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« A right royal dogmatist | Main | Climate change fast & loose food - Josh 203 »
Tuesday
Feb122013

Crunch time

H/T to reader Doug for pointing out this article in the Sunday Telegraph, which looks at the reluctance of energy companies to build new gas-fired stations in the UK because of uncertainty over the future of the UK energy market. However, this bit at the bottom of the article was interesting too.

Much of RWE’s recent UK investment was in two efficient gas-fired power stations at Pembroke and Staythorpe but they “aren’t running a lot of the time” because margins were lower than had been expected. It was “hard to see” RWE investing in more gas plant at the moment, he said.

This is the problem with wind power. Because it is subsidised it gets dispatched first when available. Gas therefore gets used less. But if your gas plant is not being used a lot of the time it is not earning and you are not making a profit on it. Who would invest in new gas plant in those circumstances?

This is all getting very serious. The UK grid is barely able to meet demand now and I think I'm right in saying that a further 4GW of coal fired capacity is due to be removed from the grid at the end of March. That being the case we could start to see brownouts next winter, if not before. The only alternative is to keep coal-fired stations working.

Crunch time is coming, and it's coming soon.

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Reader Comments (30)

Most contributors here are fully aware of the seriousness of the energy situation, but how can we change the daft policies supported by the coalition and opposition.
Time for a petition or a march. We seem to be helpless voices blowing in the wind.

Feb 12, 2013 at 9:29 AM | Unregistered CommenterG.Watkins

You only have to look at the graphs of daily usage at http://www.bmreports.com/bsp/bsp_home.htm to see how OCGT gets squeezed out of the market. It gets squeezed by the daily pattern of electricity use (coal and nuclear take preference because they are cheap and do baseload) and then by wind when the wind blows. The Government is putting in place a 'capacity mechanism' to pay generators for building gas plant and having them ready for use when needed, but who is going to take the risk of spending billions on plant that won't get much income from generation? Of course the consumer will be paying once for building wind that works about 25% of the time and again for gas that works occasionally to fill the gap. And the consumer will be paying for the grid to connect it all together.

Feb 12, 2013 at 9:31 AM | Registered CommenterPhillip Bratby

Wouldn't surprise me if there are other areas besides energy where suppliers are increasingly reluctant to deal with HMG. Long term, high cost projects need certainty and if those responsible for commissioning them won't provide that because they're obsessed with their own short term electoral advantage, then those (few) capable of supplying them will go and find other governments to deal with. And as the RWE man in that Telegraph piece pointed out, not only do suppliers need certainty more to the point do the pension funds, who are the people with pockets deep enough to finance mega-projects. But they, because of their obligation to their pensioners, are only going to play if they are offered a deal of x% return on investment, guaranteed, no question of some vote-snaffler coming along and changing the rules. Juveniles in government can't see that these people will not be messed about with.

Feb 12, 2013 at 10:01 AM | Unregistered Commenterbill

To paraphrase Phillip Bratby, the Government has put into place a mechanism to commit hara-kiri on a national scale.

Feb 12, 2013 at 10:07 AM | Unregistered Commenterjorgekafkazar

Having listened to someone bemoaning that electric vehicles are not selling well and we are no where along the government's planned uptake of 2 (or 3 depending on the source) million electric vehicles by 2020, all I can say is that this is a good thing. We wouldn't have the generating capacity to handle millions of electric vehicles plugged in to the grid so once again joined up thinking by government is found completely lacking.

Not that I think that current electric vehicle technology is fit for purpose anyways.

Feb 12, 2013 at 10:19 AM | Unregistered CommenterEdwin Crockford

The road to Hell is paced with good intentions.

Usually brought about by the Law of unexpected consequences.

Unexpected that is by anyone who takes the standard route into politics.

Public Schoo l- Oxford (PPE) - MP's "special" advisor- MP.

No real job, no science knowledge and no real life experience.

Feb 12, 2013 at 10:27 AM | Unregistered CommenterDon keiller

I hope Baroness Worthington is happy with the damage and misery she has helped bring about. Perhaps instead of 'brown outs' we should call them 'bryony outs' in future.

Feb 12, 2013 at 10:49 AM | Unregistered CommenterSteve Y

Power cuts, bring it on.
It might just be the wake up call this nation has long needed.

Feb 12, 2013 at 11:54 AM | Unregistered Commenterc777

Glad I've got my 3.5kW generator in the garage, ready to be used in anger....

Feb 12, 2013 at 12:38 PM | Unregistered CommenterDavid

Philip Bratby: "The Government is putting in place a 'capacity mechanism' to pay generators for building gas plant and having them ready for use when needed."

And no doubt this will be trotted out as another "fossil fuel subsidy" despite the fact that it wasn't necessary until the variables* increased in size due to *their* (real) subsidy.

*In this context, "variables" seems a better term than "renewables".

Feb 12, 2013 at 1:05 PM | Registered CommenterHaroldW

c777

"It might just be the wake up call this nation has long needed."

I'm inclined to agree. The egregious Mr Davey might then learn what 'irrefutable' really means!

I wouldn't wish for it normally, but I suspect it's the only thing that will bring them round and, of course, we plebs will be able to beat them round the head with it for as long as it takes to rectify.

Feb 12, 2013 at 1:09 PM | Unregistered CommenterJames P

Bish, it's probably time for you to write another letter to the Courier to refute David Torrance's ridiculous claims:

http://www.thecourier.co.uk/opinion/readers-letters/greedy-countries-can-resolve-this-mess-1.68484

http://www.thecourier.co.uk/news/politics/msp-accused-of-scaremongering-after-windfarm-fuel-poverty-claims-1.68567

Feb 12, 2013 at 1:16 PM | Unregistered CommenterAndy

I've been banging on about the Ides of March for some time now - the Impending Depletion of our Energy Supply that is. If we get a cold start to April coupled with a high pressure system, life could get very interesting. No Eastenders, no Facebook, no Strictly? That's the kind of thing to make people cause a fuss.

Feb 12, 2013 at 1:17 PM | Unregistered Commenterstanj

I agree. The British establishment have to decide have to decide if this is really worth the candle. The Americans have gone for gas in a big way.


EU carbon price crashes to record low

Price of a permit to emit a tonne of carbon fell to €2.81 after an EU vote against a proposal to support the struggling market

http://www.guardian.co.uk/environment/2013/jan/24/eu-carbon-price-crash-record-low

Feb 12, 2013 at 2:15 PM | Unregistered Commenteresmiff

It is ironic that wind turbines do not generate very much power and yet they generate enough to make investment in OCGT uneconomic as noted by Philip Bratby. I guess wind turbines are creaming off what we in Canada call non-firm power at rates that non-firm power does not normally attract. I suspect that the combination of wind and OCGT would never be cost-effective and that wind turbines likely only make sense in combination with large scale hydroelectric development. However too much wind turbine capacity could also make hydroelectric development uneconomic if water ends up being spilled. Firm power rates should always be higher than rates for non-firm power thereby encouraging development of base load but it sounds as if that is not happening in the UK.

Feb 12, 2013 at 3:47 PM | Unregistered Commenterpotentilla

Bryony Outs. I'm in awe.
=================

Feb 12, 2013 at 3:48 PM | Unregistered Commenterkim

"a tonne of carbon fell to €2.81"

Can I buy some? My woodburner goes well with charcoal, and that's a very good price...

Feb 12, 2013 at 4:21 PM | Unregistered CommenterJames P

Bish,

According to Christopher Booker it is 7.5gw (not 4gw) of coal fired capacity that is being retrenched in March - i.e the equivalent of say 30,000 wind turbines plus 7.5 GW of the new gas fired capacity for back up - that we can expect RWE will refuse to build .

I have always thought that DECC would back off before it fell off this cliff, but sadly it looks as if I was wrong.

Brown outs, black outs, industrial decline and fuel poverty all await us.

Feb 12, 2013 at 4:59 PM | Unregistered Commenterdave

Feb 12, 2013 at 9:29 AM | G.Watkins

Most contributors here are fully aware of the seriousness of the energy situation, but how can we change the daft policies supported by the coalition and opposition.
Time for a petition or a march. We seem to be helpless voices blowing in the wind.

Not really. We could save ourelves the trouble of a petition and a march by taking a leaf out of the activist's playbook.

We need to be considering 'UK Energy Policy Hour' where at short notice, all those who want to get the attention of the government with regard to its idiotic energy policy, turn on every heavy electrical load they have in their house for five or ten minutes. Not very expensive to the individual but if enough people supported the action it would be highly effective. Best achieved in the winter when there is high demand and timed to coincide with a commercial break in a very popular TV programme. A hundred thousand supporters could easily add 1GW to the demand.

Feb 12, 2013 at 5:22 PM | Unregistered CommenterBilly Liar

Demand currently nudging 54GW, with wind contributing a mighty 0.74GW. I'd be interested to know the current £/GW for both...

Feb 12, 2013 at 5:49 PM | Unregistered CommenterJames P

If things follow the miners strike then the U|K will have scheduled blackouts. As recall; though I could be wrong; areas of Edinburgh were cut-off for 3 hours at a time, As a student we either spent the early evening at the Students union then walked home or stayed at home in the early evening then walked to the union then home again later. Either way it meant you had heat and light all evening from 6pm until midnight. My mother, without electricity anyway, was unaffected.
This saw us through then, and I suspect that people will cope for a short time using similar strategies. The difference is that we knew it was a temporary situation and one side or the other would cave in and things would get back to normal; this time it is a little different.

Feb 12, 2013 at 6:57 PM | Unregistered CommenterSandyS

"...I think I'm right in saying that a further 4GW of coal fired capacity is due to be removed from the grid at the end of March. That being the case we could start to see brownouts next winter, if not before...."

The Climate Change Delusion is so utterly embedded in our political, commercial, government* and education systems that it will persist until people are visibly dying as a consequence. Even then, it won't go away quickly. It's sad to say, but death and poverty are the price we'll eventually have to pay to get the monkey off the Western World's back.

____________________________________________________________________________________

* "UKCPO9 is just one of many tools availiable (sic) don't use it in isolation"

Feb 12, 2013 at 7:13 PM | Registered CommenterMartin A

Blackouts don't just affect the people / residence. It affects business and manufacture. Blackouts will do a lot more hurting than just the cold winters.

A monumental idiocy. Perhaps a monument in the town centre. After all; great achievements need to be remembered (He-Who-Must-Not-Be-Named did great things — terrible, yes, but great.).

Feb 12, 2013 at 9:27 PM | Unregistered CommenterGreg Cavanagh

Gas plant can be built fairly quickly.

Let the UK brown-outs begin, and within 6 months there will be a sudden burst of new gas plant being built. Don't expect a "oops sorry we got it wrong" from your pollies though.

Feb 12, 2013 at 11:00 PM | Unregistered CommenterHarry

Feb 12, 2013 at 11:00 PM | Harry
//////////////////////////////////////////////
Nothing in the UK (well except for the Olympics) can be built quickly because of planning regulations,
But you are definitely right that there will be no apology from our Politicians. Unfortunately, there is no real accountability for misconduct or gross negligence or dereliction of duty in or about the performance of public office. If only the politicians and policy advisors could be made financially responsivble to compensate the public for the harm caused by the Energy Policy of the last 15 to 20 years, and the passing of the Climate Change Act.

Feb 13, 2013 at 12:15 AM | Unregistered Commenterrichard verney

The UK is about to live through a national-scale version of the Darwin Awards -- after all, tens of millions of people voted for the politicians who passed the Climate Change Act......

Feb 13, 2013 at 2:26 AM | Registered Commenterrickbradford

I can remember the miners' strike too and the three-day week. The times of the blackouts varied during the week. I recall several evenings when my husband was away overnight, two very small children asleep upstairs, sitting on my own in front of a log fire (luckily), by the dim light of an oil lamp, light that that wasn't strong enough to read by, no TV, no radio, no record player, no central heating, difficult to produce hot food (one camping gas cylinder....). - it was very quiet, boring and cold. Not to be recommended in any way.

Feb 13, 2013 at 2:33 AM | Unregistered CommenterMessenger

I was at school during the power cuts. It was quite exciting. We had a local bus strike around the same time. It was my most crucial year at school (highers). I didn't care. I just wanted to stay at home and so did everyone else. We learned how to use candles. It's still my only practical skill.

Things have changed. The hard working little dudes today would freak out. They want good results so they can go to university, get a 2:1 in Computing Science and work in Specsavers for the rest of their lives.

Feb 13, 2013 at 6:49 AM | Unregistered Commenteresmiff

esmiff

"and work in Specsavers for the rest of their lives"

Or Poundland, as per the graduate in the news yesterday, who was sent there for 'work experience' by the DWP. The argument/incentive that a degree would get you a good job now seems to have degraded somewhat - now it can you A job.

Mind you, degrees aren't what they were either. Sylvia Plath's English classes at high school (in the late 40's) required her to read and fully comprehend 45 books/year.

Feb 13, 2013 at 11:51 AM | Registered Commenterjamesp

The answer is to retrospectively tax wind power. There are precedents -- oil firms have been stung with huge increases because they were found to be making too much money.

Set the tax at a level which cancels the subsidies, sit back and watch the new gas-powered stations fire up.

JF

Feb 13, 2013 at 5:54 PM | Unregistered CommenterJulian Flood

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