Published: 17 October 2023

Energy Hub – Powered by GET – October 2023


Monthly electricity stats

In September, 49% of electricity came from zero-carbon sources, peaking at 86% on 24 September at 1pm.  High levels of wind enabled us to achieve a new low carbon intensity record of 27g/kWh on 18 September at 2pm beating the previous record set earlier this year on 10 April of 33g/kWh. Gas was our largest source of fuel with 33% of electricity being generated by gas. Wind was our second largest contributor to electricity at 24.9%.  Peak demand was at 6:30pm on 21 September and, throughout the month, 21TWh of electricity was run through the network, enough to power 21 billion washing machine cycles.


The latest EC46 forecast is showing temperatures to be 3 degrees above average seasonal normal temperatures on Thursday, before dropping slightly over the weekend and then averaging above average seasonable norms for the foreseeable future. The drop in temperatures has been offset by the increased capacity in wind generation, which is due to peak tomorrow at nearly 50% above seasonable norms.

From late October and through November there looks to be more frequent low-pressure systems moving off the Atlantic – which should bring rainfall to more average values. There is no signal for a cold start to winter in Western Europe and Britain, with a continuation from November of mild but unsettled conditions off the Atlantic. December looks similar, forecasts are predicting mild weather and some fronts with rain and wind over the country from the southwest or west, clearing to spells of sunshine and showers.

Therefore, weather looks positive from a windy and mild forecast, meaning reductions in LDZ demand ( Domestic central heating : Local distribution zone) due to mild temperatures and increased generation from Renewable due to unsettled windy conditions, alleviating some of the pressure on gas fire power stations.  Every month so far this year, apart from July, the CET (Central England Temperature) has been above average, June was the warmest on record in the series that goes back to 1694. With regards to UK mean temperatures, July was below average, while March and April were marginally below. All other months have been above average so far. June with an anomaly of +2.5C and February with +1.7C were the months with largest departures above average.


Gas inventories across the European Union and the UK amounted to 1,114 terawatt-hours (TWh), breaking the previous record on Oct. 27, 2019, when it reached 1,102 TWh, according to data from the European gas operator association, Gas Infrastructure Europe (GIE). European underground gas storage (UGS) facilities are now 97.89% full, far exceeding the EU’s target of 90% by Nov 1. EU nations, which utilize around 400 billion cubic meters of gas annually, have a natural gas storage capacity of 110 billion cubic meters.

Currently, Romania and Spain have reached full storage capacity, while Portugal and Poland have reached 99%, and Slovakia, Germany, and the Czech Republic have a capacity of 98%. Foreign traders have increased the volume of natural gas in Ukrainian underground storage to 2.4 billion cubic meters (bcm) as of Oct. 16 from 2.2 bcm as of Oct. 6, the Ukrainian energy ministry said on Monday. “This activity demonstrates that Ukraine’s gas infrastructure is fully integrated into the European one,” the ministry said in a statement.  Ukraine’s biggest oil and gas firm Naftogaz has said that foreign customers could use more than 10 bcm of storage of the country’s around 30 bcm capacity, mostly in the country’s west, which is far from the front lines of the war with Russia. Earlier this year European gas traders began storing natural gas in Ukraine to take advantage of lower prices and available capacity there, regardless of the risks from the war.

Europe’s gas demand, measured in consumption in the EU and the UK, has trended lower for most of the past year amid energy savings measures, high prices last year and demand destruction from slowing industrial activity. Demand for natural gas remained near the bottom of the five-year seasonal levels in August, which has helped to achieve these high levels of storage ahead of the winter season.


The UK has six LNG cargoes inbound in the next four weeks with plenty more coming into the continent in coming weeks. With low demand and healthy renewable generation this could lead to prompt prices easing off. LNG prices in the UK and EU have been very volatile over this last week, we’ve seen 20% shifts in prices, whereas the Asian market has held steady.

News last week about possible further strikes at Chevron’s LNG facilities in Australia sent bullish signals to the market and led to a mini rally on prices, since Monday prices have eased back off. We wait and see on Thursday if they are going to go ahead and start the strikes again. In the latest update on the situation, reports that the talks had prompted “angry comments” from Chevron, which has said the workers were being unreasonable. Unnamed source suggested the union was not going to make concessions and Chevron would have to change its position on several issues to avoid new strikes. “The union’s decision to ignore the recommendation … while discussions are continuing, it is very concerning, unreasonable and undermines the considerable progress made prior to Chevron requesting the Commission’s assistance last week,” a Chevron spokesperson said this week.

The Gorgon project has a capacity of 15.6 million tons of liquefied natural gas annually, while the Wheatstone facility can produce 8.9 million tons annually. Together, the two account for over 5% of global LNG production capacity, and any disruption or even the suggestion of disruption of supply immediately affects global LNG prices. The strike actions will have now been priced into the curve and therefore prices are now reflecting the workers going on strike. As with the last strike in September, we did not see any reductions to shipments, price direction will be determined by the length of the strikes and the reduction in production. Currently inventories are looking healthy and demand is low, if there is any pressure on demand, either here or over in Asia then we may well see prices rally higher and a bullish market.


The Balticconnector pipeline sustained a sharp drop in pressure at 2 a.m. local time on the 8th Oct. The unusual drop in pressure indicated that the offshore pipeline was damaged, and gas had leaked. No potential causes for the outage could be ruled out for the time being, including sabotage, a spokesperson for Estonian gas system operator Elering said on Monday. Repairing the Balticconnector pipeline could take months or more if a puncture is confirmed, Gasgrid said. The pipeline is jointly operated by Estonian electricity and gas system operator Elering and Finnish gas transmission system operator Gasgrid, each of which own a 50% stake. It can transport up to 7.2 million cubic metres of gas per day (mcm/day), or 80 gigawatt hours (GWh) per day, in either direction. The pipeline opened in December 2019 to help integrate gas markets in the region, giving Finland and the Baltic nations of Estonia, Latvia and Lithuania more flexibility of supply.

This in itself is not a big supply issue as both countries can get gas and do get gas from other sources, Storage, LNG and other pipelines. The worry is the cause of the leak, explosives have been ruled out, unlike Nord Stream pipeline which we know was damaged by an explosion, initial investigation point to mechanical issues, whether sabotage or an innocent accident. On rare occasions it’s not unheard of that boat’s anchors have got court on these pipelines, pulled them out of position slightly and this then causes them to rupture and leak gas. Both Estonia and Finland are investigating satellite images to determine the cause of the damage. One needs to remember the Nord stream pipeline was not EU and more importantly NATO critical infrastructure, whereas Finland and Estonia are both EU members and the Balticconnetor is classified as critical infrastructure, therefore if it transpires that there has been sabotage, then this is a direct attack on NATO critical infrastructure. Coincidentally, this incident happened exactly a year after the Nord stream pipeline was damaged!

Italy’s Eni will fast-track the development of the Geng North deepwater gas field off the Indonesian coast, with first production planned for 2027, noting the field contains an estimated 5 trillion cubic feet of wet gas. News of the discovery of the field broke in early October. At the time, the company said it would study its options for fast-tracking the development of the field. “The ongoing exploration campaign, along with the recent acquisitions, is in line with Eni’s energy transition strategy to progressively shift its portfolio mix towards gas and LNG, targeting 60% in 2030, and to increase its LNG equity portfolio,” the company said. The Geng North field is located next to already operational wells, in which Eni recently took over the stakes from Chevron. The deal was announced in July and involved three majority stakes in fields located in the same basin as Geng North—the Kutei Basin. “Thanks to its location and significant size, the discovery has the potential to contribute substantially to the creation of a new [gas] production hub,” the supermajor said.

Geopolitical drives

On Sunday, fears took hold of the market of a wider escalation of conflict in the Middle East, with the Israeli Defence Forces launched an airstrike on Syria’s Aleppo airport, and Hezbollah appearing to have stepped up its campaign against the Israelis from southern Lebanon, allegedly on orders from Iran. As Tel Aviv prepares for a ground offensive in Gaza, markets are concerned of further escalation on a much wider playing field. Right now is an especially vulnerable time for gas prices, particularly in Europe, as the reignition of violence between Israel and Hamas has prompted the shutdown of one large gas field offshore Israel, Tamar, sparking fear of supply disruptions. Gas from Tamar was sent to Egypt, where it was liquefied and sold on global markets. Tamar, along with Leviathan and gas fields in Egypt made the foundation of plans for turning the East Mediterranean into a new global gas hub, especially after the European Union lost its access to most Russian gas.

The worry would be all out conflict in the middle east, with Syria and Iran getting involved. Hopefully with the presidential visit tomorrow which will send a strong signal to the likes of Syria and Iran that America is in full support of Israel, this should make them think twice before getting further involved and mitigate the risk of all out conflict in the area. Biden’s trip, however, is a balancing act between showing support for Israel’s war on Hamas and trying to rally Arab states to help head off a wider regional war, after Iran pledged “preemptive action” from the “resistance front” of its allies which include the Hezbollah movement in Lebanon.

The U.S. government has been seeking ways to increase the flow of oil to world markets to alleviate high prices. Since 2019, the U.S. has sanctioned oil exports from Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC), to punish Maduro’s government following elections in 2018 that Washington considered a sham. Venezuela’s government and opposition are set to resume long-suspended talks today which President Nicolas Maduro said would benefit the 2024 election, a move that could lead to Washington easing sanctions, multiple sources said. But any real oil output increase by Venezuela will take time due to lack of recent investments.

Meanwhile, the CEO of Saudi Arabia’s Saudi Aramco said on Tuesday the company is able to ramp up oil production within weeks if needed, as global consumption is set to rise to a fresh record by year-end. OPEC+, which comprises OPEC countries and leading allies including Russia, has been cutting output since last year in what it says is preemptive action to maintain market stability.


As we have stated many times since the reduction in Russian piped gas to Europe, the system remains tight, meaning any drop in supplies or unexpected increase in demand will have an exaggerated effect on prices. Over the last couple of days, due to fall in temperature, news of the Balticconnector, strike action in Australia and the conflict in Israel,  prices have been very volatile. Electricity has traded on the N2EX day ahead in the last four days from lows of 4p/kWh to highs of over 11p/kWh. Essentially here in the UK and Europe we are being protected by the full force of these bullish signals from the high storage inventories, low demands and healthy renewable generation.

At this time, it’s hard to predict where prices may go over the next couple of days, weeks. Prompt trading is still offering discounts to forward hedging strategies but being completely open to market drives at this time would be seen as very high risk and unwise.

If you would like a more in-depth discussion on any of the points raised, please don’t hesitate to get in contact on 02476308830 or email on

Victor Levison.