Grant Ringshaw
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ACROSS Britain, cities are plunged into darkness. In London, the Underground grinds to a halt, leaving panicked commuters stranded in oppressively hot carriages. In office blocks, lifts stop operating and the air-conditioning shuts down. Employees swelter in stifling conditions.
This is not the postapocalyptic vision of some film-maker, but a realistic scenario as Britain grapples with a looming energy crisis. The statistics are frightening. In only eight years, demand for energy could outstrip supply by 23% at peak times, according to a study by the consultant Logica CMG. The loss to the economy could be £108 billion each year.
“The idea of the lights going out is not a fantasy. People seem to accept that security of energy supply is a right. It is not. The industry will have to work hard to maintain supply and for that we need a clear framework,” said Simon Skillings, director of strategy and energy policy at Eon UK, Britain’s largest integrated energy company.
This Wednesday, the government’s delayed energy white paper will attempt to provide some answers. It is a crucial document that will determine whether Britain can deliver on its pledge to slash carbon emissions by 20% from 1990 levels by 2020. The white paper will seek to tackle a host of tough issues – from nuclear power to energy efficiency, renewable power sources and clean-fuel projects. A planning white paper, due tomorrow, is also seen as crucial after a number of energy projects have been delayed for years or slapped down by local authorities.
The scale of the challenge is immense. By 2015, Britain’s generating capacity could be cut by a third as ageing coal and nuclear power stations are closed. Britain is also moving from being self-sufficient in oil and gas as North Sea production declines. In 2005, the UK became a net importer of gas. By 2010, imports could account for 40% of British gas needs; by 2020, 80% to 90%.
The most contentious area is likely to be nuclear power. Nuclear reactors account for about 20% of Britain’s electricity, but this will shrink to 6% in 20 years as ageing plants are closed down. By 2023, only Size-well B could be in operation.
Already controversial, the government’s commitment to building new nuclear power stations became even more sensitive when the High Court agreed with the environ-mental lobby group Greenpeace that the consultation process was “seriously flawed”.
The white paper is expected to give guidance on how the government would like to see new reactors built, but will have to stress that any decision will depend on a new, more detailed, consultation round.
What the energy industry wants is clarity. Even so, energy companies, including RWE, Eon, Suez, EDF, General Electric and West-inghouse, have already held talks with British Energy about using the sites of its eight nuclear power stations to build new reactors.
Combining the need to secure Britain’s energy supply and reduce carbon emissions will require £55 billion in investment in the next few decades, according to Logica CMG.
Exactly where the money will be spent hangs in the balance. One of the big issues is how the government plans to encourage operators to build cleaner but more expensive power stations. To make the economics work, much will depend on the price of carbon and the credits power operators need to buy if they overshoot emissions targets.
This falls under the EU emissions-trading scheme. If the EU cracks down and imposes higher penalties on “dirty” power producers, the price of carbon would in theory be pushed up. Centrica believes that carbon prices would need to double from the current €19 (£13) per tonne to make a £1 billion clean-coal project it is considering in Teesside economically viable.
“If the UK is to hit tough targets on reducing CO2 emissions, it is vital that the structure of the EU emissions-trading scheme is optimised to encourage the building of really low-emitting power generation stations,” said Jake Ulrich, managing director of Centrica Energy.
Another key area is carbon capture; this involves trapping carbon-dioxide emissions from coal or gas-fired stations and storing them underground, probably in old North Sea oil reservoirs. Schemes include Centrica’s Teesside proposal while BP is considering building a £500m power station in Peterhead, Aberdeenshire, in partnership with Scottish & Southern Electricity.
However, power-industry executives claim that each project would need several hundreds of millions of pounds in government support – far higher than the Treasury’s financing plans.
Meanwhile, the government is under pressure to encourage desperately needed new gas-storage facilities. The UK has storage capacity to cover only two weeks of gas needs against two to three months for France and Germany.
New objectives for renewable energy are also expected. The renewables obligation, where suppliers are bound to source a rising percentage of electricity supply from renewable sources, will be refocused to give more support to costlier offshore wind farms and biomass projects used to co-fire coal-powered stations.
Britain is already struggling to meet its ambitious target of supplying 10% of electricity needs from renewables by 2010 and 15% by 2015. Today’s figure is about 2%.
“The goals are very ambitious and we are currently behind the curve. Investment would have to be accelerated very substantially to have any chance of meeting those targets,” said Jayesh Parmar of Ernst & Young.
Those targets are likely to get even tougher. In a little-noticed detail, the EU agreed in March to make it compulsory for 20% of all energy used to come from renewable sources by 2020.
As for the British consumer, the white paper will underline the need for smart meters, which measure exact energy use and cost, to be installed in people’s homes. There is also support for microgeneration projects – small-scale wind turbines, solar panels and gas devices to create electricity. However, the sums are tiny – £12m in grants is up for grabs this month from the Department of Trade and Industry, in addition to £6.8m already paid out.
The big question is whether the UK can act fast enough to tackle the looming crisis. Even if the government’s nuclear plans remain intact, it could be at least 10 years before the first new nuclear station is ready. A typical coal or gas-fired project could take between three and five years to construct.
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Energy awareness amonst the CEOs and FDs of the country's business community is almost nil. The level of awareness extends purely to "cash out the door per month". The usage, efficiency, supplier, rates are all a black hole to most, and the idea of an energy strategy is an alien concept to but a few. As a consultant to a wide range of business I see managers of hotels that know the exact pence per room that their tea and biscuits cost, but have no idea who their energy supplier and the fact they are paying >£10,000 per year too much! A successful company that is happily paying four times the market rates for electricty (circa £5,000 per month) while its sales margin is <3%. Until business professionals wake up and smell the cash flooding out of the back door and the see the kWhrs flowing up through the atmosphere little will change. Energy is not something that should be left in inexperienced hands, it represents a strategic expense going forward that will only become more so.
Richard Dormer, Exeter,
We are slowly turning ourselves into a third-world nation. So much of our infrastructure is struggling to cope with our burgeoning population. Our collective quality of life is sinking fast and I feel that energy supply is just one of the more obvious examples of privilege which we have taken for granted for far too long.
I also feel that setting ourselves carbon emission targets at a national level to be fundamentally flawed as it takes no account whatever of these population changes. Such changes are surely the main deciding factor on a nations environmental impact in all areas of which carbon is just one, fashionable, example.
Calculating our environmental impact, including carbon emissions, on a mean value per-head basis would also reflect more accurately the wonderful and selfless sacrifices made by so many in their daily lives. If such a calculation was made it would also make it far more meaningful to us ordinary folks and be a far more honest assessment of the situation.
Tyke,, Yorkshire,
It seems over the years people have rejected nuclear power because of fear of an accident causing unexceptable polution and preferred coal, gas or oil power plants.
But these are part of a much worse global crisis.
If people want security of energy difficult decisions need to be made.
John, London, UK
Despite vocal lobbying, Renewables cannot be the whole answer but are a valuable contribution to a mixed picture which needs financial support and incentives. Equally, gas fired power generation can only be a bridging technology to something else in the future. The key questions are what is this "something else" (currently nuclear is the only baseload generation that stacks up in light of GHG emmissions commitments already made) and how soon/ quickly can we build the necessary replacement power stations and generators of all kinds. This will all be down to the commercial realities of the day which we can't effect but something we (Joe Public) can do is be much, much more efficient in our use electricity.
LAB, Surrey, UK
We can now store wind energy with a new technology that's been tried and tested in a few locations, but now needs the sort of mainstream backing currently given to nuclear, it's called 'Vanadium Redox Energy Storage', -charged up from wind farms, it would enable us to enjoy wind power on demand 24/7, at a much cheaper cost then inflexable nuclear. Google 'sorne hill wind farm', Clive, Didcot Power Station.
But we also need turbines -big or small, we need them all!
Clive, Didcot, Oxfordshire, Oxon
The start of this article neglects to mention that a power crisis in "only eight years" is at the conservative end of estimates my personal prediction is summer of 2008 and it is based on facts in the public domain.
In reality we have been teetering near this precipice since 2003 and the brown paper and sticking plaster solutions will only carry us so far. One bad storm at peak demand times could literally put half the country into day long blackouts.
Nathan, Chester,
You may call it Vanadium Redox Energy Storage, but it's still a battery. Sorne Hill has, I believe, a 1.5MW 8 hour unit. How many is it suggested are needed for a winter peak load of getting on for 60,000MW during a winter anticyclone where there is no wind across the contry for days on end with freezing temperatures? Powering UK from batteries and windmills is a ludicrous concept.
To expect some base load renewable 'silver bullet' technology to emerge in a very few years is just as silly. The only tide power machine deployed in UK in recent years produced about enough power to boil a kettle and was carried away in the first storm.
To produce 1000MW from biomass would require a coppiced forest the size of North Wales. To replace nuclear needs about 20000MW. Do the sums yourself.
People need to realistic about the amount ofpower which can be reasonably expected from renewables. Without nuclear the country will be reduced to penury. Get real
Andy Martin, Crewe,
I was surprised that the article, although acknowledging that North Sea oil has peaked, failed to mention that global oil production also has peaked or is just at the peak and that NG is expected to peak within 10 years of the oil peak.
So I don't see where the import of 80-90% of gas needs is going to come from.
Micki, Melbourne,
We can now store wind energy with a new technology that's been tried and tested in a few locations, but now needs the sort of mainstream backing currently given to nuclear, it's called 'Vanadium Redox Energy Storage', -charged up from wind farms, it would enable us to enjoy wind power on demand 24/7, at a much cheaper cost then inflexable nuclear. Googlr 'sorne hill wind farm', Clive, Didcot Power Station.
Clive, Didcot, Oxfordshire, Oxon
I was surprised to see that although they acknowledge that North Sea oil has peaked they completely left out the fact Global oil production has peaked or is at it's peak and that NG is expected to peak within 10 years.
Micki, Melbourne,
The ineptness of Government on the issue of energy security is staggering. Another energy white paper this week? Less than a year after the last energy review? Which itself was less than three years after the previous one. All through this time four things have been crystal clear:
1) the nuclear fleet decommission schedule
2) the decommission of older coal infrastructure
3) the depletion of North Sea oil and gas reserves
4) that renewables and conservation werent going to mitigate the above
and yet nothing has been done. It is clear that the UK will face an electricity crisis within the next decade, new nuclear build is irrelevant to this issue as it cant come online soon enough.
Chris Vernon, Bristol, UK
The answer is, of course, renewable energy systems that can deliver base load electricity 24/7 - but nobody is prepared to go beyond a plethora of intermittent schemes - wind, wave, hydro, tidal etc.
A sea change is needed so that ROCs are only paid out on non-intermittent renewable energy systems - starting from now. Necessity in the Mother of invention - and this simple move will concentrate minds wonderfully!
Andrew H Mackay, Tain, Scotland
While I fully support energy conservation and reduction of emissions, I do wonder if this story is more about scaremongering so that the government can sink more money into nuclear power stations. Of course, with a fully active nuclear programme, production of material for nuclear weapons can conveniently be regarded as a sideline.
If the nuclear power plants were all closed in favour of biomass plants, production of nuclear material for weapons would have to be in a stand alone facility that would be more obviously accountable.
Steve Parker, Leeds,
This is the worst energy-prospect post I have ever seen in western media - ever ....
How could this happen ? I reckon you all slept for the last 10 years, waky waky its noon. Where would this put the nice chap Mr Blair in a historical perspective ... alongside Neville Chamberlain I guess? -
Imediate actions
- reduce speed limits for motorists - widespread common transports eg. bus - reintroduce the tramway
- plumb the cars
- maximum thresholds for electricity/gas usage in private housholds ( make double dinners every second day - reheating saves energy -and so forth) -----
Than sit down - have a strong coffee , tea would not help
God save the queen - and god bless the UK
Relax - the Vikings will not come back ..... BUT the Stirling is too strong and YOU are moving too much papers down in City
All the best - from Norway
Paul, bergen, norway