the UK.

    Only a few days ago a Polish driver was killed there, and I see today the Irish Navy has been down to Libya to collect some more migrants. And the Irish based Libyan who stabbed people in London recently was using our CTA with the UK for traveling to and from England.

    So all in all, you can consider the Brexit vote as part of a long term British response to reduce terrorist related deaths, if anything.


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    #10
    recedite
    Closed Accounts Posts: 13,993 ✭✭✭✭recedite


    Victor wrote: »
    Irish landowners get paid for mining under their land also. The thing is, to date, gas has only been sourced offshore.
    AFAIK in Ireland when you own land, that ownership does not extend to any mines or minerals below the ground; the state claims ownership of these rights. In the USA it is different.


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