1. A New Dash for Gas? Future Energy Strategies 29 th May 2012 at Allen & Overy David Odling, Energy Policy Manager Oil & Gas UK

2. UK Gas Production and Consumption for 50 years, 1970 - 2020 Sources: DECC, National Grid and Oil & Gas UK 2

3. Power Station Closures Coming 12 GW of oil and coal by end 2015 (LCPD) 9.5 GW of nuclear by 2023/5 (old age) 18.5 GW of coal by 2023/5 (IED +old age – all except Drax B will be 50 years old or more by 2024) 18 GW of pre-2002 gas by 2023 (IED) = a possible total of 58 GW by mid-2020s!! (peak winter demand currently ~60 GW) And we are to electrify more of the economy 3

4. Power Stations: New Builds ~10 GW of new CCGTs in 4 yrs, 2009-12 Another 8 GW consented for completion during 2013-16 (ref National Grids 7 year statement) New nuclear PSs by 2025: our best guess = only Hinkley Point C, i.e. 3.2 GW New coal needs CCS, so not before 2025 Current wind capacity = ~4.5 GW Even if (a very big if) 25-30 GW of wind by 2025, a large gap in baseload and back-up 4

5. Power Stations: mind the gap! Only one technology can fill the large gap within the timescale = gas fired power Mostly CCGTs, maybe some OCGTs (back-up) Low risk, high optionality And, if CCS works for coal, will work for gas But main use of gas is for heat, not power What happens to total gas demand is crucial So, a new dash for gas fired power?? = very likely, but no new dash for gas!! 5

6. After 40+ Years of Gas Production, whats the Future for the UK Continental Shelf? 6