Fracking and Biogas — Bulb Community

Fracking and Biogas

I've recently read that the first Fracking wells have been given planning permission over the summer.
With that in mind could you confirm Bulb's position on Fracking?
I've found the 'Green Gas Gurantee' in a previous post:

Our “Green Gas Guarantee” is a cast iron commitment that drives all our activity in the energy marketplace, our engagement with gas suppliers and what we think is a priority in terms of future gas usage in the UK:

We will continue to increase the proportion of our gas mix that comes from green sources (we’re currently at 10%)
We will work with green gas producers to encourage expansion and increase in output
We will invest in the development of new technologies to support green gas


But that doesn't explicitly exclude Fracked gas.

I also note that the first part of the guarantee says that you will "increase the proportion of our gas mix that comes from green sources". but it doesn't seem to have increased in the 2.5 years since that post was written (march 2016). and as far as I can work out you only started in 2015?

So what is the plan for increasing the proportion of Biogas? You're increasing gas prices by a third so if there's a time when Biogas is competitive, surely that time is now.

Regards

Comments

  • Hi @ben281 - Good Question. Bulb are firmly opposed to Fracking, we've spoken about it before on our Blog: https://bulb.co.uk/blog/bulb-stand-fracking-2

    We are trying to increase the percentage of green gas we source, but it's proven a bit of a problem when you see the growth we've achieved this year. The amount of green gas we've bought has greatly increased, but the percentage of each member's gas that is green has not yet gone up more than 10% - We're always on the lookout for new suppliers of biogas to source from.

    As for the price - If Natural Gas prices go up, especially due to shortages, the demand for other sources of gas also rises due to the more limited supply, so Biogas is not completely shielded from rises to Natural Gas prices - however, the more diverse sources we can get limits any price spikes across the industry if there's an issue with a different source.
  • Thanks for your reply Bill

    Yes I understand that your blog post says "To be clear: we're firmly opposed to fracking." but that is different to "we aren't going to use fracked gas". I've had enough dealings with companies to know that a company will say something on a blog post and then renege on it, and its perfectly possible to be against fracking whilst still using fracked gas. So I'm looking for something a little more concrete. Is it an issue of not being able to say where your gas comes from? If that's the case than please say, then we can have a conversation on that basis.

    Re Green Gas
    Yes I understand you have been expanding quickly so you are running to stand still, as it were, I just wanted confirmation that that is still something you are working towards. Some concrete details would be nice though.

    My point with prices increases is eg if wholesale gas is £1 kwh, biogas at £2 kwh might be a hard sell, and potential producers might not want to invest without guarantees (otherwise you could back out and they would be left selling at a loss). If on the other hand wholesale prices rise to £10 kwh, you then have an incentive to buy more biogas because its cheaper (you aren't subsidising the producers), and producers have an incentive to jump in with or without guarantees.
    I understand that just like electricity, gas is a market. But unlike electricity gas is storable, so supply doesn't have to match demand at any one instant, so long term biogas contracts can shield you much more from price swings. (there is nothing stopping you from entering into fixed price contracts with suppliers, sufficient to cover 100% of customer usage. Gas storage is something that already happens (increasing stocks is one of your explanations for current high prices) and some would be needed to cover the winter peak, but at that point you can offer completely fixed price green gas.
  • Hi again @ben281 - we have not ever purchased gas sourced from Fracking, and I can't see us starting to do this in future. Sorry if my first post wasn't clear enough on this.

    As for the Green gas, we're looking at what we can do. I've spoken with our Gas purchasing team and got a bit more information for you. Last year we bought about 15% of the green gas supply that was available in the UK, and this year it's been closer to 50%. Our overall aim for this is that the market responds to this bottom-up pressure and that more avenues of green gas supply start opening up, but at present our growth is significantly faster than the green gas industry's - as a result, it's unlikely we're going to be able to increase our percentage of green gas in the near future.

    What we've been working on more this year is increasing the amount of 3 year contracts we sign for gas supply. In the past we've done a lot more spot sales and 1 year contracts, but by increasing the amount of 3 year contracts we're showing these producers that we have a long term commitment to these supply points, which increases confidence that developing more green gas plants is a great investment, while also providing a better shield to any volatility in the gas market.

    In terms of fixed tariffs it's not something we're looking at offering. We want our prices to reflect the true cost of energy, and although that means it's resulted in rises this year, we'd want to be able to lower this as soon as the wholesale market lowers and we wouldn't be able to do that with fixed tariffs. We do want a stronger cushion to shield against rises though.
  • Thanks again

    "this year it's been closer to 50%." really?!? how do you compare to Ecotricity size wise? I thought they were much bigger, and they supply 12% biogas so would account for a larger share of biogas use. Or are you both monopolising biogas supplies between the 2 of you???
    Never the less you should be publicising this. As a company it shows what you're doing (and stops people like me nagging). Also I for one thought the industry was much larger and hoped one day to be buying 100% biogas. Also I don't mind writing to my MP etc. but it would be easier if the industry was saying what they wanted improving etc, that I could then point to.

    Ps I wasn't asking for fixed contracts per se, just pointing out that that would be a natural consequence of your input costs becoming fixed.
  • I don't have Ecotricity's exact numbers, Having a quick google they announced they were at 200,000 in May last year. They are trying to build a few of their own gas supplies though, so if these never got put up for sale in the wholesale market they wouldn't be included in the 'available amount' I mentioned before. Good Energy also invest in green gas too, but they're also quite a bit smaller than us.

    If you live in an area that could feasibly introduce green gas supplies writing your MP could well be productive. We try to give more info on this on our site, such as here: https://bulb.co.uk/fuelmix/ but our current tactic is on promoting growth of the industry by showing that the market does want renewables - as our growth has shown, and we hope that prompts investors to follow suit.
    ben281 said:


    Ps I wasn't asking for fixed contracts per se, just pointing out that that would be a natural consequence of your input costs becoming fixed.

    Fair point!
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