The country’s coalition government is preparing to invite energy companies to resume exploration in the three major offshore fields that supply most of its gas.
It comes after National Grid operator Transpower was last month forced to warn families to limit their electricity usage to avoid a shutdown during a cold snap.
The decision to reverse the ban, made by resources minister Shane Jones, will be a setback for green activists and likely to be regarded as a blow for Labour after Ed Miliband has repeatedly pledged to halt new drilling for oil and gas in UK waters.
Accelerated timeline for a carbon neutral grid would weigh more heavily on bill payers.
Britain’s electricity networks will not hit net zero until 2035, National Grid has said, undermining a key pledge by Labour to hit that target by 2030.
National Grid Electricity System Operator (ESO) on Monday set out plans for a massive £58bn expansion of the UK’s high-voltage transmission network, including thousands of new electricity pylons, substations and other infrastructure spread across the countryside. The Telegraph has the story.
The project is designed to make the UK’s power networks carbon neutral. However, ESO said this goal would not be reached until 2035 under current plans.
This fits with government targets but not with Labour’s, placing ESO in the front line of a key pre-election battle over energy policy.
The deadline prompted a backlash from Ed Miliband, the shadow energy secretary, who said a Labour government would make ESO accelerate its programme to hit the 2030 target. A spokesman said: “We said 2030 for decarbonising the grid and we meant it.”
Mr Miliband is expected to repeat the pledge in a speech to the Green Alliance environmental pressure group on Tuesday morning.
Targeting Conservative voters worried about the Government’s climate and energy policies, he will set out Labour plans to “end 14 years of high energy bills and energy insecurity under the Conservatives with a national mission to make Britain a clean energy superpower”.
Energy Secretary Claire Coutinho accused Mr Miliband of “sniping from the sidelines” while having no plan to pay for its “unfunded spending sprees”.
She added: “Ed Miliband still cannot say how Labour will pay for its 2030 decarbonisation pledge… this mad 2030 promise is not based on what industry or consumers want. It would see costs explode, higher taxes on working people and take us back to square one on the economy.”
Asked if Labour’s 2030 target was feasible, a National Grid ESO spokesman suggested it “could be possible” to decarbonise the grid by 96-98pc by the end of the decade.
However, analysts warn that decarbonising the grid by 2035, let alone 2030, remains a huge and expensive challenge.
Tom Faulkner, head of infrastructure and networks at Cornwall Insight, said: “The 2035 forecasts for wind and solar capacity outlined in the [ESO] report are notably ambitious.
“Achieving these targets will demand substantial investment, not only in grid infrastructure but also in the renewable generation assets themselves. It’s imperative to recognise the challenges ahead.”
Experts said the policy, announced by Rishi Sunak on Tuesday, would result in a bill of around £5bn for consumers, equivalent to £178 per household, most likely spread over a decade or more. The Telegraph has the story.
Tom Smout, of Aurora Energy Research, which conducted the findings, said: “What consumers are being asked to buy is energy security.
“The priority is to keep the lights on by having backup for the intermittency of renewables.
“An extra 5Gw of new backup generating capacity is needed to keep the lights on. Each gigawatt of capacity will cost about £1bn.”
Documents published on Tuesday by the Government said plans to boost Britain’s energy security by building more gas-fired power stations will be funded by bigger payments to plant operators, resulting in higher energy bills for homes and businesses.
Electricity generators will be paid via the so-called capacity market, an auction system that pays operators to be on 24-hour standby to deliver power when supplies become tight.
According to official estimates published on Tuesday, gas plants are only expected to be used for around 700 hours in 2030 – the equivalent of about 29 days.
The predicted figure for 2035 is below half of that and falls to less than 100 hours from 2040 onwards.
It follows a stark warning from ministers that for at least the next two decades Britain risks having too little generating capacity to keep the lights on.
Britain’s ability to generate electricity has become increasingly reliant on the weather as net zero targets spur a shift to renewable power sources such as offshore wind and solar power.
Announcing the new gas-fired power stations on Tuesday, Claire Countinho, the Energy Secretary, said: “A weather-dependent, renewables-based electricity grid means we will need to have flexible power for when the wind doesn’t blow, and the sun doesn’t shine.
“Without gas backing up renewables, we face the genuine prospect of blackouts.”
The National Grid have proudly announced the launch of the Viking Link, which will send electricity to and fro between here and Denmark:
Working with Energinet, the Danish power grid operator, we are proud to announce the launch of our record-breaking electricity interconnector between the UK and Denmark, Viking Link.
Viking Link is the world’s longest subsea and land interconnector, travelling 475 miles to join Bicker Fen substation in Lincolnshire with Revsing substation in southern Jutland, Denmark. Denmark has one of the world’s highest proportions of wind generation, so it is the perfect country to connect to, sharing clean electricity and helping the UK and EU meet 2050 net zero emission targets.
There will be huge benefits for UK consumers including cheaper, greener power and increased energy security, as the UK can call on additional power from Denmark when needed.
Initially, Viking Link will be operating at a capacity of 800MW before increasing over time to 1.4GW, powering up to 2.5 million UK homes and bringing over £500 million of cumulative savings for UK consumers over the next decade. National Grid and Energinet will be working together to bring the asset up to full capacity over the coming year.
While it may give us access to cheap wind power when there is a glut of it in Denmark, it certainly will do little to enhance energy security, as they claim.
Has it not occurred to the National Grid that when the wind is not blowing here, there is a good chance it is not blowing in Denmark either?
Remember that cold start to December, when high pressure was in charge? Wind power in Britain collapsed to well below 2 GW, a tiny fraction of its normal output:
What power we can manage to get hold of at times of low wind will be astronomically expensive. And if we try to export our surplus wind at times of glut, it will be at a loss, which the public will ultimately pay for.
No doubt it will be a nice little earner for the National Grid. But it the public who will have to pick up the bill!
We can’t even run a cement factory all day anymore
Get your candles for summer! Unlike the last three years the Australian national grid won’t be rescued by another cooler La Nina this year. Fears of rolling blackouts are fraying nerves at The Australian Financial Review Energy & Climate Summit. The transition is described as stuttering, gridlocked, faltering, and the government as “desperate”.
Things are so bad, former CEO’s of major generators are warning that “the lights are going to go out” and accusing one Energy Minister of speaking “complete and utter horseshit” because they don’t think we need reliable peaking gas plants to replace coal power. Said Energy Minister has responded by refusing to even take his calls. That’s really going to work. Meanwhile Japan is getting nervous just watching us, afraid we have screwed things up so badly we can’t be relied on to keep sending them gas.
Not only is summer nerve-wracking, but things are already so bad, one of our largest cement producers is shutting down nearly every day because it can’t afford to pay for the peak electricity spikes even in springtime. Here in Renewable World it’s cheaper to let 5,500 workers sit around for 30 minutes than pay for electricity. The company was paying 54% more for electricity than the year before.
Riding the Express Train to the Renewable Faraway Tree
The numbers are staggering. Australia is racing headlong to the glorious 82 per cent renewables target by 2030. The catch is that the national grid at the moment uses coal for 62% of its electricity. The opposition energy spokesman is calling it “lunacy”, which it is. To reach the land of sunshine and breezes, our grid manager, the AEMO, is theoretically going to close two-thirds of the country’s existing coal power generation in the next ten years.
To put this in perspective, since the last hot summer we’ve shut down Liddell Coal plant, and still haven’t fixed the coal turbine that blew up in Queensland two years ago. New renewable investment has ground to a halt when it clearly should be going gangbusters. No one wants to build new wind and solar plants until someone builds the 10,000 kilometers of high voltage lines to reach distant cheap windy real estate, and no one wants to live or farm next to those transmission towers, so the protests are fierce.
Decarbonising Australia’s fossil-fuelled electricity grid is proving slower and more costly than previously advertised, with reliability risks increasing as the exits of coal-fired power plants run ahead of cleaner and reliable replacement generation.
Nerves are frayed “We’re not having an honest conversation”:
Angela MacDonald-Smith, Australian Financial Review
Former Snowy Hydro CEO Paul Broad said, “the lights are going to go out” in a return to normal conditions after three mild summers and said politicians were not listening to the warnings about the risks around supply, while the industry was not speaking up enough.
“That’s our problem,” he said. “We’re not having the honest conversations and us in the industry we’re not speaking up.”
Mr Broad, who abruptly exited Snowy Hydro last year after a run-in with Mr Bowen, accused Victorian Energy Minister Lily D’Ambrosio of speaking “complete and utter horseshit” in her refusal to recognise the need for peaking gas power plants in Victoria as coal power exits the system.
He listed Ms D’Ambrosio among energy sector figures who would no longer take his calls as he tried to get the message through, including former Australian Energy Market Operator Audrey Zibelman.
We can’t even run a cement factory all day anymore:
Mr Bansal [the chief executive of Boral] told the Summit that Boral’s electricity price rose by 54 per cent in the 12 months to the second half of last year, and have not retreated, counter to expectations.
He said Boral had about 5500 “blue collar” workers who were being told to stand aside and do nothing for 30 minutes at a time when power prices made it too expensive to operate.
“At a certain price during the day, when the price goes up [to] a certain level, our manufacturing stops because we’ve worked out economically it’s actually better to have thousands of people waiting idle for the prices to come down then actually do the work,” he said.
“That’s a real issue we are facing every single day on 300 manufacturing sites across the country. So we are extremely nervous what that means.”
The chief at Boral pointed out that he’s not willing to sign up to 20 year electricity contracts because everything is so uncertain.
They still don’t understand the difference between reliable and unreliable power
It’s OK, the believers protest, Australia has added 20 gigawatts of solar.
“Australia has three-and-a-half-million solar systems installed and that represents around 20 gigawatts of potential output,” Westerman says.
“That’s more than seven Eraring power stations at full output and capable of meeting almost half the energy demand in the day when the sun is shining at its brightest.”
As if solar panels can be measured on the same page as a coal plant. For half an hour a day, on a good day, only in summer, and as long as the clouds don’t roll over, the peak output might be like seven coal plants. These people are crazy.
Australians should protest and shout, Leaving those in control in no doubt, Of the wrong that they did, In wrecking the grid, When the lights all start to go out.
The value of subsidies to wind power is falling, while the cost of erecting and operating these things has skyrocketed. The result is a complete collapse in wind power capacity investment in Britain, and elsewhere. The usual suspects are running a mile from projects that were (on paper) worth billions.
While the wind industry pretends not to worry about pedestrian matters such as profit margins, the bottom line is starting to bite back. To date – whenever the money looked like running out – the rent-seekers have simply dropped the begging bowl in front of the government concerned, scooped up another round of taxpayer-funded subsidies, and carried on.
The Brits under Boris Johnson went all in with wind power, at the expense of the reliable and affordable stuff. Now the chickens are coming home to roost, as Jeremy Warner explains below.
The real costs of wind power prove the sums don’t add up The Telegraph Jeremy Warner 30 August 2023
Someone get a grip. UK energy policy is once again coming apart at the seams, with growing doubts over whether net zero or even energy security goals can be met.
Only now are the true economic costs and practical difficulties of going carbon-free becoming fully evident, and it’s not a pretty sight. Yet still policymakers don’t seem to get it; either that or they are being deliberately misleading on the ease with which it can be delivered.
All pretence at “leading the world” in the application of renewables is meanwhile going up in smoke, as one-time champions pare back their ambitions for the UK market in the face of rising costs, more sensible planning laws, and better opportunities elsewhere. Rival jurisdictions, particularly the US and EU, are beginning to offer far superior incentives.
If you cannot beat them, do the opposite. Slowly, but surely, the Government is watering down its environmental agenda, which sadly but inevitably frequently clashes with the parallel goal of enhanced economic growth – the latest example being so-called “nutrient neutrality” water pollution rules which act as a barrier to more housebuilding.
Yet on paper at least, and indeed legally, the overarching environmental goal of net zero by 2050 – together with the staged targets set for getting there – remains sacrosanct, even though most practically minded people have long thought there is not a snowball’s chance in Hades of actually meeting it. A giant leap of faith in the transforming powers of technology is demanded to think it can be.
As if to confirm the gaping chasm between ambition and reality, the latest round of auctions for UK renewable energy licences, the outcome of which is due to be announced late next week, has plainly hit the rocks.
Similarly with the UK energy group SSE, which has said it will not be entering its Seagreen offshore development into the auction, citing a low, officially set, strike price, and dramatically rising costs.
Under pressure from the renewables industry, the Government has announced a slight increase in the promised subsidy below strike prices, but it’s unlikely to make a difference.
Presumably there are at least some bidders still in the running; even so, officials will struggle to get the capacity hoped for, putting in jeopardy the target of 50GW of offshore wind by 2030. Current capacity stands at just 14GW, so there is a way to go.
This in turn raises doubts about the Government’s separate target of complete decarbonisation of the electricity network by 2035. This, too, looks unrealistic. British energy policy is once more in a chaotic mess. It was ever thus.
As it is, policymakers have set strike prices so low that investors are struggling to see how they might make a return. No surprise that prices should be forced down like this, for the green energy transition is not just about saving the planet. It is also meant to deliver much lower energy costs.
This, too, is turning out to be a pretence. It’s true that in the past seven or eight years, the notional cost of renewable energy has plummeted. The price of offshore wind output has, for instance, fallen by around two thirds, from £100 per megawatt hour to less than £40. There you go, say ministers in response to net zero sceptics; it’s cheaper than coal.
Would that it was, but the claim is in fact a statistical illusion. The manufacturing, installation and maintenance costs alone have been surging since long before the war in Ukraine. To these we must also add the costs of upgrading the National Grid to bring the new sources of electricity from where they are generated to where they are used.
Littering the countryside with pylons is understandably running into local opposition. Billions may have to be forked out to compensate affected communities, or in finding alternative, more expensive, transmission routes. It could make HS2 look cheap by comparison.
But to gain a proper understanding of the real costs of wind, and to a lesser extent, solar, we need to factor in another of their characteristics – that they are intermittent.
In order to function effectively, the grid needs a constant balance between supply and demand; if the wind isn’t blowing, or even if it is blowing too strongly, thereby overloading the grid, there is a problem.
Lots of conventional backup capacity is required to deal with the shortfalls that result from intermittency – capacity that can be brought online quickly at the flick of a switch when needs arise.
The upshot is likely to be a high degree of duplication in generating capacity. This will obviously very considerably add to the costs of the renewable element. It’s disingenuous to say wind is cheaper than fossil fuels.
Potentially, storage could provide a solution to the intermittency problem, yet for the moment it doesn’t exist at the scale needed to do the trick. If Britain cannot guarantee to keep the lights on, nobody is going to want to set up shop here.
What about batteries? This may seem unduly pessimistic, but it stretches credulity to believe that they can ever really be the solution. Is there even enough lithium in the world to provide the level of battery power needed to supply the National Grid when the wind stops blowing?
There are alternatives, nuclear being the most obvious, but many environmentalists are as opposed to it as they are to coal, gas and oil, and here in the UK, policy on new nuclear capacity, as on much else, falls woefully short.
It is as much as we can do even to get the money-eating leviathan of Hinkley Point C up and running. Next comes Sizewell C, which scarcely promises to be much better. As Britain’s ageing fleet of existing nuclear power stations reaches the end of its life, merely replacing what’s closing down seems to be beyond us.
And to phase out the 80pc of UK energy demand currently satisfied by fossil fuels, we would need far, far more. Yet the Government continues to procrastinate. Shamefully, it is still faffing around with an international competition to decide who gets to build Small Modular Reactors, never mind how to finance them.
The last two auction rounds lulled the Government into a false sense of security on the economics of renewables. Both were hugely successful in attracting bidders at apparently highly competitive prices.
But things have changed. Having been ahead, Britain is slipping behind. Next week’s announcement on the outcome of the fifth round auction threatens to be a rude awakening. The Telegraph
The clueless Ben Marlow is back to normal, with this utterly naive article:
In the Marlow household, all it took was a couple of chillier nights for us to panic and swap the paper-thin summer duvets for something more robust, a move I instantly regretted after seeing the weather forecast for the next five days.
As a way of ensuring the lights stay on, it certainly beats firing up the country’s old coal power stations – the tactic so often previously employed. There’s a certain creativity to it too – not something you’d expected from an organisation that Octopus Energy boss Greg Jackson has accused of “a phenomenal failure to innovate”.
But more broadly, it’s another sticking plaster solution to the energy crisis, and a pretty primitive one at that.
Bills are still obscenely high and we need to wean ourselves off oil and gas. Yet it’s becoming increasingly clear that the costs of reaching net zero risks being prohibitively high, and No 10 continues to rely on a price cap that is acting as much as a floor on household bills as it is a ceiling.
But Marlow’s solution is to build more wind and solar, and spend £40 bn that we have not got on upgrading the grid infrastructure to distribute it:
If Claire Coutinho wants to be taken more seriously in the post than her predecessor, then she should start by trying to drag the Grid into the 21st century so that electricity supply can keep up with ballooning demand.
Isn’t the very threat of the lights going out in an advanced economy pretty firm evidence that the Grid is “not fit for purpose”, as Octopus’s Jackson has also claimed?
If you’re still not convinced, then perhaps it’s worth remembering that it takes seven years on average to connect a wind farm to the grid, while there are parts of London where it is impossible to build more homes because there isn’t capacity to support them.
In 2022, National Grid committed to a £40bn spending program on critical infrastructure over the next four years. Heaven knows it’s needed. Britain is moving to a modern digital economy in which electricity demand is expected to soar threefold by the middle of the century.
Yet, parts of the system were built in the aftermath of the Second World War. We need new connections and more modern transmission infrastructure, such as pylons and underground copper cables, otherwise hopes for 50 gigawatts (GW) of new wind and 70GW of additional solar power by 2030 will remain nothing more than that.
Apparently Mr Marlow has not managed to work out that the looming blackouts will be the result of shutting down tranches of dispatchable coal power, not a lack of intermittent renewable energy.
The commenters on the article seem to recognise this better than Marlow. For instance:
The fundamental problem is that our political class are hopelessly incompetent, economically and scientifically illiterate and completely corrupt.
They have committed the country to net zero lunacy without any referendum or mandate which will result in economic suicide and our transition to third world status.
Anyone impartial with any sense that has looked into it can see that renewables are intermittent and therefore unable to ever provide the reliable base load power required for a 1st world nation. Energy storage on the scale required using batteries or hydrogen is not and will never be viable.
Therefore the only realistic solution is to focus on nuclear, gas and coal based power to provide reliable base load power at sensible cost.
The only conclusion one can reach is that our politicians are effectively captured by a hostile foreign entity and are deliberately trying to destroy the future of our nation and its people.
Today’s Guardian online includes an interview with Jonathan Brearley, the Chief Executive of Ofgem, a position he has held for just over three and a half years. Ofgem, by the way, is an acronym which stands for the Office of Gas and Electricity Markets. It sits in a pivotal position, given its role (in words I take from its website to “work to protect energy consumers, especially vulnerable people, by ensuring they are treated fairly and benefit from a cleaner, greener environment.” More specifically, Ofgem says:
We are responsible for:
working with government, industry and consumer groups to deliver a net-zero economy, at the lowest cost to consumers
stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable
enabling competition and innovation, which drives down prices and results in new products and services for consumers.
And how exactly is all that going? According to the Guardian (and for once I agree with them), it probably could be going better (much better):
In the past two years, wholesale market prices reached record highs, pushing up the number of households living in fuel poverty to almost 7.5m and causing the collapse of almost 30 energy suppliers. The crisis triggered one of the biggest government bailouts since the financial crisis as ministers handed £78bn to households to help pay their bills…
…Today, millions more households are in fuel poverty, vulnerable bill payers have been forced on to prepayment meters, small businesses have fallen prey to predatory energy brokers, and Britain’s creaking electricity grids face decade-long queues of renewable energy projects waiting to connect to the power system.
Britain’s power grids, which are regulated by Ofgem, have warned renewable energy developers to expect a 10-to-15-year wait to connect their projects to the network.
So it’s not going terribly well. The big question, it seems to me, is what is the cause of this catalogue of failure? Sadly, the Guardian interview doesn’t even scratch the surface. The closest it gets to analysing what has gone wrong is talking about the problems Mr Brearley has had to face since taking up his post:
Since then, the industry has been roiled by the impact of the Covid pandemic and the energy market aftershock following Russia’s invasion of Ukraine.
I don’t deny that both of those hugely problematic events have played their part in causing problems for UK energy suppliers and consumers, but no reasonable analysis could attribute all of the issues identified by the Guardian to those two events alone. If the Guardian isn’t up for a detailed dig into the problems and what caused them, presumably Mr Brearley is, given that on any reasonable definition, it’s his job to do so. And indeed he is. His speech at the Institute for Government on 24th January 2023 arguably painted an even bleaker picture than the Guardian:
I think we should acknowledge how difficult it is for many, many households and businesses, to pay for the energy they need.
Our data shows that, from April, households on a median disposable income will spend 10% of that on their energy bills, and those relying on the state pension will spend 29% – that is a truly extraordinary amount of our household budgets.
I speak to customers regularly, and even with the Energy Price Guarantee and Energy Bills Discount Scheme, I know that the scale of the challenge for many people out there remains enormous.
For example, a few months ago I spoke to a lady who has a chronic condition. That condition often leaves her in pain if it is cold, yet she often has to rely on a hot drink or a blanket because she cannot afford to heat even one room.
I have also spoken to people who prefer to be in hospital rather than at home, because it least in hospital they know they have access to the energy and the food that they need.
We also consult regularly with business member groups to hear about the challenges they face.
For example, recently we heard from a group of theatres whose long-stand utility contract ended last October. Their new forecast, before government support, was of a roughly 450% rise in their electricity bill and rise 725% for their gas bill. And when they tried to find alternative quotes, it was difficult to do so for a whole range of issues, including a very different perception of credit risk.
Now sadly, these stories are all too common across Britain today.
Welcome to Britain in 2023. Fortunately Mr Brearley understands his responsibilities very well:
So as the energy regulator, alongside government, and the industry, it is our responsibility to [be] doing everything we can to support consumers and businesses through this very difficult period.
And he has a plan! Unfortunately, he seems to be fully signed up to the net zero agenda, which I suppose isn’t surprising, given his CV:
…he was Director of the Office of Climate Change, a cross-government strategy unit focussed on climate change and energy issues, where he led the development of the Climate Change Act…
I don’t deny Mr Brearley’s qualifications for the job (e.g. he “ led Electricity Market Reform as the Director for Energy Markets and Networks at DECC”) but the fact that the Chief Executive of Ofgem seems to be a net zero enthusiast is as disappointing as it is inevitable. He probably wouldn’t have got the job otherwise.
And so I suppose it is equally inevitable that the first lesson he says he has learned from the “crisis” is that we as a country are most disadvantaged by “reliance on international gas markets that, bluntly, have been manipulated by an aggressive state” with the result “that geopolitics is playing a stronger hand in this country’s energy decisions than we had planned for, or would like it to.” The solution?
…we should move as rapidly as possible away from a system highly dependent on international gas, but also move away from our current market, which means that gas affects almost all of our energy use.
Simply put, we need to transition towards more homegrown, secure, and renewable sources of energy supply, and design an electricity market that allows us to benefit from that transition.
The difficulty with that, as the more alert among you will have noticed, is that the concluding paragraph is oxymoronic. It is simply impossible to achieve all the things that are summed up in one short sentence – homegrown energy, which is also secure and more renewable, and allows us to benefit from that change. The thing is that that renewable energy, by its very nature is unpredictable and unreliable, and leads to shortfalls in energy supply, often when demand is at its greatest, i.e. in the middle of winter, when the sun barely makes it over the horizon and the country can be becalmed in bitterly cold conditions under an anticyclone. What do we do then?
Well, we can do what we do now, and rely on gas generators to ramp up at short notice to fill the void. But that involves running two energy systems in parallel, with the more reliable of the two (gas) being operated sub-optimally, and therefore very much more expensively. That might give us security (or it would if we were allowed to extract our own gas), but it wouldn’t offer any financial benefit at all – quite the contrary.
Or we could trust to good neighbours and assume that the ever-growing web of interconnectors will fill the void. The problem with such a policy, however, is that it depends on the anticyclone over the UK not also sitting over western Europe, so that there is actually some surplus electricity for us to draw down, It also depends on our neighbours being good neighbours and not seeking to rip us off financially when we’ve got ourselves into a bit of an energy shortfall. And finally, it is at risk of an “aggressive state” seeking to damage the interconnectors (as, indeed, they might seek to damage the power cables bringing the offshore wind power onshore). This is also an expensive option and, worse still, it is doesn’t meet the need for secure energy supplies.
And it keeps getting worse. Further on in his speech Mr Brearley lays out quite clearly (let nobody say they didn’t understand what the implications are) the extent of the engineering challenge (though he barely mentions the associated costs) involved in achieving this undesirable and dangerous energy policy. We’ve heard it all before, of course, but it bears repeating, since some people (who should know better) seem remarkably insouciant as to what’s involved.
To move away from our dependence on the international gas market and build the secure, decarbonised energy system that we need as rapidly as possible, and to meet the government’s target to achieve a net zero power system by 2035 and reach net zero by 2050, we will need to build new energy infrastructure at a pace not seen for decades.
When you look at our history, the period immediately after the Second World War most closely resembles the pace and scale at which we will need to build.
From 1950 to 1970, Great Britain’s electricity generation capacity expanded around 4 fold.
Since then, the system has been largely stable in terms of our networks, and regulation has been designed to maintain that system and drive efficiency in its maintenance and in the incremental build that has been needed.
But to meet the scale of future energy demand between now and 2050, we will again need to build out our infrastructure – onshore, offshore, and connections to other countries – at an extraordinary pace, not seen for over half a century.
Instead of pausing there, and asking whether this really is such a good idea he goes on to repeat the mantra of the Skidmore review to the effect that this, as well as being a huge challenge (too right it is) is also “an economic opportunity”. He goes on also to repeat the claim regularly made in this regard that it will cost us more if we delay. This is a claim I’ve heard many times, though nobody has ever explained it to my satisfaction – indeed, often (as here) the claim is simply made without explanation. I assume that the “logic” is that we need to do this because if we don’t the costs of climate change will be much greater. Of course, if that is what underpins the claim, then it is utterly fatuous, since even if the UK achieves net zero it will make no measurable difference to the climate unless the rest of the world follows us off the cliff.
And how is this acceleration to be achieved? Well, making it easier for planning consents to be obtained more quickly (presumably even in the teeth of local opposition) is certainly a key part of the plan:
The next generation of system planning will need to look at net zero targets for 2035 and 2050 more widely, and encompass investment across the electricity and gas grids, including the planning for hydrogen infrastructure…
…So we are reviewing the institutional framework to set a clear vision for local governance arrangements…
The link between the price of gas and electricity pricing is also made: “the gas price crisis revealed that in the short term, consumers may not be getting the full benefit of the existing renewable and low carbon plant.” [sic] Mr Brearley is under the impression that moving “all renewable plant on to the existing contracts for difference regime… would stop this happening and give consumers access to lower electricity prices.”
As he points out, Mr Brearley led the Electricity Market Reform, so he certainly know more about this sort of thing than I do. I trust, therefore, that he is aware that the Contracts for Difference regime isn’t going so well just now, and that in the fifth Allocation Round the government has just increased the budget, and that renewables energy companies have taken to postponing their take-up of existing “contracts” because they don’t regard them as viable:
Orsted has delayed for a second year its contract to supply consumers with cheap energy from the world’s biggest offshore wind farm and has warned that it could do so again, enabling it to cash in on higher market prices instead.
Hornsea Two, comprising 165 turbines about 55 miles off the coast of Yorkshire, has been fully operational since last summer, generating enough electricity to power 1.4 million homes.
Under a government contract awarded in 2017, Orsted was due to supply the power to energy bill-payers at a fixed inflation-linked price worth just under £84 per megawatt-hour today, with the contract for the first phase of the project due to begin in 2022. However, the Danish state-backed power group confirmed last week that it has now taken advantage of a loophole to delay that contract start date for a second year, until 2024, enabling it to sell the power for higher prices instead…
I find it worrying that the conclusion arrived at is this:
In conclusion, the gas crisis has strengthened the need for pace in changing our energy system to meet customer needs and to meet our low carbon goals….we will have a robust path to a better, more secure and low carbon energy system that meets this country’s needs.
The elephant in the room, of course, is net zero, and the obsession with “de-carbonising” the UK’s electricity generation. I have seen no plan for reducing reliance on gas back-up, and thus for reducing, rather than increasing, costs. I have seen no persuasive plan for guaranteeing that the country won’t face blackouts if it makes itself reliant on unreliable and unpredictable sources of electricity generation. I see no convincing plan as to how we will cope if the interconnectors between the UK and Europe are cut, or if the cables bringing electricity from Scottish islands and offshore wind farms to the mainland are cut. While the move away from gas may be justified because buying gas on the international market makes us vulnerable to bad actors, not much thought seems to have been given the extent of our vulnerability when relying on undersea cables and interconnectors.
In fairness to Mr Brearley, who can’t be held responsible for the mess that Ofgem has made over the years, and in fairness to Ofgem itself, it is faced with a regulatory framework imposed on it by Parliament which is full of contradictions and makes little sense. Ofgem is governed by the Gas and Electricity Markets Authority, which derives its powers and obligations from a plethora of statutes, such as the Gas Act 1986, the Electricity Act 1989, the Utilities Act 2000, the Competition Act 1998, the Enterprise Act 2002 and various Energy Acts. A useful summary can be found here though I cannot be certain that it is completely up to date.
What, for instance, is to be made, of section 4AA sub-section 1(a) of the Gas Act 1986 (as amended by the Energy Act 2010)? It obliges Ofgem both to protect the interests of existing and future customers by reducing gas-supply emissions of targeted greenhouse gases (as defined in the Climate Change Act 2008) and in the security of the supply of gas to them. Similar provisions apply (mutatis mutandis) with regard to the supply of electricity under section 3A of the Electricity Act 1989 (as also amended by the Energy Act 2010).
How about subsection 2 of the Gas Act 1986? Ofgem has to have regard to “the need to secure that, so far as it is economical to meet them, all reasonable demands in Great Britain for gas conveyed through pipes are met” and “the need to contribute to the achievement of sustainable development”. And all the while, subsection 5 requires them to carry out their functions in the manner which it considers best calculated “to secure a diverse and viable long-term energy supply”. Again, similar provisions apply under the Electricity Act (as amended), including that critical obligation “to secure a diverse and viable long-term energy supply”.
If there was no legal obligation to achieve net zero and no expedited plans to “decarbonise” the electricity generation system in accordance with carbon budgets, then Ofgem’s job, and that of the National Grid and wholesale energy suppliers and retailers would be massively simplified and cheapened. If I were in charge of Ofgem and/or the National Grid, that is a message I would be delivering repeatedly and urgently to Parliament. Unfortunately, as things stand, politicians and those charged with implementing their madcap plans seem to be holding hands while the elephant in the room remains invisible.
What a delight to read an article written by an actual energy expert, instead of some dopey environmental reporter!
The Royal Society of Chemistry describes hydrogen as “a colourless, odourless gas”. It’s up there at the top if the Periodic Table: Group 1, Period 1. It is the most abundant gas in the universe, but on Earth it is mostly found bound with oxygen in the form of water – very little hydrogen gas is present in the atmosphere as it quickly escapes the Earth’s gravity and floats away into outer space.
Yet this ephemeral gas is touted as the solution to the great looming problem of renewable power – carbon free energy storage at scale. The obvious issues with relying on intermittent wind and solar energy can be solved by using excess renewable energy on sunny, windy days to produce hydrogen gas. This can then be stored for use on less windy days, whether that be by direct combustion to generate heat, or to generate electricity, or in other industrial uses.
The different ways in which this invisible element can be produced have been assigned different colours: green, blue, brown, yellow, turquoise and pink hydrogen. Also, white hydrogen. Helpfully, there is no universal naming convention so hydrogen colour definitions may change over time, or between countries.
Green hydrogen is the “best” hydrogen, made by using that surplus renewable energy to electrolyse water, splitting it into its components of hydrogen and oxygen, emitting zero carbon dioxide. Some say yellow hydrogen if solar power is used. This is currently a very expensive way to make hydrogen and represents less than 0.4 percent of current hydrogen production.
Blue hydrogen is produced from methane – the “natural gas” currently piped to our homes for heating and cooking – using a process called steam reforming, which combines the methane with steam to produce hydrogen but also carbon dioxide which then needs to be captured and stored. The carbon capture part is the difficulty, with only one percent of existing projects including this capability.
Grey hydrogen is essentially blue hydrogen but without the carbon capture part. Almost all the hydrogen currently produced is made by this method.
Black and brown hydrogen are made from coal (black) or lignite (brown) and these methods emit even more carbon dioxide than grey hydrogen. This type of hydrogen is obviously not going to form part of the net zero pathway.
Pink hydrogen is generated through electrolysis powered by nuclear energy – this is also referred to as purple or red hydrogen. Like green hydrogen, this is zero-carbon but expensive.
Turquoise hydrogen is made using a process called methane pyrolysis to turn natural gas into hydrogen and solid carbon. This relatively new process is yet to be proven at scale, but the production of solid carbon would obviously reduce the challenges associated with carbon capture and storage.
Finally, white hydrogen is naturally occurring hydrogen, found in underground deposits. It might perhaps be extracted through fracking, a process already effectively banned in many places. It has been talked up for decades but, according to the National Grid, there are still “no strategies to exploit this hydrogen at present”.
Apart from the black and brown hydrogen this all sounds lovely. Quite literally, one can picture a gleaming future where horrible, sooty, carbon dioxide (because we all picture it as being sooty despite the fact it’s also colourless and odourless) is replaced with a beautiful rainbow of lovely, clean hydrogen, whose only byproduct on combustion with oxygen is water.
However, it is far from being that simple, or that clean. To begin with, hydrogen is one of the most explosive and flammable gases – the airship Hindenburg was filled with it – but its real challenges relate to the fact its molecules are very small and as a gas it has very low density. This means that hydrogen is hard to contain and large volumes of it are needed to generate much energy. You need around three times the volume of hydrogen as compared to methane to get the same amount of energy.
Tiny hydrogen molecules fit through tiny gaps, so structures designed to contain methane such as pipes, joints, boilers and cookers, and gas storage facilities such as tanks or geological formations (salt caverns or depleted gas fields) allow hydrogen molecules to escape where methane molecules would not. Tests suggest that the safety concerns this creates are mitigated by the lightness of hydrogen which means it quickly dissipates, but leakage also worsens the economics of using hydrogen as an energy store.
In other words, you need to use up almost a third of your gas just moving it from A to B.
Hydrogen is also hard to move around. To get gas to move through pipes it has to be compressed and pushed along using compressors. This process requires energy: the losses in moving hydrogen through pipes are ten times greater for hydrogen than for methane: up to thirty percent. In other words, you need to use up almost a third of your gas just moving it from A to B.
Hydrogen can also cause the metals in pipes and storage equipment to become brittle leading to material degradation and potential safety issues. Special materials or coatings may mitigate these effects, but they add further complexity and cost to an already complex and expensive system.
In fact, all of this is expensive. The infrastructure for hydrogen storage does not yet exist, neither for the most part do the production facilities and they will cost billions of pounds to build. Then the underlying cost of storing hydrogen is probably at least four times that of storing methane. Huge amounts of energy are lost in each stage of the process due to the fundamental properties of hydrogen.
Quite simply hydrogen is one of the worst substances you could choose for this purpose, but, because you can burn it in air without creating carbon dioxide, it has been hailed as the answer to net zero dreams.
Like its cousin, carbon capture, hydrogen energy storage is a backfill technology – a silver bullet that will enable the otherwise unlikely net zero target to be met, but neither actually exists yet. Both are square pegs which people are desperately trying to force into round holes.
Hydrogen of whatever colour is a hypothetical solution to the challenge of net zero, and an extremely expensive one at that. And this goes to the heart of the net zero problem: it relies on developing a range of solutions that are easy to say but difficult and expensive to do.
Kathryn Porter is an independent energy consultant. She holds a Master’s degree in Physics and an MBA, and is an associate member of the All-Party Parliamentary Group for Energy Studies executive council
This year’s National Grid’s Future Energy Scenarios has been released, and as before fails to address the real problems facing the pursuit of Net Zero.
As usual, there are four scenarios. The most optimistic is called Leading The Way, which has as much chance of being achieved as England winning the next World Cup. The most realistic is Falling Short, which only cuts emissions by about half come 2050.
But I’ll concentrate on the other two:
As before, I will focus on 2035, as nobody can predict what will happen in 30 years time.
Consumer Transformation looks a highly unlikely outcome. It assumes, for instance, that there will be 12 million heat pumps installed by 2035; there is simply no prospect of this unless the gas boiler ban takes effect a decade earlier. It is also unlikely that consumers will drastically alter their habits in terms of demand side response, or be willing to spend thousands on insulation.
System Transformation is slightly more realistic, but not much! This assumes 3 million heat pumps by 2035, but with an annual rollout of about 160,000 as soon as 2025, again extremely implausible. Because of this slow take up of heat pumps, the scenario assumes most heating will use hydrogen boilers, which in turn raises a separate question – where will this hydrogen come from? The FES answer is mainly from steam reforming natural gas, in theory using CCUS.
And in turn, this raises two more issues:
1) Steam reforming uses much more natural gas than you would use if you burnt it in the first place. It is therefore extremely expensive and inefficient.
2) Even with CCUS, there are still some emissions, as the process cannot capture all of the carbon dioxide, only about two-thirds.
Under ST, we will still be consuming 581 TWh of natural gas in 2035, compared to 986 TWh currently. This clearly makes a nonsense of the Labour Party’s plan to stop all new North Sea exploration.
But now we come to the crucial question of what our power system will look like in 2035. Below are the capacity assumptions in FES:
2035
GW
Current
CT
ST
Interconnectors
7.40
19.15
15.90
Fossil fuel and CCS
35.36
24.11
27.39
Solar
0.04
4.93
2.61
Offshore Wind
12.75
78.27
69.84
Onshore Wind
7.94
20.83
20.83
Other generation
11.06
16.62
15.88
Storage
3.34
21.15
14.35
Dispatchable
40.73
43.26
Peak Demand
98.00
73.00
. .
* Others includes nuclear, bio, BECCS, hydro and hydrogen
In both scenarios, dispatchable capacity (excl I/Cs) is woefully short of what is needed. Even with interconnectors, a large shortfall remains, despite the retention of most of our existing CCGT fleet.
Storage, according to the FES, will only be about two hours worth on average, so only enough to manage short term peaks in demand. Solar, as we know will produce next to nothing in winter; ( the figures quoted for capacity are, by the way, grid scale installations, and exclude embedded local solar farms).
At a push, you could possibly count on getting a minimum of 5% out of the wind capacity, even on windless days, about 5 GW. But this still leaves us well short in both scenarios.
Sure, we might be able to reduce peak demand by maybe 10 GW, by smoothing out daily demand. But on the other hand. You would need to build in a reserve of at least 20 GW, to cover for plant outages etc.
The only way to ensure security of supply with these increased electrification scenarios would be to treble our existing CCGT fleet, if necessary modified to burn hydrogen. In the longer term, a tranche pf new nuclear might help to plug the gap, but that would likely take many more years to come about.
Every year I raise this problem. And every year a new FES comes out, which totally ignores the disaster staring us in the face. There seems to be a naive belief that all of that wind and solar capacity will somehow always provide the power we need. Is it just me? Am I missing something?
It really is a case of the Emperor having no clothes!
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Global warming, climate change, all these things are just a dream come true for politicians. I deal with evidence and not with frightening computer models because the seeker after truth does not put his faith in any consensus. The road to the truth is long and hard, but this is the road we must follow. People who describe the unprecedented comfort and ease of modern life as a climate disaster, in my opinion have no idea what a real problem is.
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