Bishop Hill Interconnecting confusion
Jun 12, 2014 Climate: Parliament Energy: grid Energy: other In a new report published today, the think tank Policy Exchange examines the case for building a whole lot more interconnectors so that we can import electricity from overseas, in particular availing ourselves of hydro power from Scandinavia and geothermal from Iceland. The existence of a big pipe between the UK and Norway would also allow us to store energy generated in windfarms here in pumped hydro stations up there.
According to the authors, interconnectors are super-duper and will give us access to much cheaper power prices from these overseas markets. But the idea that we can interconnect our way out of trouble all starts to fall down when you read the chapter on barriers to building new interconnections. Given the opportunities for arbitrage, people should be building interconnectors on their own initiative - the profits available should be enormous. Unfortunately this doesn't happen. Reading between the lines the reason is that nobody in the investment community is going to place a massive bet on a UK electricity market which is built on a premise of fleecing the consumer for the forseeable future - they simply do not believe that politicians are going to be able to sustain such a policy. So in order to get investment politicians have to guarantee returns, an approach that is common in Europe.
And so the report moves on to discussing some of the problems arising, for example:
- how to deal with diminishing returns as successive interconnectors come on stream - forcing consumers to pay for new interconnection anyway is one possibility considered
- how to deal with the fact that EU regulation is punitively biased against arbitrageurs in the interconnection market
- how to fit interconnectors into the absurdly complicated UK regulated "market"
- and so on.
Pretty soon you are left with the impression that the whole thing has become so absurdly complicated as to be completely unworkable. Here you need to take a step back. The whole approach to energy policy is so fundamentally flawed as to make the Policy Exchange report an irrelevance. It's a straw in the wind of a policy approach that is blowing the wrong way.
Reader Comments (39)
The electricity markets have been rigged to benefit the Mafiosi who build and operate the wind farms, and now the diesel STOR system, up to 12x grid price subsidies.
The only way out is to install fuel cells in half the homes so as to create about 5 nuclear power stations' additional capacity which homeowners use to minimise their use of the grid. That will bankrupt the wind farm operators and enable the elimination of the subsidies in the renegotiation.
Since most of the owners are foreign, it will result in a rather large subsidy for the British taxpayer.
Andrew, I came on to say thank you for pointing to a report that I'm sure I would never have found in a month of Sundays, left to my own devices, and for this summary:
But before I can do all that I feel the need to read 'the solution' from Spart. Not in my view helping to assure anyone open-minded who might chance on your critique that sceptics are sober in our efforts and analysis. But hey ho. Freedom costs.
Oh dear...need to get round Russia somehow. And all those resources there...think of the money boys? Not us though!
So, how many politicians (and the ex type) are on the pipe, cable and turbine pump company boards? Bet Yeo is in there somewhere....and then there's the notion (on paper) of the power connector around N. Africa for the panels.
Say hello to the brand new subsidy industry.
Or
Watch the usual suspects claim that this shows the 'failure' of markets and demand Govt spend money to build them (obviously after due and expensive consultation and analysis by sock-puppet NGOs and Quangos.
One simply has to love Sophomoric Reasoning.
How great it's gonna be when Germany exports vast quantities of energy it currently doesn't have to the UK. Gee, it has the possibility to shut down all other German manufacturing and let them just concentrate on windmills. Later, the "interconnectors" can link up with Japan and get all that extra clean nuclear energy Japan is producing. Oh, oh! The connectors will likely go right through China and we all know China is producing more electricity that the US! Oh, oh, oh! India is about to embarck on a vast expansion as well. And why not route the connectors through Arabia, Iraq and Iran (must bypass evil Putin) and have them build oil-fired generators.
Just imagine, the world at peace, the UK not even having to bother with power generation - only distribution.
Perfect!
With the transmission and conversion losses how could anyone think it is a worthwhile to ship the any tiny excess from wind generating power for storage, presumably using gravity, to Norway (or anywhere) I'd like to see the cost/benefit and ROI calculations for that. It could only make sense if you were riding on the back of an existing infrastructure that is used to for electricity arbitrage.
As you seem imply, if it was commercially viable investors would be queuing to build an infrastructure to ship electricity so they could buy low and sell high. The fact that they aren't and it takes a political think tank to come up with it speaks louder than words. And you have to remember that one of the effects of unrestricted arbitrage over the long term is to level the market. Perhaps the Scandinavians would not be happy with their energy costs being raised to reach that level.
I can't see why a political think tank is at all interested. Let the market work it out.
haha
"Pretty soon you are left with the impression that the whole thing has become so absurdly complicated as to be completely unworkable."
It hasn't stopped them in the past!
They are still going for fusion, carbon capture & storage and storing electricity in 'not yet invented' batteries.
Case Denmark: When it's windy, they sell their extra wind generated energy to Nordpool. When it's not windy, they buy it back from Nordpool. This is basically what Britain wants to do now, right?
Well, Nordpool pays very little for the electricity. At times Denmark has to even pay Nordpool for the right to "sell" them electricity. So Denmark is mostly dumping their extra electricity to Nordpool. And even if Nordpool pays little, Denmark has to pay full subsidies to the producers.
But when Denmark needs their electricity back, there's no discount. Market prices, baby!
Again, we have a good idea namely to find a way of storing the windfarm output until it is required. What is not to like?
Unfortunately, the numbers have not been calculated. How much storage could Norway provide and would that be enough to supply the UK. (Doesn't Scandinavia already store output from Germany and sell it back to them at a huge profit?)
I find this is a common thread in some people's thinking.
And Interconnectors work both ways.
A market that'll pay more than us gets the commodity.
@Richard Drake; the UK 1 kW/stack metal/solid oxide fuel cell technology took 25 years to develop and has just gone into large scale manufacture. In February, Al Gore installed a similar 25 kW NASA technology system in his Corporate HQ. In Australia they have the BluGen solid oxide system.
These are 55% to 60% efficient, methane to electricity, and the same capital cost/kW as nuclear plants. 10 million in the UK as part of the standard gas boiler replacement would reduce fossil fuel use by half for that 10 GW tranche. This is for night time use by homeowners and daytime use as standby for the windmills. I had an early role in developing the system.
Having seen the failure of the windmill, the investors have come in and the real power revolution is rolling. This is why UK government is so keen on fraccing! The Mafia who 'persuaded' the last government to offer the subsidies are facing a big shock!
The BritNed interconnector funnels coal fired Maasvlaakte power to the UK. How nice to offshore our emissions!
We should of course have told EdF that Hinckley power prices would be capped by the French interconnector price, rather than guaranteeing them a market and price.
Joe Public
Interestingly, the Germans are also planning an interconnector to Norway.
Not Buying from Norway, surely not!
Of course this is the 'absurdly complicated UK regulated market' (or rather cartel) created by the Thatcherites - in the name of 'competition'. The same free-market idealists that abandoned the nuclear program, set up Hadley Centre, destroyed UK industry and deregulated the financial sector; resulting in fraudulent bankers creating a faux-GDP based entirely on housing debt with a subsequent crash leaving us with zero industry, zero energy plan and still no cheap housing (because unlike France and Spain we have an artificially limited housing supply). So most of our income is still spent on ridiculously high priced, yet tiny houses. If we had more money available we could likely set up our own backup generator systems and sod them all! I'm still hoping for household-sized solid oxide fuel cells running off shale gas.
1. The purpose of the Norwegian interconnect from Germany is to access the pump storage modifications being installed by Germany to own the potential energy in enhanced Norwegian hydro. We are doing the same.
2. Domestic fuel cells are ideal for use with roof top solar panels as standby for the windmills because you can use the fuel cells to damp the solar energy fluctuations in Summer. UK government is shifting the subsidies from farm land to roof top solar cell installations.
Interconnectors to Australia. When it's sunny summer there it's dark winter here. We get their solar when we need it, and then they get...ours.
seriously, the PX plan is so good I wonder why everyone doesn't get their power from somewhere else.
'...completely unworkable...'
Since when has that stopped UK politicians..?
No rhoda, we'll store it in batteries and fly it over in your winter. Much cheaper and Qantas have been struggling a bit lately.
Given most of Northern Europe is covered by 2 time zone , the ironic cold reality is that the time of maximum local demand , and therefore the time when supplying others is least possible , is almost the same everywhere. So a shortage in one place it likely to be at the same time has others on the network are themselves dealing with maximum demand locally.
Guess what that means, you get nothing or you pay through your teeth .
Shifting energy around assumes that demand patterns will differ with geographic location.
This might work across timezones and climate zones with big shifts, or between areas where supply routinely exceeds supply.
In the Northern hemisphere we have more or less the same timezone, and share Winter and some Countries have heavy Winters and higher demand than others, the wind and sunshine are at their lowest and water freezes, so hydro output is at its best in Spring when ice and snow melts, and of course demand is lower.
If wind and solar are in this system, their output is unpredictable, intermittent and variable.
Planning and controlling supply, which is dependent on the elements will be practically impossible.
Thus we are left with controlling demand, which we know is the way we are being bounced and 'nudged' by high pricing, softening propaganda, smart meters then ultimately legislation = force.
Stock up on candles and batteries, paraffin, dried and tinned food.
Surprised you didn't mention that other interconnector marvel of the age:- DESERTEC.
http://www.rtcc.org/2013/07/05/desertecs-collapse-unlikely-to-affect-eu-energy-plans/
Ooops! Who'd have thought?
And then there's Potato Ed's favourite, Icelandic Geothermal (and a 1000 mile long interconnector cable) which you mention but don't discuss
http://uk.reuters.com/article/2012/04/12/uk-iceland-power-idUKBRE83B0X020120412
Meanwhile, back at the fort, anyone else notice how many recycling plants producing 'biomass' seem to be catching fire recently?
And you may have seen yesterday's announcement of the good news for the rest of the British Coal industry (not).
Is there no end to the talents of Mr. Davey and his chums?
An international High Voltage Direct Current (HVDC) interconnector grid would be a wonderful idea. Because the world spins it would produce far greater economies due to varying demand across the world overnight. Making power not only cheaper overall but far cheaper in countries where local government artificially inflates production costs.
However though there are several interconnectors over 1,000km long almost all are within one large country. This leads me to think the problem is, as normal, the politicians won't allow it.
>1,000km sounds quite long.
What's the typical percent power loss per km for an interconnector?
National Grid says capital costs getting up towards £20m per kilometre for underground/water. Pricy.
The greenies claim these fabulous intercontinental super-duper interconnectors are possible using superconductor technology.
Maybe they will, One day.
The current need for a booster station every mile or so to keep temperatures close to absolute zero, is a tiny fly in the ointment.
"Fabulous" indeed, as always with our greenie chums.
If anyone would like to read something rational and well-informed on the topic, try this from Timera Energy (a proper energy consultancy):
It takes the byzantine and warped UK regulatory framework as a given, which of course may elicit snorts of derision. But hey, practical people must sometimes just play the team in front of them
Nick Drew:
The entire scenario is blown apart by simply securing a derogation to the LCPD to carry on burning coal (or just doing it) - or by falling gas prices.
I'm not sure if Norway uses pumped storage or if they will just stop using their hydro when the wind blows elsewhere.
Either way, they are holding the trump card and will be the financial winners in these transactions.
The way this is shaping up - it might well end up cheaper to seasonally move populations to where they require less energy - a green innovation? ... oh, wait a minute....
Since climate change is so man made, when will they introduce social justice climate for all in politics?
Irrc, the proposed interconnect with Iceland will have a capacity of 400MW. The cable will have to be 1000-1500km long. According to this report in the Grauniad http://www.theguardian.com/environment/2012/apr/11/iceland-volcano-green-power the cable will use about 800 tonnes of copper per km. At today's prices (£3500 per tonne?) that's about £3.5 billion just for the raw copper. Then there are costs of laying the cable, the rectifiers at each end, and maintenance, and then the transmission losses. All for 400MW, which is less than half the capacity of one coal or gas station? This is clearly more green fantasy and economic madness. Just because Iceland has geothermal potential doesn't mean it makes sense to tap in to it. We need to build the power stations closer to the demand, not further away.
For the idiots in DECC and Westminster who seem to lack any ability to think critically, I should also add that while we are fannying about with expensive green fantasies like daft interconnectors and CCS, the Chinese are building 1 new coal power station every week. Meanwhile the global average temperature has not risen for 15-17 years, and the CO2 thesis remains un-proven. Time for a rethink as the Australian and Canadian governments have done?
Once did a study on Siberian hydro plant and cost of connection to centres of demand. Even at zero output cost per kWh (the old Russian assumption) transmission alone made it uncompetitive, despite time differences and the rest.
In the meantime, our 7000MW of installed wind capacity is producing......150MW.
SUCH good taxpayer/consumer value..! SUCH wise politics..! World leaders in renewables - that's what we are..!
God Bless Ed Davey and the DECC, that's what I say...
You may find this interesting:
http://www.nwcouncil.org/history/Intertie
“The Pacific Northwest/Pacific Southwest Intertie is the high-voltage electron highway of transmission lines ...”
Also:
http://en.wikipedia.org/wiki/Pacific_DC_Intertie
lapogus:
Iceland does far better using its geothermal power to smelt aluminium, and exporting it as Al ingots.
In 2012 Reuters reported that:
'"Without subsidies, (wholesale) power prices need to be around 600 crowns ($100) per megawatt-hour to make things fly," Andreas Aasheim, an advisor to Norway's wind energy association Norwea said.
'But lasting wet weather periods can push power prices down, as was the case this year, reducing the appetite for investment into capital-intensive wind power.
'Nordic electricity prices are so low that even with the subsidy, the total income from renewable power generation currently is only around $72.9 a MWh, lower than the cost of producing wind power which is between $90 to $110 per MWh.
'As a result, only one tiny 1.6 megawatt (MW) wind power plant with two 0.8 MW capacity turbines has received green certificates in Norway since a joint Norwegian-Swedish subsidy program was launched in January 2012.' ('Low power price threatens Norway's green targets', Nov 7, 2012).
So, just how do we expect to export our hugely expensive wind-generated power via a very expensive interconnector except at way below cost?
The Norwegians are no doubt keen on this!