Fuel for Thought – Mar 9th

09 Mar, 2012

Chinese unconventional gas

The ability for China to ramp up its domestic unconventional gas production to displace import requirements is one of the key uncertainties impacting the global gas market over the next decade.  The environmental concerns that have troubled unconventional gas in Europe are unlikely to be such an issue in a centrally planned and resource hungry China.  But the pace of progress in developing China’s vast potential gas resource has been lethargic in comparison to the US.  This appears to be the result of geological issues, a lack of pipeline infrastructure and depressed domestic gas prices, as Interfax explored in a feature this week.

China’s commodity boom

The importance of China in driving commodity prices (let alone global growth) has been a key theme of this blog.  This is of particular relevance to the coal market, where elevated prices are supporting substantial investment in new production capacity in anticipation of Chinese demand growth.  China faces a difficult challenge reigning in inflation and transitioning away from the massive stimulus unleashed in the wake of the financial crisis.  It does not help that Chinese growth over the last 2 years has predominantly been driven by stimulus which has been funnelled into developing areas of over capacity.  Credit Suisse published some interesting research this week projecting an end to the global commodity boom as a result of a rebalancing of the Chinese economy. 

Can solar power the UK?

There has been much excitement around deployment of solar PV in the UK over the last few months.  This has in part been driven by striking reductions in the cost of PV technology which, while being a headache for DECC support scheme design, mean that solar now has somewhat more realistic prospects as a renewable energy source.  But excitement has also been driven by wildly optimistic government and solar industry claims as to UK solar resource potential.  Mark Lynas puts some basic numbers around the scale of PV potential here.

Picture of the week

A 48 tonne truck being hoisted up the alps to work on Groupement Marti Implenia’s hydroelectric plant at Nant de Drance, in the Swiss Alps. The Nant de Drance pumped-storage power plant, situated between two existing reservoirs in the Swiss/French border region between Martigny and Chamonix will generate 600 MW by utilising the water pressure resulting from around 300 meters of altitude differential.