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Spanish regulator highlights gas demand disagreement

22 Apr 2013 16:47:58 | esgm


A new report from Spanish energy regulator CNE shows a disagreement between its own view and that of the gas and power transmission system operators (TSOs) Enagas and REE, over how soon demand for gas from the electricity generation sector will recover.

The report, published on 17 April, shows that gas TSO Enagas is considerably more bullish about the outlook for the commodity than both the regulator and REE.

Demand for gas from the Spanish electricity generation sector has been in free fall for the last few years.

In terms of the existing generation pool, all three organisations - CNE, Enagas and REE - believe that combined-cycle gas turbine (CCGT)-related gas demand in 2013 will close slightly below the 83.59TWh consumed in 2012.

CNE and REE believe it will end 2014 lower still, at around 70TWh. Enagas on the other hand expects consumption will almost double by the end of 2014, to 154TWh.

By 2016, Enagas foresees demand at 161TWh, while REE and CNE see it closer to 121TWh.

Mixed views on coal decline

The report also laid out two scenarios for installed capacity within the wider Ordinary Regime generation fleet, that is conventional thermal generation and large-scale hydroelectric. One scenario is composed from the viewpoint of the CNE and the generators while the other represents the expectations of REE.

The biggest discrepancy concerns coal-fired generation. The regulator and generators believe Spain's current installed capacity of 10.93GW will reduce gradually to 10.45GW by 2016, a reduction of 475MW, or the equivalent of one large thermal generation plant.

REE envisages a drop five times that size that will reduce the fleet by 2.38GW to 8.55GW.

The CNE and generator view is that Spain's CCGT fleet - which currently stands at 25.29GW - will be unchanged until 2016.

REE instead sees an extra 15MW of capacity being added to the grid in 2014.

It is notable that neither side expects significant new CCGT build and this is backed by recent figures from Enagas showing that gas demand from electricity generation hit a new low in March, at just 3.65TWh, a drop of almost half compared with March 2012 and 75% down from March 2008.

In March 2013, Spain's CCGT fleet showed a load factor - the amount of time a plant spends generating expressed as a percentage of their potential maximum output - of just 6%, a new low.

Recession-related demand falls, coupled with increased use of coal, higher use of renewables and now bountiful hydroelectric stocks have all conspired to reduce gas's share of the generation mix. Rob Songer

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