The EIA reported another build in storage today, though the supply increase was 24% lower than the five-year average for this week due to Hurricanes Gustav and Ike. We will have at least one more week of slow growth reported next Thursday from Ike production, leaving many analysts to predict that this year’s winter storage peak will be closer to average than last year’s record. Since natural gas consumption has increased these last few years, this development is somewhat bullish — especially given the weak dollar. But natural gas supplies remain robust for the winter unless a more intense hurricane slams into the Gulf producing region.
Crude oil supplies continue to look questionable as the recovery from Ike is very slow. The Mineral Management Survey reported that only 7% of Gulf oil production has been restored. This opens the prospect of another 6 million barrel fall in inventories to ~185 million barrels and puts the low levels at the beginning of the year within striking distance.
The other development I’d like to explore today is an article on a recent report projecting extremely swift growth for the solar industry. Nomura Securities’ puts together a Top 10 ranking of solar producers each year, with this year marked by a rapid rise of Chinese manufacturers as Japanese firms slow production on the scarcity of poly-silicon feedstock. Their report cites massive expansion plans by firms such as Sharp and Showa Shell Solar to levels greater than 1 GW each in 2010 and 2011, respectively. They predict rapid solar production growth ~60% per year to continue for several years, making the solar market of 2013 a 20 GW market similar to the wind power market of 2007. If they are right, solar and wind can significantly chip away at the electricity market share of fossil fuel competitors.
But such expansion will require a more competitive price for solar to come to fruition. The report predicts solar price reductions partly due to a continued market shift within the solar industry to thin-film panels which require less poly-silicon, from thin-film’s current ~10% share to ~50% by 2013. I’ll definitely be rooting for such quick growth, as they would help make our dreams of climate stability much more achievable.
Onwards in the sustainable energy transition-
Tags: Hurricane Ike, natural gas prices, Oil, solar power