Green messages

When I discussed Scotland's energy supply on Radio Scotland a few weeks back, I shared the airwaves with a Green Party spokesman. I pressed him (I forget his name) on how energy was to be generated on cold still nights, and was told that we needed research into energy storage technologies.

That's fair enough, although the obvious corollary is that we are stuck with fossil fuels in the meantime.

It's interesting therefore to see the green movement declaring today that we just don't need any fossil fuel generation at all. This comes in response to the Conservatives' warnings that we risk the lights going out.

SCOTLAND must build new power stations if it wants to keep the lights on beyond 2025, opposition leaders will warn today.

A massive new gas-powered plant could be built at Longannet which looks poised to shut down within the next decade, according to the Conservatives.

But environmental bodies have dismissed the claims, insisting that Scotland can continue to power itself from green sources like wind and hydro.

Clearly the greens know that the lights will go out if the wind fails to blow on a winter's night unless we have conventional generation capacity on hand. It's interesting to ponder then why they persist in telling journalists that we can allow all these power stations to close. And why the journalists don't call them out on it.

Sturgeon cries for help

Having gone hell for leather to make wind power the centrepiece of Scottish energy policy, having fought tooth and nail to prevent new nuclear and coal-fired capacity and at best only lukewarm on gas, the Scottish National Party are now having to face the consequences of what they have done. It looks like a case of a cry for help:

Firstly, we have demands that Westminster do something about the perilous security of Scotland's electricity supply:

The First Minister has written to David Cameron urging the UK Government to review the security of Scotland's electricity supply.

Nicola Sturgeon said UK energy policy was compromising energy security north of the border and called on the Prime Minister to act.

Click to read more ...

Energy costs in the absence of policy

Since the government published its most recent estimates of the costs of renewable energy policy I have been trying to get to the bottom of the question of how they estimated what the costs would have been in the absence of policy.

After several months of effort I have managed to get the underlying spreadsheet and a bit of a steer (link).

In relation to your question on the price before policies, page 66-67 of the prices and bills report, sets out that the wholesale price in the baseline (no policies) is modelled using DECC’s Dynamic Dispatch Model, and requires making a number of assumptions, particularly about the no policy baseline.  To estimate the electricity wholesale cost in the baseline, we used historical trends in build rates and plant characteristics where possible to match capacity margins, and plant efficiencies as closely as possible to what is most likely to have happened in a world without policies. This is therefore a modelling output, and not a result of a simple calculation.

Click to read more ...

Greenery is national security threat

Windfarms and all the other bonkers attempts to green the electricity grid are not only an expensive and pointless gesture that encourages graft and sets neighbour against neighbour. It turns out that they represent a threat to national security too:

Security experts said last year that measures to make the electricity grid greener are boosting its vulnerability to computer hacking since new wind farms, solar panels and smart meters mean there are additional portals to be breached.

“The energy grid today is vulnerable from all degrees,” Slava Borilin, critical infrastructure business manager at Kaspersky, said in an e-mail. “Its electricity production is under threat of interruption and down-time from breaches of industrial control systems.”

More pressure on the capacity margin

This is actually from yesterday, but seems rather significant to me:

A raft of proposed new gas-fired power plants will be shelved for at least a year after failing to win Government subsidies, experts have predicted.

Some old power plants could also be at risk of closure after missing out on the payments, potentially worsening the capacity crunch in coming years, they warned.

The cost of the subsidies awarded is of the order of £1 billion per annum.

A prices and income policy

Douglas Carswell, fresh from his defection from the Conservatives to UKIP, recently won time to debate energy costs in Parliament yesterday. The transcript is here. It's not terribly exciting, but there was one rather delicious moment where the minister, Matthew Hancock felt obliged to respond to Carwell's taunts about Conservative policy on energy, namely that it was a "prices and incomes" policy:

...a prices and incomes policy for energy in 2015 will no more work than a prices and incomes policy has worked for anything in the past. Prices and incomes policies do not work.

As Hancock put it

By switching from a regime in which...subsidy is given out to whatever renewable technology was brought forward to a regime in which a controlled pot of subsidy is auctioned to ensure that we get the best possible value for money, we have made a change towards a market-oriented system.

So it's still a prices and income policy, but a different one.

E.ON to split

Reuters is reporting that German energy giant EON is to split in two, with its conventional generation assets ending up in a new company, while the renewables and energy efficiency businesses remain under the EON brand.

It is hardly surprising that EON wants to be able to protect its cash-cow renewables operations from the losses its conventional assets are generating - an inevitable consequence of the market having been so thoroughly rigged against them. You can see the logic in the step management have taken. In the short term, management look as though they are going to bet more money on renewables. However, with the Energiewende seeming to lurch from one shambles to another, a change of ministerial sentiment could completely change the energy landscape. It's not hard to imagine a world in which the hived off conventional power stations start to look like attractive assets and the renewables start to look like a collection of dead ducks.

But with the choice between the two businesses being a bet on a minister's whim, it's hard to imagine anyone wanting to invest their money in either.

Good news, bad news

The good news is that some of the EDF nuclear power stations that had to be taken offline a month or so ago have now been restarted. The schedule for bringing the remaining ones back online looks reasonable too.

The bad news is that a mothballed gas-fired power station that was to be recommissioned so as to be available to stand ready to cover unforeseen eventualities over the winter has been experiencing problems (Link £).

...during the first of several planned, paid monthly test runs last Thursday, output from the plant fell sharply. The test, which had been due to run into the early evening, ended soon after 2pm, industry sources said on Monday.

These are teething problems no doubt and the FT at least reckons that we are unlikely to see power cuts:

Energy experts believe that blackouts are unlikely, as long as existing plants in the UK’s ageing power fleet do not suffer serious breakdowns.

But it be interesting to see whether price rises are required to to balance the energy grid and if so how high those prices have to go.

Overoptimistic

Here's an interesting little detail from the National Grid report on capacity margins that I wrote about a few weeks back.

It seems we have windfarms with a nameplate capacity of 7.6GW. National Grid obviously then have to derate this capacity for planning purposes. As we all know, it's perfectly normal for the whole of the UK to simultaneously experience very low windspeeds (or no wind at all), and this has been known to happen even in the depths of winter, for example the very cold winters of 2009/10 and 2010/11. I had therefore assumed that the Grid would have to plan on the basis that they might get nothing from windfarms at all, but in fact they do nothing of the sort. According to Table 16, the grid assumes that they will get 23% of nameplate capacity, or some 1.7GW.

Click to read more ...

The cost of greenery

In a footnote to the government's energy prices report the other day, was a link to something rather important: the fossil fuel price assumptions that the government uses. These were published back in September, but it's fair to say they are a long way out of date already.

• The 2014 prices for oil were given as (low, medium, high) $: 90.0 105.0 120.0 while the current price for oil is actually $80 (Brent crude).
• The 2014 prices for gas in pence per therm were: 47.5 55.8 64. Although not quite so bad as oil, these are not looking particularly clever against the current price of 51 pence per therm.

Click to read more ...

The cost of public policy

Updated on Nov 7, 2014 by Bishop Hill

The government released a report yesterday explaining the impact of public policy on domestic energy bills. It's a bit of a mystery in places. Look at the alleged savings that energy policy is currently making for us:

Blue: wholesale, red, network; green, other supplier costsI'm struggling with the idea that wholesale prices (in dark blue) are lower than they would otherwise have been because energy companies are forced to buy renewable energy. Similarly, how can network costs (green) and other supplier costs (red) be lower than they would have been?

I smell a rat.

Click to read more ...

Maria McCaffrey on Radio 5

One more excerpt from yesterday's flurry of news pieces about renewables. This time it's Maria McCaffery of Renewable UK, who is someone whose public utterances generally have to be taken with a considerable pinch of salt.

It's no different this time.

Drive Power Cuts

Dieter Helm on energy policy

Dieter Helm's appearance before the House of Lords Science and Technology Committee today was pretty special, I gather. From his opening remarks - he said that it's a pretty amazing state of affairs that we are even discussing the possibility of power cuts and that we are failing on each of security, price and decarbonisation - that's certainly true. 

Video below or direct link here. Helm starts at 11:39.

Numbskull or nefarious?

Still on the subject of the National Grid report, Nicky Campbell on Radio Five Live interviewed Jeremy Nicholson of the Energy Intensive Users Group and Sally Uren, the CEO of Forum for the Future. This was a remarkable segment in more than one way.

The thing that has struck commenters here at BH was something Ms Uren said about the reliability of renewables. Accepting that the wind sometimes doesn't blow and the sun sometimes doesn't shine, she said:

...that's not a worry when we're thinking about security of supply from renewables because we have these things called "storage units" and so we have this grid that allows us to store energy and deal with peaks and troughs in demand and so this notion that when the sun stops shining and the wind stops blowing so does our energy, it's just not true.

Click to read more ...

Wheels coming off

As if we needed a reminder, it seems that National Grid have confirmed what we at BH have been saying for a while now, namely that the UK is facing an energy crisis this winter. As Emily Gosden reports in the Telegraph:

Britain's spare power capacity will fall this winter to a seven-year low, forcing emergency measures to prevent blackouts, a report on Tuesday is expected to say.

A series of power plant breakdowns and closures in recent months have eroded the safety buffer between maximum supply and peak demand, the report from National Grid is likely to show.

I gather that ministers have been grilled on the subject on the Today programme this morning and I'll try to post some audio when this becomes available.

Today on power cuts

Update on Oct 28, 2014 by Bishop Hill

The National Grid report is here.

Update on Oct 28, 2014 by Bishop Hill

Peter Atherton tweets:

So basically if Hartlepool / Haysham dont return to service as planned before Chrismas, looks like reserve margin will be 0%.

Update on Oct 28, 2014 by Bishop Hill

I've attached audio excerpts from the Today programme below the main post.