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Written by SONE
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Thursday, 01 May 2008 |
PRO-NUCLEAR AT LAST, BUT ENERGY POLICY STILL COMICAL
It is, of course, encouraging that British Energy, five years after
being bankrupted by the Government, is now being pursued by would-be
nuclear developers prepared to write cheques running to £11bn. It has
the sites for power stations, the expertise to run them and local
support. It is – as it always was – a valuable asset.
But even with an enthusiastic Business Secretary – John Hutton – it would be better if BE sat in a coherent energy policy. Wherever two or three are gathered together to review the UK energy scene, the contradictions, inconsistencies and downright idiocies raise their frankly comic heads.
There is no rhyme nor reason to the climate change levy that excludes nuclear and large-scale hydro. There is even less to the subsidies for renewables which don’t deliver but none for nuclear and large-scale hydro which do, even if nuclear does not seek them.
Practicality and cost-effectiveness seem never to be considered. The limitations of wind, waves, tides solar, biomass, CHP, micro-generation and carbon capture and storage (CCS) are never publicly discussed by those who are supposed to seek value for the public’s money. They are uncritically listed as a good thing because the passionate anti-global warmers rather than the practical experts say so. Just look at the consequences for food prices of the Gadarene rush into ethanol.
Against this background, the Prime Minister’s determination to foist eco-towns on us and the EU’s crackpot policy requiring 20 per cent of energy from renewables by 2020, it is difficult to see how security of supply at lowest cost – or, indeed, lower carbon emissions – motivate the powers that be, even if they do not see Mr Putin as benign.
Nor have we a clue how Ofgem, the energy regulator, fits into the future after being the agent for bankrupting BE in 2002. Currently, it is in the absurd position of warning about the exorbitant cost of wind while facilitating its development and connection to the grid.
This is probably what you get when within three years you do a complete U-turn on nuclear power but leave energy policy still largely dictated by Greens who are in favour of everything that doesn’t work and against anything that does.
Those SONE members who think the battle has been won should think again, given what could happen in the fevered state of British politics with Green fanaticism and such a rickety national energy policy, if such it can be called.
STARVATION A GOOD THING
One of the strongest objections by nuclear opponents is that nuclear’s development would starve renewables, CHP and micro-generation of investment. This is a very curious argument when, on any cost/benefit analysis, it would be a very good thing if safe, reliable, predictable, clean and economic nuclear power were to crowd out unpredictable, uneconomic and often unproven other means of generating electricity.
What is the point of building 7,000 wind turbines offshore, as announced by Mr Hutton, if they don’t do the job required? Shell has perhaps given the answer by running away from the proposed massive London Array wind “farm” in the Thames Estuary. .
This question should be repeatedly addressed to the likes of Sir Jonathon Porritt, chairman of the Sustainable Development Commission.
Meanwhile, Greenpeace and Friends of the Earth campaign for a national feed-in tariff for renewables to guarantee a long term price for any micro-generation fed into the grid.
And, Centrica, owner of British Gas, is said to be keen to get in on the bidding for British Energy but is a bit strapped for financial clout. No wonder when it is building a £300m offshore wind farm, planning another costing £600m and is reported to be considering several wind developments with a current estimated cost of £3bn.
We take the view that nuclear protagonists have adopted an altogether too passive approach to the prospect, for example, of spending £30bn over 20 years on marginal and, in grid integrity terms, dangerous renewables electricity. That sort of money would build 7-10 eminently useful nuclear power stations.
Who is crowding out whom? And to what purpose? Let us remind you what Professor Michael Laughton, the leading authority on electricity generation, told SONE’s 2006 AGM: “For the British national grid system, the conventional capacity needed will always exceed the peak demand, regardless of the wind capacity installed”. How daft can we get?
COINING IT
You’ve got to speculate to accumulate.
Landowners have just been told how they might make serious money out of wind farms.
At a conference in Blenheim Palace, a representative of Fisher German consultants, said most landowners preferred to let the developer take the risk and secure planning permission in return for a 25-year lease. But what if the landowner was prepared to spend £200,000 on a planning application and a similar amount on going to appeal? Why, he said, they could then sell the planning permission to a developer for anything from £200,000-300,000 per MW or up to £500,000 for the best sites in Scotland. Given the average 2MW size of a turbine, they could recoup potential planning costs of £400,000 on one turbine alone. Just imagine what a modest little generating station of 25MW would bring in – at the consumer’s expense.
We are encouraged that the House of Lords’ economic committee is to look into the costs and benefits of large-scale renewables and “how they stack up against non-renewable sources”. This committee has a reputation for polite but trenchant common sense.
WHO SAID SAVE IT?
There might be something to be said for the Government’s energy policy if it had anything remotely resembling a serious attempt to improve the efficiency and economy with which we use energy. It is true that various quangos such as the Carbon Trust offer advice but a recent report on the quangocracy said they give conflicting tips.
We may be sceptical about the overall savings to be achieved, given the rebound effect that causes people to spend the money they save through greater efficiency on other ways of using energy.
But there is no sense in wasting it or using it inefficiently if it can be avoided.
Andrew Warren, director of the Association for the Conservation of Energy, has just let rip about the inadequacy of the present approach. He says two departments – BERR, in overall charge, and DEFRA – are responsible and have 24 units dealing with different strands but not one has “overt responsibility” for delivering greater energy efficiency. Where they might stray into the area they not only ignore it but downplay its potential.
He says the reason is that for the past 16 years energy efficiency policy has not been administered by BERR but DEFRA and, in spite of Government claims it had first priority, it has taken more and more of a back seat and morphed into carbon emissions reduction. To start with DEFRA had five senior officials exclusively involved but six years later there was only one five rungs from the top.
“It is very dubious whether there is any clearly integrated energy policy at all”, he adds. Which is where we came in.
SWITCHING US OFF
We sometimes think that between them British and EU energy policies will be the death of us.
For example, if we had a rational energy policy, the Government could rationally and persuasively argue that we need more coal-fired power stations without dressing them up in as yet nonexistent CCS clothes.
Common sense and the laws of physics tell us that, even if we could build 10 new nuclear power stations tomorrow, we would still need fossil fuel-fired capacity – and some of it coal – for the foreseeable future, especially given Professor Laughton’s advice (see above).
We shall need it even more if all 222 wind “farms” The Guardian says are awaiting approval get the nod, Mr Hutton’s 7,000 offshore turbines materialise and the EU perseveres with the unattainable 20 per cent of energy from renewables by 2020.
Alarm
Now, just to complicate matters, the EU is proposing to tighten up sulphur and nitrogen oxide emissions from power stations. This has caused the Association of Electricity Producers to ask the Government if it is aware this could cause an “unbridgeable gap” in electricity supplies by forcing the closure of plant that could not recover the £2.8bn needed in total for retrofitting. This intensifies the uncertainties about supply arising from the long-heralded loss of a third of our generating capacity over the next 10-15 years through obsolescence.
Professor Ian Fells, emeritus professor of energy conversion at Newcastle University, told the Express on May 22: “By about 2020 we could be about 23,000MW short of power generation, which is about one third of our total. As you get to 2015 or thereabouts, unless we replace quite a slice of this energy we could have blackouts. I am alarmed by this. The default position is to build more gas-fired power stations but in terms of security of supply that is disastrous”.
British energy policy is not just split between BERR and DEFRA but between those two departments and the EU. That sort of bureaucracy can almost guarantee the lights will go out.
WOOD AND TREES
Meanwhile, coal-fired Drax, which generates about seven per cent of British electricity, is casting around for timber to produce 10 per cent of its electricity from biomass by using pulverised wood to co-fire the station in Yorkshire.
Biomass is reported to cost anything from three to five times as much as coal but Drax would be able to offset the cost through renewable obligation certificates for which the consumer would eventually pay.
Greenpeace, of course, welcomed the move even though biomass is not CO2-free. It is theoretically neutral and so does nothing to reduce carbon emissions, except to the extent it substitutes for coal. But Greenpeace wonders where Drax will get 1.5m tonnes of timber a year since it is likely to be in short supply for the foreseeable future, especially Forestry Stewardship Councilapproved wood.
This is another example of where current energy policy drives people to do daft things to avoid the obvious – nuclear power.
THE HYPOTHECATION ROW
Ever since we could take in what Governments get up to, we have known of one Treasury iron rule: hypothecation is out. There can be absolutely no question of allocating revenue even if it is raised for a particular purpose.
This means that DEFRA is refusing to guarantee that billions raised from carbon permit trading will be used to combat climate change from 2012. In an open letter to the Prime Minister, the CBI has joined the World Wildlife Fund UK in asking for the £1.6bn additional revenues expected to be raised by carbon trading to be spent on “supporting emerging climate change technologies”.
Richard Lambert, the CBI’s director general, says that if it does not recycle carbon revenue into green measures the Government risks undermining the trust of business and the public in green taxes.
We would like to see the evidence that the public supports green taxes, especially in these days when family budgets are under pressure. Nor is there any reason why they should if the revenue is to be thrown away on green tokenism rather than usefully employed in effective carbon reduction or producing what we need: safe, predictable, economic and clean power.
MORE BUNKUM
Nothing surprises us any more but Dr Peter Hodgson, an Oxford member, says he has encountered a new argument against nuclear power – namely, that it takes more energy to build reactors than they ever produce. We have heard this about wind turbines, but it isn’t true about them either.
Paul Spare, a member of SONE’s committee, has dug out an IAEA table quoting a variety of sources on the life cycle energy ratios of various generating technologies.
For nuclear the energy input as a percentage of output ranges from 1.7 to 9.5, with an average of 4.35 per cent. Hydro works out just over 2; coal 5.5; wind 9; solar 16.5; and LNG 17 per cent.
Piped natural gas varies widely depending whether it is used largely for peak loading.
In other words, it’s bunkum – as usual.
TRANSATLANTIC TOKENISM
The US Energy Information Administration has just issued some fascinating information about the $16.6bn federal energy subsidies that shows that green tokenism is a transatlantic disease.
Focussed on electricity production, the data sets out the subsidies paid per fuel type measured per MWhour of generation - natural gas $0.25; coal $0.44; hydro $0.67; biomass $0.89; geothermal $0.92; landfill gas $1.37; nuclear $1.59; wind $23.37; solar $24.34. In other words, wind receives 14 times as much as nuclear and 53 times as much as coal and more than biomass, geothermal, hydro and landfill gas put together.
All this is apparently done with the overwhelming support of the US public who uncritically view financial incentives to promote the development of carbon-free energy technologies as a good thing.
US support for nuclear
If that approach is fairly superficial, the encouraging thing about a US survey of 1,000 adults in April by Bisconti Research with GfK and NOP is that the mass of Americans seem to have few hang-ups about nuclear. Bisconti found that 78 per cent agreed that utilities should prepare now so that new nuclear plants could be built if needed. Only 22 per cent disapproved. That is a marginal improvement on the score (75 per cent) last October.
Some 59 per cent agreed that “we should definitely build more nuclear power plants” and 66 per cent that it would be acceptable to add a new plant to the nearest operational nuclear station. Eighty two per cent believed that nuclear energy will be “very” or “somewhat” important in meeting the US’s future electricity needs and 71 per cent agreed that nuclear plants are safe and secure.
We believe we have some way to go in Britain before we reach such scores, but they might not be out of reach if the inexorable rise in the price of electricity continues.
BURSTING BUBBLES
Lord Nigel Lawson, former Energy Secretary and Chancellor, forecasts in Time Magazine that the next bubble to burst after the tech-stock and housing bubbles is the green bubble, fuelled, he says, by climate change alarmism and Government subsidies.
He says the twin elements of a bubble are euphoria and roguery and the green bubble has both. He lists the roguery as the UN’s clean development mechanism – “impossible to police” – the EU’s emissions trading scheme – “a costly and corrupt farce” – and investment in renewable energy.
He says the main reason for the bubble is that emissions trading only has a future if the Kyoto agreement is succeeded by a more far reaching and rigorous accord. But in today’s harsher economic climate that is not going to happen as Governments are looking to scale back subsidies and voters are revolting against higher energy bills - all against the background, he claims, that there is “compelling evidence” that no global warming is currently occurring.
The case for nuclear is not, of course, founded on global warming but on the need for security of supply at competitive cost.
A SERIOUS QUESTION
This Newsletter is formally agnostic on global warming. But we have been trying to work out when some serious questions have to be asked about it. If we accept that the cold spell ended in 1975 then it is clear that at best the whole edifice of climate change is based on 32 years of a modestly warmer climate.
But now we are told there has been no warming since 1998. That means what Lord Lawson calls alarmism relies on a trend in the previous 22 years. Set against the great sweep of history, that, to say the least, seems an inadequate reason for media hysteria.
It may well be that rising CO2 levels do warm the planet but that natural phenomena, such as sunspot activity, offsets it. Of course, we haven’t a clue what is going on. But perhaps you will agree we have cause to wonder. |
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