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2003 Nov, Newsletter No.64 |
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Written by SONE
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Sunday, 02 November 2003 |
THE RAKE’S PROGRESS - TOWARDS THE CLIFF
We are now in the doldrums, waiting for a puff of wind to catch the
sails and propel nuclear’s case forward. The most likely favourable
puff - power cuts - would be damaging to the national interest. But we
know that at best nuclear can only marginally affect our electricity
supplies over the next 10 years. In these circumstances, power cuts
would most likely lead to another dash for gas which would, of course,
be in line with the Government’s all-gas-and renewables energy
strategy.
There
are encouraging signs that the wind is being taken out of the sails of
wind power. Its limitations, both as a reliable supplier of power and
atmospheric cleanser, are being more widely realised. Energy
conservation, another main plank of the Government’s policy, is
scarcely mentioned and there is no evidence of a major campaign to
promote demand reduction. We have the inescapable impression of a
Government approaching the next election on a wing and a prayer. Of
course, it tries to give the impression that everything is under
control. But there is no evidence to suggest that after the next
election a Tony Blair (or Gordon Brown) or Michael Howard Government
would do what SONE would regard as the right thing by the national
interest. This being so, we suggest that SONE members should emit the
following messages at every opportunity:
1 - The national social and economic interest in having reliable, continuous and affordable energy supplies is now in jeopardy.
2 - Even if every hill were carpeted with wind turbines, we should have
neither reliable nor affordable electricity; nor should we dramatically
reduce greenhouse gas production.
3 - We cannot expect dramatic or even substantial reductions in demand
from any foreseeable energy conservation policy. All the evidence is
that demand is steadily rising.
4 - The danger medium term is that we shall burn ever more imported
natural gas (still a dirty fuel) until we become dangerously reliant in
terms of both supply and price exposure for most of our energy on
foreign suppliers in often politically unstable countries.
5 - For environmental (atmospheric) reasons, we are rapidly phasing out
coal and oil generation of electricity while at the same time rapidly
running down the nuclear industry which produces no greenhouse gases.
It doesn’t add up.
6 - If the national interest is to be safeguarded we require a mix of
energy sources. Clean nuclear power would enable us to have a wider
choice at affordable prices. It is therefore not good enough for the
Government to say nuclear may have a future role. It has to put the
nation in a position to acquire it.
7 - The Government needs to a) signal that to remain a competitive
economy we need a substantial nuclear component in our electricity
supplies; b) end the dscriminations against nuclear - eg the climate
change levy - which rig the market against it; c) make rapid (instead
of dilatory) progress in dealing effectively and long term with nuclear
waste; and d) put in place a credible energy strategy by the next
election.
EVASION, PLATITUDES COMPLACENCY
Often the most perceptive questioning of the Government is in the House
of Lords. Unfortunately, any Government only fields its second team
there. The result often reminds you of a batsmen told by his captain to
put the shutters up.
That is exactly what Lord Davies of Oldham - formerly MP for Enfield N
and then Oldham and Royton - did on November 17 as at least nine peers
queued up to follow Lord Peyton of Yeovil over the top about nuclear.
What, Lord Peyton asked, does the Government mean by “keeping the
nuclear energy option open” and what is the cost of doing so. Answer:
not ruling out the possibility of new nuclear power stations. Lord
Peyton thought that answer “a bit thin”, given that time, reducing the
security of supply and nuclear skills, was not on our side. We needed a
new nuclear power station programme urgently.
Then two SONE patrons, Lord Maclennan and Lord Marsh, weighed in. Lord
Maclennan wanted to know what the Government was doing to inform the
public about the “blanket coverage” needed if we had to rely on
windmills to supplant the electricity currently generated by nuclear.
This produced the best out of Lord Davies: the public are well-informed
about wind power because public inquiries are held when wind farms are
proposed.
Lord Marsh, wondering what contingency plans the Government had, given
nuclear’s long lead times, was told that since the last nuclear station
would be with us until 2035 “we are still discussing these issues
within a realistic time frame”. No recognition that by then nuclear’s
contribution will have fallen from 25% to 3%.
Lord Tomlinson wanted to know how many windmills we would need to
replace our nuclear industry. Answer: Don’t know. So what are you doing
to avoid California’s crisis, asked Baroness Oppenheim-Barnes. Answer:
we are “identifying exactly” the sources from which we expect to derive
energy.
Lord Craig of Radley: what are we doing about the management and long
term storage of nuclear waste? Answer: the Energy White Paper paid due
regard to them.Lord Ezra, former Coal Board chairman: How are you going
to fill the gap left by nuclear, given also the run down of coal? Do
you have plan B? Answer: These issues are all being examined. The
Government goes “well beyond Plan B.”
Baroness O’Cathain: Ay yes, but you haven’t answered Lord Peyton’s
question about the cost of keeping the nuclear option open. Answer: The
Government are not in a position to put a precise figure on that.
Baroness Miller: Do you accept The Engineer’s estimate that the safety
cushion of excess energy capacity will drop to 3% in six years? Answer:
when there is a narrowing of the gap between need and provision that is
a signal to the industry to bring more resources on stream.
Lord Davies will go far - if they lights stay on.
THE PRESSURE GROWS
At the end of October, Ian Russell, chief executive of Scottish Power,
warned of widespread blackouts within four years unless the Government
intervened to encourage generators to build power stations. He wants a
return to the capacity payments which existed from privatisation in
1990 until the advent of the New Electricity Trading Arragement (NETA)
in 2001 but there is no overall view in the electricity industry as to
what is required or acceptable Mr Russell’s intervention led Patience
Wheatcroft, the Times business editor, to make a cynical point. Stephen
Timms, she said, would no longer be (part time) Energy Minister in
three years’ time when the lights may be going out.
But that did not dispose of a “clear risk” of crisis caused by shutting
down power stations before there was adequate new supply available. The
power companies were aware of the impending danger but were not
prepared to invest without an assurance that it would be worth their
while. It was a hard task to persuade a board of directors to agree to
an investment of, say, £400m without any guarantee that the price of
power it generated would make the project worthwhile. That was why
Scottish Power was trying to persuade the Government to pay for
providing capacity.
“Believers in the power of markets would argue that when a need becomes
apparent, companies make money by moving to meet it”, Ms Wheatcroft
said. “That is true but they may not be moving fast enough to avoid the
prospect of blackouts in a few years’ time. Too far ahead, perhaps, to
persuade the politicians that they need to act now.”
The Engineer on same track
Dr William J Nuttall, of Cambridge University, made exactly the same point in the October edition of
The Engineer. He said there were signs that the UK electricity
industry was waking up to its capacity problem and was dusting off
plans to reintroduce mothballed plants. The National Grid had warned
seven times that the capacity margin was inadequate and that there
could be difficulties in a hot summer - difficulties that would only
worsen if global warming were real. But would forward estimates of the
market - and pressure from the regulator, Ofgem - be sufficient to
prompt utilities to invest in generating plants without the need to
return to the policy of capacity payments?
“There is a statement in electricity circles that one hears more and
more these days”, Dr Nuttall said. “Electricity will never again be as
cheap as it is now. The need to increase the UK plant margin is one of
several factors that will ensure this statement will indeed come true”.
The issue for SONE is not whether we need more reliable capacity; it is
whether nuclear will provide some of it.
RIGGED INTO TROUBLE
Perhaps some of the Government’s apparent complacency about energy
supplies this winter stems from National Grid Transco’s winter
operations report to Ofgem, the regulator. This said that there is
enough gas and electricity to meet normal winter demand, though NGT
would like a bigger electricity “safety cushion” to manage exceptional
circumstances.
The report has been presented as reassuring both by Ofgem and the DTI.
Ofgem claimed that it showed that the market had responded to rising
prices by raising the generating margin from 16.5% in July to 17.7% in
October.
But its own remarks betray underlying worries. The cushion, it admits,
is lower than in previous years and the only assurance NGT has given is
that there will be enough power to meet forecasted demand “under all
but the most exceptional circumstances”. In other words, a cold winter
could bring interruptions in supply. The NGT says that 2,600MW of the
4,600MW (7.1% of generating capacity) currently mothballed could be
quickly returned to the system, though generators have told it that
they expect only 800MW to be brought back in the next three months. As
a result, Ofgem and NGT are working on measures to improve security.
Since there doesn’t seem to be much prospect of substantially hoisting
spare generating capacity - the NGT, it is believed, would be much
happier if the margin were 20% - one NGT proposal is for it to be
allowed to allow gas generators on interruptible gas contracts relief
from interruption so that they can generate over peak demand hours.
Another is to “take into account the situation on the electricity
network when taking gas balancing actions if it is necessary to
maintain electricity supply security”.
But here’s the rub. The fact is that we are entering the coming winter
not merely with tight electricity supplies but also much less well
publicised tight gas supplies - “unprecedentedly so”, according to
experts. Who would welcome the responsibility of deciding whether to
divert gas supplies to electricity generation if that meant losing gas
supplies to millions of small gas consumers?
Let us never forget that this is not where the market gets you. It is
where a regulated market - ie a rigged market - gets you. It may be
that a free market would have landed us in worse potential trouble. But
for this winter we know where a market rigged by NETA to slash prices
gets you. We also know who will be at fault if there are power cuts or
gas shortages. It won’t be Ofgem or the Government; it will be NGT
and/or the “greedy privatised generators”. Perhaps you should cut this
out to nail the lies as and when they flow.
NUCLEAR COMING INTO ITS OWN?
Dr Nuttall (see above) says the days of cheap power are behind us. If
so, how does this alter the prospects of nuclear which the Energy White
Paper (EWP) described as “uneconomic”? If discussions on financing
energy projects to which SONE has been a party are any guide, nuclear
should soon become very attractive indeed. By 2008 gas from Norway’s
Ormen Lange field in hostile northern waters - 1,100km from the
Easington landfall - should be supplying about 20% of the UK market. It
will be gas produced at the frontiers of technology and expensive. So,
too, will imports from remote Russian fields. This and the upward
pressure of the new EU emissions trading scheme could lead to increases
of up to 60% in the wholesale price of electricity across Europe.
As things stand, gas-generated electricity will have to take the strain
from the retirement of nuclear, coal and oil power stations and the
intermittency of wind power. But how keen will investors be to build
new gas-fired power stations, against the prospect of rising gas
prices, when higher electricity prices will stimulate energy saving and
make renewables and nuclear more attractive? And doesn’t all this mean
that the much needed conventional “spinning reserve” to cope with wind
power’s intermittency is melting away?
So, how soon, will all this rickety structure come apart at the seams?
Well, we are told that for 53 days last year wind power provided less
than 1% of Denmark’s supply. In other words, the wind did not blow.
Northern Europe was similarly becalmed for long periods this summer. On
this evidence, we cannot afford more than a strictly marginal and
insignificant wind power contribution to our supplies.
What we need, as British Energy is making clear, is controllable
electricity. And so the case for nuclear builds. But the problem is
that energy discussions are still dominated not by nuclear’s
reliability and cleanliness but by the magnificent obsession with
renewables. It is time we got real.
EVER MORE UNREAL
But getting real is the last thing that is happening. Ofgem has
announced it is looking at ways for network operators to finance the
upgrade of the electricity grid to cope with wind power - voted by
readers of Country Life as the No 1 most hated eyesore in Britain. The
estimated cost of transporting wind power from where it isn’t needed on
remote hills to where it is required in towns and cities: well over
£1bn by 2010.
“We must make sure the investment is there to meet demand from
renewable generators”, says Boaz Moselle, of Ofgem, “but equally we do
not want customers paying for wires where they are not needed”.
But they are inevitably going to pay for wires that are not needed. We
don’t need, can’t afford and should not have to pay for costly,
unreliable electricity when there is an alternative which the EWP
called “uneconomic” - a label for nuclear that looks more ludicrous as
the months go by.
MEANWHILE.......SANITY
Among the nuclear advocates noted this month are the following: John
Ritch, director general of the World Nuclear Association, writing in
the October edition of World Energy Review, says the essential issue
about nuclear power is not whether it will grow but how fast. Will it
grow fast enough to meet the world’s urgent need for clean energy on a
massive scale? Will we further strengthen the global infrastructure of
people and institutions to guide and promote nuclear’s growth.
As a civilisation we face the unprecedented danger of ruining the very
biosphere that nurtured our growth as a species and social order. Yet
we now have at hand the tools we need to avert that threat.
Dr W L Wilkinson, a member of SONE’s committee, has written to the
Times saying it is hard to understand why nuclear power, which has been
proved as a reliable source of affordable carbon-free electricity, is
being ignored completely when the USA, France, Japan, China, Korea and
Russia, for example, see it as a vital component in their energy mix.
Dr Denis MacShane, Minister for Europe and a SONE patron, calling for a
step change in Europe in its attitude to science, said: “Europe which
once revered scientists like Louis Pasteur and Marie Curie now cowers
before the anti-science peasant poujadisme of a Jose Bove or the
superstitution of those who reject nuclear energy as part of our energy
matrix”. |
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Last Updated ( Friday, 09 September 2005 )
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