Linked In Logica Utilities Outlook 040210
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Transcript of Linked In Logica Utilities Outlook 040210
By Shahzad ParachaBy Shahzad Paracha
Power Generation : Gas & Electricity
Regional & UK Outlook 2010-2020 & Opportunities
Regional Outlook
2
UK Outlook – Investments by Industry
3
UK Distributors & Margins Forecasts
4
Investments in Renewables & Impact on Energy Prices (UK)
5
£200 Bln Industry Investments & £ 100 Bln in Wind (Mostly) from 2010-2020 to meet:
Electricity Generation Capacity Mix - Nuclear & Coal (40%), Gas fired Plants (30%) & Alternative Energy (30%)
Investment Support:
Tax Payers, high Energy Prices (£200 per customer), Stable carbon Price mechanism, Government Subsidies,
incentives & Tax Breaks
Investment in line with:
Efficient & Low cost to Serve Energy Mix for B2B & B2C
For sustainable Gas Supply security & reduced dependency
Part of CERT - 34% by 2020
2009 Successful Pilot in US delivered 6% rise in prices - $150 per household
6 2020 Post Round 3 - Offshore Vs Onshore Wind Capacity Split - 50:50
6000 Turbines in Pipeline @ 2.5 per day
UK Dual Fuel Wholesale Costs & Projected Margins
Dual Fuel Projected Gross Margins 2010 - 2012
0
50
100
150
200
250
2008 2009 2010F 2011F 2012F
Electricity Gas Dual Fuel
Demand Growth:
Driver – Nuclear & Gas fired Plants
2 – 4% Growth - Residential & Industrial Segments
Rise in G.M’s 2010 – 2012: High Gas Prices – Over-suppy to meet demand e.g. LNG, GTL
Electricity Prices - Moderate Rise & Decline in Futures Market i.e.
Cheap hedging costs
Hedging Strategies
Electricity costs under different hedging strategies
Gas costs under different hedging strategies
Suppliers - 12 months Hedge costs to rise potentially but will Cost Less as in Past for 2010-2012
Wholesale Prices & Costs
Wholesale electricity forward prices Vs 18mth hedge
Wholesale gas forward prices Vs 18mth hedge
2010-2012 – Overall Rise in Gross Margins with decline in demand & Futures Markethence CHEAP Wholesale Costs
30% Regional LNG Demand Growth by 2020
EU: 10% & BRIC’s: 50%
Gas Supplier Qatar Will meet 20% of UK Gas demand from 2011
UK - 2nd Largest Gas Markets in EU
1999 – 2009 Average demand growth 6%
Gas Fired Power Generation to drive Gas demand till 2020
UK Gas Supply 2016 Proportion:
Domestic production 20%, Imports 80% (Norway 35%, LNG 35%, Continent 10%)
Current Gas Imports 40%
UK Supply Cover Storage
15 days Vs 100 in France & SC/AC only 4%
Investments In Gas Storage :
From 2010-2020 : 14 bcm (SC/AC - 11%)
• Will lead Supply Cover Storage – 45 days
10
Regional & UK Gas Demand & Storage
AnnualConsumption (bcm)
Storage Capacity (bcm)
Storage capacity/ Annual consumption (%)
UK 99 4 4
Germany 101 9 19
Italy 86 13 15
France 46 11 25