Wednesday
Nov062013
by 
Bishop Hill
Bishop Hill Quote of the day, heavy industry wipeout edition
Nov 6, 2013 Energy: gas Energy: grid ;)
I don't yet believe there is any understanding in this country of the crisis we are facing in terms of the energy supply...we will not have energy intensive sectors in this country twenty years from now unless we do something about it.
Tom Crotty, director of INEOS UK, in evidence to the House of Lords Economic Affairs Committee.
Reader Comments (50)
Commented on unthreaded:
It's much worse than we thought. Power shortages more likely this winter. A lot of buck-passing going on between DECC, National Grid, Ofgem and the big 6 energy companies (who are all in on the wind farm scam, which is a prime contributer to the energy shortage). Complacency springs to mind.
http://www.telegraph.co.uk/finance/newsbysector/energy/10428950/Power-crisis-risk-worse-than-feared-this-winter-SSE-warns.html
I think the following quotes sum it up:
Getting rid of industry is considered to be a feature, not a bug, by progressive environmentalists. It is part of their plan to assuage their guilt over thousands of years of inflicting oppressive western thought on the planet.
social democracy has problems dealing with 'difficult' issues. The temptation is always to fudge, not to create too many outright losers who might become lost votes. This was particularly evident in 17 years of Labour inaction, when something could/should have been done, but Labour had green and syndicalist votes it did not want to put at risk by ordering more nuclear or coal powered energy generation plants. As politicians become hyper sensitive to votes, so engaging with government on a long term basis is less attractive for 'capitalists'. No one would mind committing the money for a 10 year construction project and then a 35 year plant life, if the costs and returns were clear: "put up xxbillion and by year 12 you'll be getting 5% on that capital for the next xx years". Easy. But now we're in a world where even if you can get the government to thus commit, you never know what the next government is going to do, how it might change the deal in some way to soothe whichever bit of its constituency is whining at any given moment.
Getting the French and Chinese to cough up for buildig the latest nuclear plant might be perceived as a bit of a triumph. It might also be perceived as plenty of potential investors and constructors being well aware that there are about 178 other countries in the world, and a number of them are much better prospects for long term infrastructure projects than the UK.
Ignorant and unethical politicians with no engineering understanding who put their own wallets before their 'service' to the country are the problem. Industry and those in energy poverty will be the losers with deaths from cold in the thousands every month from now on through the winter. In UK, in March 2013 alone, deaths in energy poverty from cold were more than three times the annual deaths on the roads. Can you imagine what an uproar there would have been if 5000 had died on the roads in March? Yet, not a single question in Parliament or House of Lords on deaths due to energy poverty; none of them care.
Miliband => Huhne => Davey - modern day energy luddites!
"Getting rid of industry is considered to be a feature, not a bug," rxc.
Yes, and not just by progressive environmentalists. Fear and loathing of medium to heavy industry is an ongoing theme in a large swathe of the political and public sector. They think that dirty, scary industries are dinosaurs left over from the last century. Who needs all that? It hit its peak with Blair's policy to get 50 of kids into university. It didn't matter what they studied but they'd surely get better careers than those who worked in factories. Which is why we have a lot of unemployed media studies graduates, businesses are employing skilled, enthusiastic workers from abroad and we've a permanent trade deficit.
Those who want us to get rid of heavy industry, pushing CO2 production off-shore, are hypocrites.
There is no significant CO2-AGW. There is no CO2 problem: it will probably stabilise at ~450 ppmV.
End of UK Smelting
That's about right for current politics. 2 years after something has collapsed they start to say "Perhaps we should save it...?"
Nov 6, 2013 at 8:07 AM | Phillip Bratby: "Power shortages more likely this winter".
Richard North disagrees.
Jeremy Nicholson of the Energy Intensive Users Group has been warning of this for years. To no avail.
http://www.eiug.org.uk/press/index.htm
Looking at the EIUG press releases, I see Peter Hain was Energy Minister back in 2001. No wonder we are in a mess.
Labour has always had to rely on keeping a motley assortment of interests happy because its natural constituency has never been big enough to guarantee a UK majority. There have always been more workers who have voted Tory than there have been "bourgeoisie" that voted Labour. With rare exceptions like 1945 and 1997 (both of which elections were a reaction to what had gone before rather than a vote of confidence in the Left) Scottish independence would be the death-knell of Labour in England.
Now that the Tories have been bullied into moving to the left Labour is even more vulnerable though paradoxically they could well win in 2015 since they appear to some people indistinguishable from their rivals. If they do, I'm prepared to lay money it will be the last election they win. Ever.
On the substantive point, Crotty is right and sooner or later (hopefully sooner) the eco-warriors will realise that it is themselves they are shooting in the foot as well as the rest of us.
I was reminded yesterday of the report some years ago of a couple who had chosen not to have children because that meant that they could still fly off to Spain or wherever for holidays and keep an eye on their "carbon footprint". (Just how arrogant and egotistical can you get?) In the light of recent events, what are they going to do when there is no aluminium to build the plane?
Robin: As the margins between supply and demand get less every winter, the likelihood must increase. Whether all the STOR and demand reduction actions can prevent blackouts, well we will have to wait and see. If we have a prolonged cold spell, how long can STOR operate, noting that the ST stand for short term?
Interesting video (so far). A very important point was made: Cuadrilla's PR is *woeful*.
Robin Guenier
I'm surprised at North of all people apparently approving of the idea of demand management.
The option has existed for many years in the UK and in France (I can't speak for anywhere else) of a reduced rate tariff that allows for things like night storage heaters or only using the washing machine and similar appliances during agreed off-peak times. I'm not sure that having some centralised control room determining when I am allowed to heat my lounge or cook my dinner or watch my television or even how many lights I am allowed to have on at once (and I believe all these things are at least theoretically possible with smart meters) is compatible with a free society.
Perhaps I have misunderstood. I hope so.
Skeptics should consider being careful not to drift over the line between "Concerned for the common good" regarding power supply and "Cheering for the bad" to get what is wanted regarding climate policy.
That puts us in the same boat as the AGW fanatics, who see every weather event as proof of their climate apocalypse.
Robin/Phillip
I often agree with Richard North, who is a thoughtful chap, but it is the narrowing of the gap between supply and demand that worries me. It doesn't need much to go wrong, and how many STOR units would be needed if a large power station went off-line, say during a cold high-pressure spell with no wind? There would a lot of diesel tanks needing constant refilling!
Part of the Lefts constituency sees 'industry' as dirty dangerous oppressive, capitalisms cannon-fodder etc, why can't 'our kids' go to university and have cushy white collar jobs too, etc etc etc. Except it ignores - surprise surprise - realities like the Ineos workers on Clydeside being on £55K a year - is that not decent money? Would a young man be better advised to get himself in there, or do a media studies degree? And of course, if the 'Progressives' get their way, in a few years time that choice won't be there. Its ever been the case that skilled workers do pretty well, compared to clerical workers. And , with the 50% of people going to university what we'll see is that people who might have been skilled workers become graduate clerical workers - the kind of job 20 years ago which might have demanded A levels (or less) will soon require a degree. But of course is energy 'policy' hahaha continues on its present course, there'll be no option for the bright and young except to go to university. And if education policy (I can't even bring myself to laugh) doesn't change, I don't see where the cohort of technically skilled/able people is coming from in the UK in a few years time.
The very fact we've even come to this point - of discussing whether the nations energy strategy is facing outright catastrophe, inconvenience or merely 'a close shave', says it all. Our energy policy is being driven by GROSS incompetence from multiple political influences.
Will those people (who imo are guilty of the most reckless conduct in public office) be held to account? Ha ha. Take a wild guess....
Mike Jackson: I don't think he approves. He just thinks, like Booker, that power outages are unlikely because of STOR and "demand reduction", daft though these "solutions" might be. Here's Booker's conclusion (from this article):
My personal suspicion is that Phillip and James are probably right that STOR isn't likely to be a real solution anyway."I don't yet believe there is any understanding in this country of the crisis we are facing in terms of the energy supply.."
I don't yet believe there is any understanding by the public of just how expensive energy is going to become - in large part due to the deliberate policy by politicians to make it expensive. Davey tells us that the Hinkley Point deal to pay twice the going rate for nuclear energy will be seen as cheap a few years into the future. That comment, plus the phasing out of cheaper fossil fuels, reluctance to frack together with the known extra cost of "renewables", should tell us that costs are going to rise significantly over the next few years. So far the politicos, aided by feeble "investigative" journalism, are winning the propaganda war by focussing the blame on the evil energy companies. As more and more people are unable to afford energy, I am not sure how long the politicians will be able to carry on getting away with it.
Tom Crotty is right but perhaps doesn't realise that this is all part of the grand plan. If we rid ourselves of all the energy-intensive industry in the UK then the risk of black-outs is reduced and CO2 emissions are vastly curtailed (or should I say exported elsewhere?). Of course, the grand plan will result in economic disaster for the UK but the likes of Ed Davey won't be too troubled by that as long as the zero emission target is achieved. I used to think politicians are idiots but now I know they are (apart from one or two exceptions).
@mike
" I'm not sure that having some centralised control room determining when I am allowed to heat my lounge or cook my dinner or watch my television or even how many lights I am allowed to have on at once (and I believe all these things are at least theoretically possible with smart meters) is compatible with a free society.
Perhaps I have misunderstood. I hope so."
Given the recent experience in the US with the promise that "If you like your healthcare, you can keep it", I would predict that something similar would occur with regard to smart meters that control demand. "If you like your level of comfort, you will be able to keep it", as long as the smart people controlling the smart meters agree with your definition of an adequate level of comfort. If they think that your comfort is inappropriate, they WILL turn off all the devices they consider extraneous, especially if they think that YOUR level of energy consumption is "excessive". And, of course, once politicians have this sort of power, who believes that they will not use it to deal with any perceived enemies who pose a threat?
Mike Jackson: You talk about the UK and France having reduced rate tariffs (and I can't speak for France), but I guess you're talking about what used to be called 'Economy 7'. Well, I signed up for that donkey's years ago and it worked fine in those days. But if you care to check your electricity bills lately, the suppliers (BG in my case) have been steadily eroding the differences in the tariff (with complicated rate bands) until, last year, it was more expensive to have the overnight rate (ie: two rates) than a single rate. I changed back to single rate!
Does anyone know what STOR providers get paid? I don't imagine they've provided all that kit just in the hope that it will get called on occasionally...
British gas has recently removed the initial-use-high-charge rate, and it's gone back to the standing charge....just a mention.
" If we have a prolonged cold spell, how long can STOR operate, noting that the ST stand for short term"
Short term because of high price, which also includes demand-reduction-by-disconnection. There are however large installations, both operating and under construction, that are available full-time, and at high cost.
In the long term, demand reduction is the aim, not generator construction.
It isn't an inability to plan, it's an inability, allied with disinterest, to build more generation capacity.
It's all getting more expensive, and nobody wants to pay more. Bearing in mind that the UK has one of the lowest energy costs in the EU.
http://www.nationalgrid.com/uk/Electricity/AdditionalMeasures/
http://www.nationalgrid.com/NR/rdonlyres/0FBC5AF2-1280-4D27-B547-82616A865345/62865/Newbalancingtools.pdf
http://www.electricitystorage.co.uk/
Given the lack of reliable power, it's just as well that we've got rid of our heavy industry. Maybe that will allow us enough power to keep our lights on...
'Bearing in mind that the UK has one of the lowest energy costs in the EU.'
Has someone seen an opportunity here - are we being 'harmonised'?
EU aims for single market for gas and electricity by 2014:
http://ec.europa.eu/energy/gas_electricity/index_en.htm
No problem ... we just pass legislation to ensure all the nail technicians, hairdressers and beauticians (the backbone of our service industry based economy) use LED lighting and solar panels.
Who needs aluminium, steel, glass or complex chemicals anway? Let them slink off to Asia and gather their profits under another flag. Using coal power, cheap labour and lax, or non-existent environmental regulations.
Next?
Fracking would bring cheaper energy
BUT Big Oil like Shell & BP might try to stop it
- They wouldn't want new cheap fuel competing & threatening the high prices they get for the supplies Big Oil already own.
.. Fracking needs to be setup in a competitive way so that vested interests can't repress it
Yesterday the cabinet for Suffolk County Council considered a power station on Eye airfield. Its purpose is obviously STOR, and it's... wait for it... Open Cycle Gas Turbine. Because it's getting loads of extra subsidy, it can afford to waste gas and the site chosen has limited water resources so it can't be retrofitted to CCGT standard (or that was what I was told when I queried that option).
The cabinet memer who was taking the questions from an irate UKIP team was well briefed -- I know because I did it with no way that the idiocy of the proposal could be ignored -- and before the formal bit he admitted that all governments' energy policy had been foolish for twenty years. I told him that there was a simple phrase that would begin to address the problem. Vote UKIP.
He won't though. They'll all go on defending the parties that have got us into this mess.They'll go on voting the party line until the lights go out, then they'll come over all 'no one warned us'. They'll be lying, because I warned them, I spelled out what was going on in an enormous email that was cross-posted to every Suffolk county councillor. They can't say they don't know.*
JF
*Well, they can and probably will, but they'll be lying.
@Julian Flood
...Yesterday the cabinet for Suffolk County Council considered a power station on Eye airfield. Its purpose is obviously STOR, and it's... wait for it... Open Cycle Gas Turbine...
You may be interested in the retrofitting of Corby, which used to have CCGT with ..wait for it...OCGT.
Corby Announcement
I suspect that, with wind intermittency increasing, spot prices for short-term/immediate power are going to be high, and a lot of our gas load-following plant is being converted to quick-response OCGT. Means that there will be less plant to service base load.
But hey, there is no central planning in a market-driven power provision process. So really, no one can tell if we're going to have difficulty providing power. Because there ain't no real central strategy - just throw money at companies and hope they produce a balanced supply structure...
Demand Side Reduction sounds like a smarter form of targeted blackouts. Storage heaters and white meters are one category, but I assume you can't ask manufacturing industries to schedule production based on forecast wind speed. Just how much margin comes from voluntary power reduction during a windless, winter high pressure system? How long can this margin be maintained during a week long cold spell?
"Getting rid of industry is considered to be a feature, not a bug, by progressive environmentalists. It is part of their plan to assuage their guilt over thousands of years of inflicting oppressive western thought on the planet"
So the west exports all it's "oppressive" thought to China, which now has so much pollution it's become a serious health risk, and is even affecting their ability to keep watch on the population!
http://news.yahoo.com/china-close-schools-stop-outdoor-activities-during-heavy-110323598.html
http://www.dailymail.co.uk/news/article-2488075/Chinese-smog-terror-risk-Pollution-bad-security-cameras-sensitive-sites-longer-film-haze.html
Dodgy Geezer wrote:
quote
You may be interested in the retrofitting of Corby, which used to have CCGT with ..wait for it...OCGT.
unquote
Ye! Gods!
I joined UKIP to stop myself shouting at the TV and the computer monitor. It's not working.
JF.
@ Julian Flood
I joined UKIP to stop myself shouting at the TV and the computer monitor. It's not working...
I just got rid of the TV.... :)
I think part of the political risk for investors is that they can see that the decarbonisation targets set by succeeding governments cannot be met. UK govt is attempting the impossible. Would you invest in such a project?
@dave ward:
"So the west exports all it's "oppressive" thought to China, which now has so much pollution it's become a serious health risk, and is even affecting their ability to keep watch on the population!"
The West has soooo much to feel guilty about, having exported both evil capitalism and communism to China, where that ancient culture picked out the "best " parts of each meme to become rich.
I am - I'm astonished to admit - hoping for 'the worst' when I saw on our local BBC News that Peterborough City Council's proposed massive wind and solar farm on Council-owned land, could 'bankrupt' the Council if it failed to deliver...
I am reminded of the appearance of a very agitated Chief Executive on tv a while ago who was SOOO determined that this project should go ahead, otherwise the Council 'would not be able to look after its old people'...
Made me wonder how the Council had managed to look after its old people up to this point - and also brought to mind the old saying: 'Methinks he doth protest too much...'
Cynical..? Moi..?
Phillip Bratby said:
The time frame for STOR is to start up almost instantly and buy time for more conventional power stations to increase their output, allowing for STOR to then be switched off. It's a bit like pumped storage in operation I guess. Or maybe like a hybrid car - the battery gives the initial kick of acceleration while the engine gets up to speed enough to take over. A prolonged cold spell shouldn't see STOR kick in. It is just to bridge that gap between an unexpected outage from a regular power station or a sudden loss of wind power and the time it takes for the rest of the network to respond.
It is quite clever, and somewhat canny that many of the sources of STOR will be existing backup generators that nobody sees. However it is also expensive and could have been avoided by not allowing wind power to barge other users off the grid when it is windy and making wind farms deal with the variability themselves.
Brussels fears European 'industrial massacre' sparked by energy costs
"We face a systemic industrial massacre," said Antonio Tajani, the European industry commissioner.
Mr Tajani warned that Europe's quixotic dash for renewables was pushing electricity costs to untenable levels, leaving Europe struggling to compete as America's shale revolution cuts US natural gas prices by 80pc.
"I am in favour of a green agenda, but we can't be religious about this. We need a new energy policy. We have to stop pretending, because we can't sacrifice Europe's industry for climate goals that are not realistic, and are not being enforced worldwide," he told The Daily Telegraph during the Ambrosetti forum of global policy-makers at Lake Como.
"The loss of competitiveness is frightening," said Paulo Savona, head of Italy's Fondo Interbancario. "When people choose whether to invest in Europe or the US, what they think about most is the cost of energy."
http://www.telegraph.co.uk/finance/financialcrisis/10295045/Brussels-fears-European-industrial-massacre-sparked-by-energy-costs.html
Gareth: It was somewhat of a rhetorical question as STOR is now being proposed to fill the potentially long term gap between a dwindling supply and a growing demand, not just as a rapid response to a short term (1/2hour) mismatch between supply and demand.
While I think Mr Crotty hits the nail on the head, I am not sure that it is a problem for Ineos as Grangemeouth has long been supplied by a dedicated CHP plant. That supply does not go via the grid so it is not clear how much their power costs are influenced by green taxes, etc.. Also it seems possible that the CHP plant is powered by gas direct from the nearby terminal and/or the refinery which would keep it outside the general cost and tax regime as well.
Secondly, just how much STOR capacity is actually available? My impression is that it is not more than a few GW, enough to cover the loss of one major plant, perhaps two. Although the per MW price is sky-high, the relatively minor capacity and intermittent use may mean that the overall impact on bills is not huge.
mikeh 3:06 PM
I believe Mr Crotty was really pointing to the high cost of feedstock for the chemical plant(s) at Grangemouth. The Ineos ethylene cracker will not be able to compete with plants in the USA using low cost methane (and some ethane) from shale gas. He also made the point that Ineos is also competing with the middle east chemical plants that have access to lower cost gas ....................
and don't think the govt can help big energy users by exempting them from the green madness - that would surely distort competition which we all know is strengst verboten
http://www.thegwpf.org/threat-eu-action-green-energy-discounts-spooks-german-industry/
I read with interest the claim that the U.K. has some of the lowest energy prices in the U.K. here in S.W.France I pay about 700 euros per year for the electricity that I use in both house and 250 sq. metre workshop, my living space is small but even so I can't visualize there being many electricity bills much lower than that. Having said that I heat with oil and wood, oil having shot up outrageously this year.
The British grid is old and creaking, the new hidden but astronomical costs of connecting and distributing the generated dribbling electrical power [sometimes] produced by new off-shore and on-shore bird chompers is prohibitive but it also undermines our old infrastructure, because capacitor banks, for power factor correction [of electrical surges] which cause stress at points on the older parts of the grid.
All of that causes weaknesses.
Then,
Throw in a major outage, say a coal plant goes down in Yorkshire and this is a real possibility the plant is worn and has been overused in the last few months - it is due to be closed down. All of this, in the depths of winter, and during a period of blocking anti-cyclone and hey presto - the grid will be knocked out for days. Days? - are the people of Dungeness and Romney and environs reconnected yet? The grid will take a big hit - step down transformers will blow, then - will STOR be able to help?
I do not know what is the capacity of STOR, who is responsible for testing the system, have any checks been made and will it all fall into place - if and when the inevitable occurs? Has the software, hardware been backed up?
The track record to say the least - is not great.
I recommend blankets, sleeping bags for the daytime and ski wear [for indoors] and other means of lighting, stock some canned food, bottled water, UHT milk have a small cooking stove not reliant upon the mains, hard cash - especially if you live in a flat, make sure you're OK for period of time, say about a fortnight.
Robert Thompson: fair point...I was picking up on the comments about our electricity supply, STOR, etc without realising that the video is actually about shale gas. So his coments imply that Ineos is paying market prices for the gases they get from the terminal next door; and the same probably applies to the power station. That must hurt, compared to US shale-driven priciing, as you say. As the gases are co-products from the Forties system which must be fully written-down by now, BP must be smiling all the way to the bank.
They're working on it, Ian. If/when necessary they will switch off even more street lighting, so that should bump up the number of road deaths.
mikeh said:
Page 53 of National Grid winter 2013/14 outlook details the STOR capacity as being : "For winter 2013/14, our present level of contracted STOR is approximately 2.7GW; approximately 1.8 GW comes from [Balancing Mechanism] participants and 0.9 GW comes from non-BM generating plant and demand reduction units."