Thursday, 25 September 2008

Watching the Lights Go Out (new series)


So the fat lady has sung (as predicted), and EDF wins BE. Here are a few quick observations before we get down to business:


- you have to be pretty gullible (=G.Brown) (brother of A.Brown) to imagine EDF’s ‘plans’ to spend £10 billion building 4 new nukes add up to a bankable commitment (though hope springs eternal, and even Robert Peston was in danger of falling for this one)

- buying BE is a way of buying the UK’s vote for France’s plan to get everyone else to pay for its decommissioning bill

- how handy that the Competition authorities are being invited to shut their traps this month ! (or they might notice that the ‘hunting party’ of BE, EDF and Centrica between them constitute around a third of the UK electricity market, by some measures)

- and how handy also that today the Environment Agency pronounces that “no new coal-fired power stations should be built unless they can capture and store carbon emissions” (which, of course, they can't, for a long while yet)

* * * * *

However, the real issue is: when will the lights start going out ? – bearing in mind that EDF’s first new UK nuke won’t be online until 2017 at the earliest, and renewables are a bad joke.

This is starting to look more pressing than I and others had previously thought. A while ago I said 2015 was the focus of attention, but that was before (a) the monkey-business of May this year, and (b) National Grid posted three Notices of Inadequate System Margin (NISM’s) this month alone. I realise few C@W readers will know what a NISM is, but suffice to say there’s been nothing like this since the catastrophic heatwave of July 2006. On previous occasions (of which there have been a couple) when as many as 2 NISMs have been posted in a single month, National Grid have felt obliged to explain themselves in detail; and maybe they will do so again.

In the meantime, a summer of record high wholesale electricity prices is being followed by unprecedented forward prices for this coming winter. Even more significantly the wholesale electricity price, for several years a simple pass-through of the gas price, has now taken off on a stratospheric track of its own (oil and gas prices have softened recently), strongly suggesting the entire UK power system is indeed uncomfortably tight.

We shall watch this one closely: indeed, we may even install this handy widget

ND

24 comments:

patently said...

I was a wee youngster during the last Labour Government. My only clear memory of it was that the lights kept going out.

Plus ca change...

Blue Eyes said...

ND isn't part of the problem that we have lots of capacity which isn't allowed to be used because of emissions restrictions? Surely if we started to properly run out the government could just suspend the restrictions until the new stations are online?

Bill Quango MP said...

Having just read your piece I am very concerned that the power could go off at any mome

dearieme said...

The Party of the Industrialised Masses will have led us into a deindustrialised state; what the journalists like to call "ironic".

dearieme said...

Or perhaps not; it always was the ambition of Labour to stop industry working - lack of electricity may achieve what strikes couldn't.

Nick Drew said...

BE - not really, because the power generators very effectively pass through 100% of the market price of the C02 allowances (which is why giving them free allowances results in a windfall for them: but the eurocrats didn't realise that's how markets work. Honestly, in Germany they were absolutely gobsmacked when it happened ...)

And the plants that are to be closed because they fail to meet sulphur & other emissions standards are doomed already - too late to extend their lives economically.

open question over whether you could squeeze a bit more life out of the nukes, our visitor Mr W Wendland has often commented here on this in the past

Nick Drew said...

dearieme, mr patent - yes, t'workers have an ambivalent attitude to keeping things going, don't they. Lenin was quite keen on electricity ...

Mr Q - yes, a very effective form of censorship, I expect the chinese use it sometimes, and the North Koreans use it 23 hours a day ...

hatfield girl said...

"...the organization of industry on the basis of modern, advanced technology, and on electrification which will provide a link between town and country, will put an end to the division between town and country, will make it possible to raise the level of culture in the countryside and to overcome, even in the most remote corners of the land, backwardness, ignorance, poverty, disease, and barbarism."

This isn't a vision that's going to be fulfilled in the UK then?

Mark Wadsworth said...

Did you link back to this particularly prescient post?

Give yourself a pat on the back for that one!

Nick Drew said...

only what can achieved by bicycle along pot-holed roads, HG

oh, and I believe a bicycle dynamo can power a small electric lamp ...

thanks, Mark prescience a speciality (on a sort of Law of Averages basis: you spout enough stuff, some of it must be right)

nomad said...

So, can you provide an estimate of when we'll all be able to join together singing this:

www.youtube.com/watch?v=vzlFaY0s_QI

Letters From A Tory said...

The Competition Commission really has gone on holiday, hasn't it. Banks, utility companies - are there any mergers the government will let them stop?

Nick Drew said...

nomad - yes it does have something of the feel of an (undeclared) war, doesn't it ?

letters - slippery slope: once the bastards get into the swing of bravura unilateral gestures and sweeping illegalities, there'll be no stopping 'em

I strongly suspect the eurocrats will be marvelling at the Paulsen manoeuvre and lining up some of their own - on banking, internet control, environmental ...

but hey ! it's Friday & I'm off for the w/end

Guthrum said...

One way of dealing with these pesky bloggers, turn off the power

roym said...

I guess there arent too many fans of feed in tariffs here, but we can make inroads in other ways

http://www.guardian.co.uk/technology/2008/sep/25/greentech.alternativeenergy

AntiCitizenOne said...

I advise purchasing a large UPS for the computer and maybe a generator for the rest.

Before we get black-outs we'll get brownouts which are very damaging.

Old Holborn said...

I'm buying a wind turbine. Not those poxy B&Q things either. A big fuck off seagull chopper one. You can get them dirt cheap in Denmark and Germany

CityUnslicker said...

ACO - A very good piece of advice. Protecting against surges etc will be one of the first things we all encounter.

OH - sod that, we will just have to rig up the old 4x4's to the mains; easy.

rwendland said...

> EDF’s ‘plans’ to spend £10 billion building 4 new nukes

Only if Saunta Claus helps!

Over in the land of the collapsing banks, a pair of AP1000s seems to be priced at $17 billion (~£9.2 billion), though that does include $3 billion for transmission upgrades - Progress Energy’s estimates for Florida.

An AP1000 only produces 68% of the leccy of an EPR, so extrapolating MWe to the costs of two EPRs makes, hmmm, £13.5 billion - a little short there.

So lets assume someone else picks up the tab for new power lines, extrapolating again, £11.2 billion:

(1650 / 1117 * 14) / 1.85 = 11.18

OK, allow a little for superior French engineering and more efficient UK contractors, and some economies of scale. Maybe 2 EPRs for the £10 billion in real money, rather than marketing pounds.

Richard Elliot said...

I read that a small carbon capture coal fired power station has opened in Germany. Is it still a long way off from being viable on a larger scale?

Nick Drew said...

guthrum - yes, the buggers evidently nailed Mr Quango a few comments earlier

RoyM - feed-in tariffs are fine, just not artificially high ones ! intermittency is costly to the system and must be discounted accordingly. Same principle for tidal or wave power - if it washes its face, let it join the party, if it wants an ongoing subsidy, show it the door

Mr W - thanks for that summary, you are clearly correct (and the market for specialist steel goes on firming ...), even before we finger the EDF 'plan' as being empty gesture

Nick Drew said...

Richard - BP have had a CCS set-up in Algeria (and not small, either) for quite a while, it works fine

and also on the optimistic side, a very high proportion of coal-fired power plants are fairly close to geology suitable for C-storage (which is not a coincidence - you build power stations as close as you can to coal-bearing strata)

and loads of oil cos have been injecting CO2 into oilfields for decades (to increase recovery of oil), it's not difficult

but unless (like these existing schemes)it gets you more oil, it is COSTLY ! and (as discussed here and other places you can link to from that post) the big players will demand big subsidies ! in which case, as I said above to Roy ...

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