Wednesday 13 May 2015

A Checklist for Amber Rudd at DECC: We're Watching

My hopes for someone with sound instincts to take over at DECC are on hold until Amber Rudd proves herself, on way or the other.  She's obviously a bit green-friendly, which lowers the tone; but then again she is said to be a practical person with business experience and in favour of shale.  So in the spirit of Séptimo de Mayo we'd better suspend judgement.  I'm not, frankly, very optimistic, but... 

What I shall be watching for:
  • scrapping and/or substantially renegotiating the Hinkley Point 'agreement' with EDF, which is now such a nonsense that no reponsible government of whatever stripe should proceed
  • a very hard-headed approach to the wretched EC 'European Energy Union', including the utter crushing of its dirigiste tendencies before they ever get started
  • ditto the even more wretched UN Paris Conference: no 'Europe must show leadership by cutting its own throat' etc etc 
  • telling the Climate Change Committee to wind in its neck (and ditch the utterly useless Gummer / Debden at the first opportunity)
  • immediately getting to grips with the detailed nonsenses in UK policy, some of which could be stroke-of-a-pen stuff.  There are too many to list them all, but most egregious: the way biomass gets a free ride as 'deemed to be CO2-neutral', when burning mature trees is categorically not;  the way distributed generation (most specifically including intermittent wind) gets a free ride on all the trouble it causes in the Grid
  • putting the boot in the Scots - meaning, force them to confront the infeasibility of their stated 'energy policy'
That's right off the top of my head, and C@W readers will pitch in with more (as will I, after a bit more deliberation).  Some will say: scrap the Energy Union, withdraw from Paris, etc etc.  It's fun to say stuff like that, but it's also, frankly, pointless.  We get enough of that, and it's not practical politics.

There is one handy aspect of the current situation, which is that under successive Energy and Climate Change Acts the SoS has a range of amazingly strong unilateral (or semi-unilateral) powers.  So use them, Amber!   Above all, significantly reduce the UK's 'legally binding' CO2 target.  "The Secretary of State may by order amend the percentage [i.e. target] specified in section 1(1) …if it appears to the Secretary of State that there have been significant developments in— (i) scientific knowledge about climate change, or (ii) European or international law or policy" (Climate Change Act 2008 Part 1, Sect 2)  That's not what I'd call legally binding at all.



John miller said...

Nobody in government will deviate from the status quo.

Not even when some boffin says "next week Newcastle will be without electricity on Tuesday' and Thursday from now on"

This will merely result in ordering 500,000 diesel generators being bought from Germany.

Well, perhaps not quite, but we no longer have politicians who have the guts to be sensible. Vide Cameron joining in the fantasy money bids during the election. He's a gutless wonder and that will set the tenor for what will be a chaotic term in office.

dearieme said...

I fear that Mr Miller will be proved right. Cameron looks good only if the alternative is a Mr Milibacon or Milibanana.

Jan said...

Couldn't agree more about Hinkley Point. I suppose people want to "save face" over that one so it will take a while for it to gently slip off under the radar.

Anonymous said...

Nothing will change.

Ministers live in the bubble. Everyone in the bubble is more terrified of someone at The Guardian or BBC calling them 'nasty' than they are of the lights going out in Hartlepool.

Demetrius said...

If the reports, such as in The Mail, are right and there is a thumping El Nino to come, this might do it for us.

Blue Eyes said...

Wouldn't it be more fun to hold EDF to their agreement? Two large nukes, wasn't it? Was there a deadline?

Sniper said...

Smaller and more numerous nukes. Just like Derby but using, say, Thorium. And get that bloody shale out.

James Higham said...

How can she be green friendly in favour of shale?

Nick Drew said...

Easy: gas is better than coal

(or maybe she's just a Cameron-sycophant?)

Budgie said...

Actually Coal is cheaper than Gas, though if I were running a power plant I'd have Gas over Coal even if it were 50% more expensive. Never mind save the planet, what about save my boilers!

And Hinckley ...... please, ND, explain to me why a Nuclear (always on) strikeprice of £92-50 is so much worse than Offshore Wind (intermittent) at £155-00?

Nick Drew said...

Budgie - offshore wind is an abortion, too

though it does actually exist ...

rwendland said...

Budgie, we had a very good discussion on £92.50+inflation/MWh for 35 years being roughly equiv to £155/MWh for only 15 years, if you do the discount rate etc maths, in the comments of one of ND's 2013 posts.

I dug out some analysis by someone who had done the CfD maths who wrote:

on-shore wind with a CFD tariff of £100/MWh - but crucially for a period of only 15 years - now offers vastly better economics than nuclear with none of the construction over-run risk ...

... if we assume a black power wholesale value of £50/MWh and all prices (including discounts) indexed equitably to inflation, then the relative "35 year" prices of what is being offered to renewables technologies under the same CFD scheme (for comparison against £92/MWh for Hinkley) are:

Landfill gas: £56/MWh
Hydro: £69/MWh
Onshore wind: £71/MWh
Dedicated new-build Biomass CHP: £80/MWh
Solar Photovoltaic: £82/Mwh
Anaerobic digestion: £91/MWh
Offshore wind: £95/MWh - falling to £86/MWh for later projects

This is very sobering stuff, some of these technologies (notably biomass) provide genuine baseload power with more flexibility than nuclear and none of the risk, while others (notably solar) are on a curve where for every GW installed the price of the next GW comes down. Placed in this context, it is incredibly difficult to see how this deal is going to benefit the UK in any way at all ...

ND concurred with this:

yes, to the degree of accuracy possible with several big assumptions to be made, the relativities are about right and I would line up behind Monty's maths

for completeness we could add:

sewage gas - £62
waste burning - £65

no shortage of those, either ! (set up collection-point in the basements of Westminster + Whitehall)

Those numbers are 2 years old, but I doubt much has changed. In fact with Hinkley manufacturer Areva needing a rescue and laying off 6,000-ish staff, and the steel flaw found in the French EPR reactor vessel, Hinkley risks are way up so it looks even worse for the French flavour of nuclear reactors.

Nick Drew said...

thanks, Mr W, I'd forgotten about that discussion

it was rather good ! (though I say it as shouldn't)

rwendland said...

You have to hand it to the nuclear power lobby, they scored a blinder with CfDs - not only they alone get a 35 year offer, but the presentation makes them seem cheaper in the media.

You would have thought Hydro should also have been offered 35 years as well, and new-build Biomass and waste burning perhaps 20 or 25 years.

lilith said...

I was at school with her. How bloody alarming!

Nick Drew said...

You have to hand it to the nuclear power lobby, they scored a blinder with CfDs - not only they alone get a 35 year offer, but the presentation makes them seem cheaper

agreed, but I'd put it a bit differently

they scored a blinder when, somehow, they got the whole weight of Whitehall squarely on their side

from that point, favourable terms and optics etc follow as night follows day, along with

- a knighthood for the Chief Frog

- HMG threatening to dump its full load on Austria if it pursues an appeal against the EC approval

- HNG expending serious political capital in EU to get the approval in the first place

- 'half the lawyers in London' working on the very many drafting issues involved

... and who knows what else that has been conceded to EDF in all the areas that are 'confidential' -?

(I wonder if this was down to Brown's brother being the main EDF lobbyist at the key time back in 2004-ish, when Blair was persuaded to go nuclear as soon as the '05 election was safely out of the way)

Budgie said...

Rwendland and ND, assuming that the "someone who had done the CfD maths" actually got the calculations correct, you then say "... £92.50+inflation/MWh for 35 years being roughly equiv to £155/MWh for only 15 years ...". But this means no advantage for Offshore, even on your assumptions.

Yes ... assumptions. After the 15 years (that is how long the windmills last offshore - if you are lucky) you would have to replace them at the inflated price assumed for your discount rate, to get the 35 years life available from Nuclear. So unless the strike price or the windmill price is significantly reduced in the future, for the same overall life you need to discount over the same time period. So £92-50 versus £155-00 it is. If the strike price is much lower after 15 years, it is unlikely that current build Wind would be replaced. Then we would have to have something else anyway.

Moreover, Wind is intermittent (even Offshore) so there must be switchable conventional backup (even taking risks, that approaches 100%). So those costs have to be added in as well.

Then as you know, I contend that Nuclear build engineering costs could be much lower than currently presented. A large proportion of the build costs are for regulation (usually by non-engineers) which actually hampers engineers from making sound decisions, thus increasing costs for no added safety or actually worse. To Regulation risk there is also added political risk. So we end with higher build costs and poorer designs than we could have. Plus there is no incentive to research alternative Thorium cycles.

So, as before, I do not believe you have made a case. However if you both actually spent an equivalent wordage denouncing inefficient, intermittent Wind as you do Nuclear, it would at least be a more balanced and accurate outlook.

Nick Drew said...

jeez, Budgie, I don't know why I rise to the bait but I have written a tonne on wind, all derogatory



(and don't get me started on biomass)

rwendland said...

I think this Whitehall-nuc industry nexus goes back way further, sustained continuously from the nuclear weapon building days. After all, initially producing power was not much more that PR for the military plutonium breeding reactors at Calder Hall (Sellafield), with the Queen opening the "power reactors".

I rather suspect the British security establishment see some level of nuclear power generation (perhaps 10%, or 4 reactors) as an undisclosed national security matter, so if in some future emergency blocked access to energy imports, at least some parts of government and the critical infrastructure could continue to function 24-7 for a year or two.

I think Blair's turn-around after 2005 is more likely from national security-types pressure, rather than Brown's brother. Be interesting to find out before the papers get released in 30 years (when I'll probably be ga-ga at best!).

rwendland said...

Budgie, yes I agree Offshore wind is no cheaper than the EDF EPR offer, about the same cost. I don't think we should go for widespread Offshore wind deployment at current costs - there is the prospect of reasonable drop of costs over the next decade, maybe then.

I'm not inherently against nuclear power, despite the impression that might be taken. At some time in the future I expect it to be our main power source. I just think the current generation are neither safe enough nor cheap enough to deploy on a wide scale.

If we must have some new nuclear power in the UK right now, I'd say tell EDF to take a hike with their EPR offer, and wait for the followers to make their pitch. Hitachi say they want to build 6 ABWRs @ Wylfa & Oldbury, and NuGen want to build 3 AP1000s @ Sellafield. China is also interesting in building some Gen 3 reactors probably at Bradwell. I'd say let them compete against each other, and we'll go with 1 or 2 of them if they offer a sensible price.

Nick Drew said...

by coincidence, Toke has posted this today, with an attempt at some relevant numbers

I was always told one should never end an essay with "Hence we can see"; and Toke is a green - so it's obviously suspect from the outset (+:

however, it makes some points

personally I am guessing solar will be a large part of the ultimate solution, because solar technology appears to obey something akin to Moore's Law, and my academic contacts tell me there are several ultra-promising new avenues of research still to be exploited

solar + storage is a conceptual answer most people can sign up to: and as they say in academia, if you solve the storage issue, you can name your university after yourself

(in the meantime, of course, I see no reason why we should subsidise non-economic solar ... spend a tenth of the money on R&D!)

finally - to satisfy Budgie's atavistic hostility to wind: my (extensive) North Sea experience tells me that once you get really, over-the-horizon offshore the maintenance issues will turn out to be prohibitive

Budgie said...

Rwendland said: "Budgie, yes I agree Offshore wind is no cheaper than the EDF EPR offer, about the same cost."

No. Offshore is a (much) higher price.

You cannot assume only 15 years for Offshore (even though that may be the life of the windmills) and try and compare it to 35 years of the Nuclear. We will need electricity for all of the 35 years (and beyond, of course). So further Offshore installations will be necessary to continue with Wind - so the payments must continue.

Both Nuclear (£92-50/MWhr) and Offshore (£155-00 falling to £140/MWhr in 2017) are index linked to CPI (see DECC info). So the prices remain in proportion. offshore is about 50% more expensive than Nuclear on these figures. Including backup makes Wind prices even worse.

Budgie said...

ND, "atavistic ... relating to or characterized by reversion to something ancient or ancestral."

Surely it is the proponents of windmills that are atavistic, not the opponents like me?

Blue Eyes said...