Crunch time
Feb 12, 2013
Bishop Hill in Energy: grid

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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