Saturday 24 September 2011

From the Electricity Front

The time-bomb is ticking but we are no nearer a viable plan for meeting our future electricity needs.

(1) SSE pulls out of the nuclear game. Well of course they
do. And it's a cert that neither E.on nor RWE will be up for it either any more, given the pounding they are getting in Germany and their well-publicised shortages of capital; Centrica have voiced their (very sensible) doubts: which just leaves EDF, and the depleted GdF/Iberdrola JV now that SSE have deserted them. I could just about imagine EDF approving one new UK nuke in the next 2-3 years, if Crapper Huhne's new Capacity Payments scheme (due to be published later this year) attracts them sufficiently.

Now Huhne was hoping for 10 new nukes. 'Perhaps one, maybe' looks a bit thin in that context. There comes a point, and it may not be long now, when the required 'run-rate' of new investment becomes plainly infeasible. Actually, it is already, but not quite obvious enough yet, it seems.

(2) Miliband plans to re-introduce the Pool ! This is a real throwback - can nationalisation or the CEGB be far behind ? (An historian writes: the Pool, 1990-2001 was an intermediate step between the initial break-up of the CEGB's monopoly and the introduction of full bilateral competition in wholesale electricity by, err, Peter Mandelson, who did at least get something right. I may have played a small part in this ...) The Pool was rife with gaming and distorted price signals, and its abolition was followed by a marked fall in prices (and, in consequence the, *ahem*, bankruptcy of British Energy).

Still, no-one understands markets, so perhaps there is some rhetorical mileage for Miliband in this, who knows? Coalition 'energy policy' is so dire that we can hardly complain.

He is of course right that people are angry about energy price rises. Harnessing that for political purposes, whilst simultaneously trying to promote 'decarbonisation', is enough to defeat a medieval schoolman. It requires some fairly heavy-duty doublethink and since the departure of the Blairite masters of mendacity, I don't see anyone equal to the task. Certainly not Huhne.



it's grim said...

I can't seem to find anything on the Shale gas find oop north, why is this being kept quiet or doesn't it fit in with the politicians and "green" energy.

Nick Drew said...

it's probably because the world at large has no concept of how big 200 TCF is

(it's certainly not because the only topic of conversation is the financial meltdown...)

the greenies & nuke-wallahs know how significant it is, though, and all hell will break loose soon enough

Electro-Kevin said...

Nick - Give the greenies exactly what they want:

A cold, austere island with fuck all on it and which they can WALK end-to-end in a day.

If you want to sum up what's killing this country:

A disproportionate amount of say and a disproportionate amount of influence given to loud minorities.

Anonymous said...

Whatever happened to the severn barrage?

Anonymous said...

Always find your comments on energy very useful. As an ex-nuclear power supplier, Dieter Helm was always rolled out as the leading expert. Who should we be looking at now? (Assume CH's advisers are out!)

Nick Drew said...

Kev - another of your excellent solutions, you are on a creative roll

anon@3:16 - Gov't decided the big version (7 GW or so) was not going to get state backing: but it never goes away and someone will always be hatching more plans

anon@3:50 - well thank you kindly, sir/madam: you can come again. As it happens I didn't used to see eye-to-eye with Prof Helm who, as you say, was often wheeled out. But just recently he's become what I would call realistic, & we seem to be in agreement rather more - see this, for example - which is bad luck for him because it means the gov't won't be rolling him out at all any more

David MacKay is pretty good for level-headed mainstream stuff

unfortunately there are loads of more-or-less plausible nutters and extreme vested interests on all sides of the argument(s)

my interest is strictly as a Consumer ! (and of course I am definitely not a nutter, pwff, certainly not)

Laban said...

Can we have some nuclear reactors and more gas before deciding to wreck

a) one of the most beautiful and little-known chunks of the UK in the Severn Estuary. Few make it to the shores, but watching the tide roll over the sands from, say, Lydney Harbour wall, is quite wonderful.

b) the amazing Severn Bore, a natural wonder first recorded by the Romans

it's grim said...

Seven Estuary power project will never happen just like the Mersey one and the Morecombe bay one, the RSPB and all the other nutters like save the trees nutters have too much say unlike us mere mortals who live and work and have no say and interest are more computers and gardening than watching fkin birds through glasses.

Budgie said...

"SSE pulls out of the nuclear game. Well of course they do."

"Of course"? To "invest" in Wind Factories? SSE must be mad. Nuclear may be more expensive than gas (especially with the shale gas developments) but it is a lot cheaper than Wind factories (which always needs backup).

ND, you won't get the shale gas you dream of - the Greenies will see to that. The problem is that if Nuclear isn't supported (as well, by people like yourself, and others) we will be left with a lot of windmills (see SSE) and not much else.

The Greenies are literally irresponsible: if we don't fight for Nuclear, we won't get (enough) shale gas. That's politics.

rwendland said...

ND, I'd be surprised if EDF go for one UK nuc. Zero or two would be my guess. They claim significant cost savings from building multiple nucs, with overlapping build phases so teams repeat the same work learning and improving.

If the French banks get into serious Greek trouble in the next few months, that seems to limit how the French govt can "influence" low cost finance to go to EDF for this, excepting perhaps complete nationalisation.

rwendland said...

Laban, grim, Budgie, you need to get with the latest cost estimates.

Seven Estuary power would be so expensive, it seems near impossible this will happen anytime soon.

It's now widely accepted good onshore wind sites makes cheaper leccy than nucs, in the UK and US. So SSE is going with the money.

The May 2011 levelised cost estimates from the engineering consultancy Mott MacDonald seems pretty sound on low carbon generation costs (when deployed in good locations):

Onshore wind: 8.3p/kWh,
Nuclear: 9.6p/kWh,
Gas with carbon capture: 10.0p/kWh,
Geothermal: 15.9p/kWh,
Offshore wind: 16.9p/kWh,
Energy crops: 17.1p/kWh,
Tidal stream: 29.3p/kWh,
Solar PV: 34.3p/kWh,
Tidal barrage: 51.8p/kWh.

Budgie said...

rwendland, you are, of course, wrong even on the figures you have presented.

Wind cannot be installed on its own: it needs either Gas (say) backup or some form of storage, both of which cost. So on your figures ....

Wind (+ Gas backup): 18.3p/kWh
Nuclear: 9.6p/kWh

One strategic advantage of Nuclear is that it does not need vast fuel storage, as do Gas, Coal and Oil. So SSE is mad, as is Huhne.

Electro-Kevin said...

We can, of course, cut population levels to lower consumption.

Somehow unlimited immigration doesn't factor in any estimate (or greenist argument) therefore all figures and exhortations are bogus.

I'm bothered that refugees from the PIIGS nations will be headed this way in unprecedented numbers with full entitlement to remain here.

I'm also bothered about the Alzheimer's time bomb about to hit us. People kept alive bodily into their 80s/90s without being kept alive mentally. A huge commitment of resources.

There are going to be some horrible decisions to be made and we will be judged by future historians.

Can we have adults in charge please ?

Nick Drew said...

Mr W - thanks as ever for input. If it's 2 or 0, the answer must surely be 0. (BTW I saw that one of the banks or rating agencies, forget which, has reclassified EDF recently as a state enterprise for credit rating purposes ... works nicely for some purposes, not for others!)

Budgie - haven't dived into the small print of the MM methodology, which may cover the points I am about to make: but remember that nukes are (a) baseload, therefore also requiring gas to provide flexibility; and (b) big & ugly: when they trip (often at nil notice - even wind gives you a few hours' warning)) you need large-scale 100% back-up in very short order

and nukes need to hold inventory of this & that, too

in principle I have nothing whatsoever against nukes, BTW - only against subsidies, particularly of the hidden kind

Kev you are on excellent form just recently, in more ways than one

Budgie said...

ND, how often do Nukes trip? And all at once? Come on - Wind needs 100% backup, not Nuclear. If there are 10 Nuclear plants built to Western standards you might need the equivalent of one as a backup.

And yes of course Nukes need inventories of spares, handling equipment, fuel etc, but not the large volume or storage infrastructure of coal, oil and gas.

Nick Drew said...

sorry, of course I meant 100% of any one plant - in fact, current standards require cover for 2 plants. The point is, they are big. (You know I have no time for wind.)

Oil isn't used for power gen in the UK. Famously, we have rather little gas storage - and it's not paid for by power generators per se. Coal storage is a rather trivial matter of a big pile on the ground outside the power plant. Infrastructure, I'm not so sure about. Obviously gas infrastructure is extensive & rather obvious. I have a feeling nukes require an extensive but rather less obvious infrastructure - reprocessing, security etc (MR W ?)
plus astronomical decommissioning costs by comparison to a gas plant where you pretty much hit the button, turn the key and walk away

Budgie said...

No, that's still not quite right, ND. Oil is an available technology now, has been used in the past and still accounts for 1% of UK electricity generation as a backup (

All large electricity generation plants are industrial brown field sites and require expensive decommissioning and site decontamination, not just Nuclear. Agreed Nuclear will be the most difficult and expensive, but the others are not cheap.

Coal infrastructure is not just a pile on the ground. There is storage at the mine, storage at the generating plant, all the handling equipment, transport in between and then pulverisation or gasification plant.

You are quite right that the Gas infrastructure (inc storage) needs to be extensive, complex and costly; and that we have not got nearly enough in the UK for the Gas we will need, considering the silly decisions by both Labour and the Coalition.

The point I was trying to make about storage was not about cost: it is that Nuclear can operate for months without vast quantities of fuel being transported to it. This could be strategically advantageous.

rwendland said...

Wind turbines, of course, do not need 100% backup - they are part of a system entirely made of unreliable components, organised into a reliable system without 100% backup of each unreliable component.

National Grid is running a comprehensive consultation, in part, covering this. It is rather complex and difficult to follow, but as I understand it, NG plan to have a dynamic system organised on four hour periods planning the required backup provision. In 2020 reserve will be 30% of the forecast wind output (note, not total capacity) for each 4 hour period. The wind reserve would be about 42% of the annual NG reserve covering all generation.

The reserve system is already dynamic as I understand it - less reserves are held at low demand times (eg overnight).

Currently wind output is too small to be a bother to the existing reserve system. If they did this 4 hour period wind reserve forecasting, they would currently use a 50% wind reserve. But NG expect better wind forecasting, taller windmills more out of ground effects, and more wind sites giving better dispersion, to allow this to drop to 30% by 2020.

Budgie said...

rwendland, you are mixing up the reliability of the plant itself with the "reliability" of the wind as a fuel.

It would not be sensible to build a coal fired generation plant to which the supply of coal was known to be intermittent. Yet this is exactly what we are doing when we build Wind factories.

You should not be surprised that I do not accept your backup figures, even if supplied by NG. These people either believe, or acquiesce, in CAGW, and in Wind as a solution, so in my view cannot be taken seriously. However, even if the NG figures are used, Wind is still more expensive than Nuclear, which was my main point.

There is a degree of irrational wishful thinking about Wind which is politically inspired and traps the unwary.

James Higham said...

It requires some fairly heavy-duty doublethink

The Fabians are still there, Nick.

rwendland said...

WSJ has an article worth reading about the new Areva CEO, for those following the Areva/EDF saga. Areva really needs EDF to build EPRs in the UK. Some snips:

During her 12-year tenure, former Chief Executive Anne Lauvergeon bet on a nuclear renaissance and loaded up the company with debt and expanded its operations. But ... the nuclear renaissance never quite happened.

Key to [new CEO Luc Oursel] plan is building closer ties with EDF, reducing Areva's debt via divestitures and looking to appease ... the French state, which directly and indirectly holds 87% of Areva.

"It's not about managing an industry in decline," Mr. Oursel said. "It is about dealing with this period of uncertainty before all the projects start again."

He adds that it is crucial to cut the group's debt, which stood at €2.77 billion ($3.75 billion) in June. To this end, Areva grouped its mining business into one subsidiary, a move orchestrated by the French state that makes it easier for an outside investor to take a stake. ... Areva could also shed its 26% stake in mining group Eramet SA.

Having to sell the mining business just post-Fukushima is very unfortunate timing.