Adam Smith Institute Lecture The Future of Utilities Overcomingg Strategic g Challenges g for UK Utilities Sam Laidlaw, CEO, Centrica 17 March 2009
UKs dependence on imports is increasing Forecast 140 120 100 num Low Production Case 2008 BCM per ann 80 High Production Range 2007 UK supply Gap UK Demand 2007 60 UK Demand 2008 40 20 0 1998 2002…
Competitive markets delivered for UK consumers 5 year average domestic gas prices for medium consumers in the EU 8.00 7.00 6.00 ence per kWh h 5.00 EU 15 average (including taxes) Tax Component 4.00 Price (excl tax)…
Significant new investment already in place Vesterled pipeline Winter 2008 (to date): Norway 14 79% mtpd Langeled pipeline Capacity % Utilisation N Norway mtpd Rates 27 82% mtpd BBL pipeline Netherlands 14 63% Milford…
UK needs new storage 120 European Storage levels 100 80 Average 60 days dem and 40 20 0 ly ce y K s an nd Ita U an m la Fr er er G h et N 6
We have a long history in LNG What a difference 50 years make British Gas Canvey Island LNG British Gas Isle of Grain LNG Terminal January 1959: Terminal November 2008: A World First: Methane Pioneer A British First: Al Khuwair…
UK needs 234bn of energy investment - 165bn in power 90 Peak Demand 85 Plus 20% Reserve Margin 80 75 GW 70 65 60 55 50 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 E i ti generation Existing ti…
Electricity plant closures at high levels up to 2015 Plant Additions 30,000 25 000 25,000 20,000 15,000 10,000 MW 5,000 0 -5,000 -10,000 Plant Closures -15,000 -20,000 2008 2009 2010 2011 2012 2013 2014 2015…
Offshore wind economic with 2 ROCs Changes in Windfarm Costs 200 150 / MWh 100 50 0 Nov-05 Capex Grid Costs Adverse Cost of Feb-09 Costs Forex Capital 10
What does micro- generation mean to customers Power Heat and Power photovoltaic (PV) wind turbine stirling engine Heat solid oxide fuel cells heat pumps biomass solar hot water 11
Conclusions 1. UK energy industry facing unprecedented challenges to secu secure e new e sou sources ces o of gas a and d replace ep ace age ageing g generation fleet 2 Market has delivered and will continue to do so…