You may vaguely remember recent headlines based on the fact (to the extent that anything can be accepted as a fact any more) that "Germany has 99 days of gas storage capacity, France has 122 days, while Britain has just 15 days".
The Remittance Man* explains why this is complete and utter scaremongering tosh.
* Who has accepted the post of Defence Minister.
Flabby
6 hours ago
6 comments:
It isn't entirely tosh, although he has a point I hadn't grasped. (Reasons over in his comments).
From Business and Enterprise Select Committee: Eleventh Report of Session 2007-08:
"Gas storage
12. The Government has not responded quickly enough to the UK’s increasing, and entirely predictable, gas import dependency by encouraging investment in storage.
This is an issue our predecessor Committee raised in its 2002 and 2005 Reports on security of supply and fuel prices. Significant additional storage, beyond that currently planned, is needed to reduce volatility in the wholesale gas price, which is otherwise likely to increase as the UK becomes increasingly dependent on gas imports.
It is now an issue of national importance and should be a high priority in domestic energy policy. (Paragraph 29)"
Anon, that's a good find, but why should our government be "encouraging investment in storage", remembering always that storage does not reduce the price, it merely reduces the volatility in the price, while adding to the overall average price?
If big businesses see a way of arbitraging volatility against price, i.e. if consumers are prepared to pay a slightly higher average price for a lower volatility, then I am sure that big businesses would do it, if they could get the planning permission for appropriate storage facilities.
Let's assume the evil Russkies know that we have three months' worth of gas stored away. They could still turn off the taps for three months and let them empty. It is then simply a game of chicken as to whether they run out of money before we run out of gas.
Or, we could build storage for six months' worth of gas. The evil Russkies would then measure how full they were, and the fuller they got, the more they'd ramp up the price. So we'd end up with half our hugely expensive storage capacity completely empty.
Best to leave this to the markets. Or switch to coal or nuclear electricty.
Nice link, but that's the first time I've seen one of those Prim Aunt/Reichsfuhrer warnings.
The Remittance man: "Some readers of this blog have contacted Google because they believe this blog's content is objectionable."
Well done!
I've got an ASBO! I've got and ASBO! Nah! Nah! Neenah nah!
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