"Europe's green energy vision puts UK in dark Times" – Robin Pagnamenta – article on Supergrid

This article has been commented on by members of the Claverton Energy Group. Please feel free to add your comments providing they are fact based. Please insert relevant references where you know them. please use itallics for your edits.’

“Europe’s green energy vision puts UK in dark”

Source: Copyright 2009, Times (UK) Date: April 30, 2009 Byline: Robin Pagnamenta, Original URL

Discussion / development page for Times article on Supergrid

This article has been commented on by members of the Claverton Energy Group. Please feel free to add your comments providing they are fact based. Please insert relevant references where you know them. please use italics for your edits.’

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Claverton

Europe’s green energy vision puts UK in dark

Source: Copyright 2009, Times (UK) Date: April 30, 2009 Byline: Robin Pagnamenta, Original URL

It is a dazzling vision of a clean energy future. An entire continent powered by solar panels, wind and wave turbines, geothermal and hydroelectric power stations — and all stitched together by a European “supergrid’ stretching from the sunbaked deserts of the south to the windswept North Sea, from the volcanoes of Iceland to the lakes of Finland.

A lot of the framework for the European Supergrid exists already. For instance, Norwegian hydro is connected to Holland and has been supplying energy to Germany for 30 years. The UK has been connected to France for 20 years. Europe is widely interconnected – all that is required is a multiplication of existing proven technology.

Dr Czisch’s study shows that most of the technology will be wind energy supported by existing Norwegian and other European hydro.

It may sound like the stuff of science fiction only to people unfamiliar with and not interested in the history of technology and what we already have but this is a vision that the European Union wants to make a reality. The concept is gaining ground among policymakers, including leaders such as President Sarkozy and Gordon Brown, who are concerned about Europe’s carbon emissions and its steadily growing dependence on Russian gas.

Adam Bruce, chairman of the British Wind Energy Association (BWEA), is convinced that a European supergrid that could eventually banish polluting fossil fuels altogether, is only a matter of time.

“We are only limited by our own ambition,’ he says. “The capacity is there. There is the potential for wind alone to supply 50 per cent or more of our energy needs.’

Gregor Czisch, a German academic at the University of Kassel who developed the concept, claims it would cost EUR45 billion (£40.5 billion) to build. The numbers add up, he insists, and all of Europe’s electricity supplies could eventually be harvested from the wind, water and the sun.

Dr Czisch actually says the supplies will be mainly wind at the moment, as it is much cheaper than solar.

Such dreams of renewable energy certainly catch the imagination but for Britain, which generates just 1 per cent of its electricity from renewables — the least in the European Union after Malta and Luxembourg — the gap between ambition and reality seems particularly stark.

This statement is wrong – the UK does not generate 1% of its electricity from renewables, as stated in this article, in fact it generated ~5.16% of its electricity in 2007 from renewable sources, and these have increased since then. Maybe the author meant energy not electricity here? UK generation statistics can be found at the DUKES web site. Wind produced about 1.2%, hydro about 1% and biomass most of the remainder.

Claverton cannot disagree with the above statement. The gap is the result of the UK lacking an energy policy. It does not take much study and thought to realise that leaving electricity supply solely to market forces will always leave a situation of incipient capacity shortage. The fact that we have 1.2% wind, and Denmark 20%, merely points out the UK’s hopeless lack of planning and policy making and its insistence on relying on the pseudo market based ROCs approach.

The truth is that, despite the Government’s talk of a green energy revolution, Britain’s renewable energy industry is in crisis.

Claverton agrees that Britain’s renewable energy industry is in crisis. This is because the government has no reliable body of technically experienced people in place to give it unbiased advice and is relying on energy companies to lead they way, and the energy companies for whatever reasons have failed.

About 40 per cent of the UK’s power stations were built before 1975 and urgently need to be replaced. That is only if we intend to go on using these stations for baseload. At low cost they can easily be refurbished and used indefinitely as back up. But the combined impact of the credit crunch, falling oil and coal prices and the weaker pound now threaten to hold up wind projects just as the UK has raised its commitment to green electricity.

That is quite true. However, the government has committed itself to running massive tenders for road building, and these type of tenders could quite as easily have been for the construction of renewables. Why does the government not leave roads to the market? The answer is because it is another case where market forces do not work.

“The economics a year ago were already tight but the cost of capital and the foreign exchange movement have made it much harder,’ says Sarwjit Sambhi, director of power generation at Centrica, one of Britain’s Big Six power companies, which is trying to build a 250 megawatt (MW) wind farm off Lincolnshire, big enough to supply 170,000 homes. “We are not going to make investments below our return on capital so my goal will be to spend as little as possible until the economics improve,’ he said.

Again, the Big 6 energy companies are rational players and unless they are given specific rules they will always pursue the cheapest option, irrespective of our long term fuel security, and climate change.

Again this illustrates the dangers of relying on market forces, because the market signals will vary depending where you are in an economic cycle and what level fossil fuel prices are, and these clearly go up and down, but in the long term as fossil fuels deplete they are very likely to go up. This means investment in renewables will always be problematic since a market crash will follow a period of high fossil prices.

In last week’s Budget, the Government announced incentives designed to bolster investment in huge offshore wind farms and ensure that Britain hits its target of raising the share of electricity produced from renewable sources to 35 to 40 per cent by 2020.

So will they work? Not according to Jim Skea, director of the UK Energy Research Centre. He has just undertaken a big research project into how the UK can slash its carbon emissions by 80 per cent by 2050. “In none of the scenarios we looked at were renewables picked up nearly fast enough to meet the 2020 targets,’ said Professor Skea. “It will be a big struggle. We are not spending nearly enough.’

Actually from speaking to Skea, that’s not quite what he said. His scenarios were developed from a least cost model, planning to see how much renewables would be built by allowing for market forces . Effectively this type of modeling attempts to mimics how the governments thinks markets will react in the long term, albeit with market manipulation through carbon credits and ROCs etc. But Skea has acknowledged that he has not modeled for example the effect of government based decrees stating for an amount of renewables to be built, followed up by the issuance of government contracts to be bid for and built by the private sector, and then handed over and sold to the private sector to be operated. (This is how the Victorians built the sewers, the water supply system, the public roads, the natural gas system and so on. It is how we built the motorways, and how the government is spending vast amounts of money on new roads and motorway widening.)

Wind power, easily the most economically attractive form of renewable energy in the UK, remains hugely expensive when compared with gas and coal.

A recently approved gas-fired station in Pembroke will cost £1 billion and will be the largest in the UK, producing 2,000MW. It would cost six times as much to build a windfarm of similar capacity.

Yes, but this is simply not a valid or meaningful comparison The gas fired power station may have a low capital cost, but the dominant cost of the power it produces will lie with the huge amount of gas which has to be burnt to produce power. Thus any valid comparison requires comparison of the life time levelized cost and this is what Discounted Cash Flow is used for. Using DCF there is little difference in levelized power cost between gas, nuclear or wind.

While a strengthened subsidy regime and up to £4 billion of extra funding from the European Investment Bank (EIB) announced in the Budget are welcome, Professor Skea believes that far more radical action will be required, well we totally agree with him there including huge increases in research spending to accelerate the development of better technology, and a dramatic rise in the price of traded carbon emissions, up from £13 presently to £200 a tonne.

In other words Skea is saying that a proper government policy can cause the necessary infrastructure to be built. As stated earlier – a much easier and certain method is simply to announce a series of government tenders for tranches of wind power, award the contracts and then sell them on to the private sector. Just as the North Sea Oil exploration plots were sold off, and how contracts to build new motorways are sold off and then handed over to the Local Authorities to run.

But that is not all. Sceptics scoff that wind, wave and solar power are inherently unreliable. A solution could lie in back-up gas and nuclear plants and a far smarter grid that includes technology to balance the load at moments of reduced supply.

That is a correct choice of words, for that is all this is – scoffing – there is no actual facts to back up the implication that you cannot rely on wind, wave or solar. There are various well known and cost effective and already used techniques that can make renewables as reliable in a system as existing power stations, which are equally unreliable, but in different ways.

This could range from sophisticated centralised networks right into homes, where chips embedded in non-essential appliances could force them to switch off for brief periods as and when the grid demanded it.

Such technology exists but it is a world away from today’s grid, some of which dates back to the 1930s, and it will require vast investments and sweeping regulatory change to accomplish.

” vast investments” is an exaggeration. The cost of equipping every home with an intelligent device controller is quite low – technology for large industrial loads already exist (for many years) on every large grid – already steel works and cold stores switch off for up to 20 minutes on call, and privately owned emergency diesel generators are routinely called to start up when, for example, a large power station fails, as large power stations regularly do. In France, to cope with the unreliability of nuclear a sophisticated system – EJP tariff allows the grid to control loads even in consumers houses and factories – this is nothing new or expensive. In New Zealand the utility has switched local water heating off on demand for decades.

Regulatory changes will be needed, but these are hardly sweeping – its merely a matter of degree.

Until Europe’s governments grapple with the fine detail of these issues, the Continent’s dreams of a supergrid and a future free of fossil fuels are likely to remain in the realms of science fiction.

Again that is quite true, but it is merely a matter of realising the technical issues and getting on with it. Simply erecting a lot of pylons an substations is no different from what we have now. It amounts to about 10% worth of extra investment over what is already in place. We only have to look back at the construction of the UK National Grid, where up till 1927, before Lord Weir’s report, there were many local and disconnected power stations all operating highly inefficiently. The UK grid was constructed in less than 10 years, and at the same time the whole of Europe was doing the same thing. Once constructed in the UK, the load could then be met by selecting the most efficient power stations and sharing the standby/spinning reserve capacity. This resulted in a dramatic reduction in the cost of power, because in total far less spinning reserve was required, and only the largest most efficient power stations would operate.

This one of the reasons that the big 6 energy companies are not big fans of the supergrid – it would mean that their least efficient power stations in the European mix would become obsolete, as would a lot of the spinning reserve. This means they would sell less power station fuel as electricity, and their job is to sell as much fuel as possible on their shareholders behalf.

Ultimately, according to Professor Skea, an international deal at the UN climate talks in Copenhagen in December will be critical to achieving the political momentum required to achieve all of this.

Skea is probably right – but it requires government and decision makers to start using people who understand in detail the technological choices facing us, and not assume that policy can come from market forces.

We need to recall that during WW2, 250,000 (each of ) aeroplanes, tanks and anti aircraft guns (plus a vast armada of ships, submarines etc) were constructed and deployed, plus numerous airfields and vast concrete defences in a matter of years. This activity is far in excess of the effort needed to construct the 250,000 x 5 MW wind turbines needed to entirely run Europe. The turbines will of course have a positive NPV whereas the NPV of a tank, bomber, or anti aircraft gun is negative. Nevertheless, their vast WW2 destruction and construction exercise was what actually brought America and arguably the rest of the world out of the 1930’s depression.

Nevertheless, the BWEA’s Adam Bruce remains upbeat: “It’s certainly a challenge but these problems are not insurmountable. The more renewable energy you create the less it costs. People focus on the upfront capital cost but not the longer-term benefits.’
Copyright 2009, Times (UK).

3 Comments

  1. Reply

    There is an available, but so far unexploited wind energy technology available which could make offshore windfarms much more cost effective. Trouble is that it could put most of the present wind turbine supppliers out of business !!

  2. Reply

    Would Ferrand please amplify his comment.

    If this technology is available, why are none of the dozens of companies in the wind business developing it? If it makes things more cost effective, it would give them market lead.

  3. Reply

    The UK does not generate 1% of its electricity from renewables, as stated in this article, in fact it generated ~5.16% of its electricity in 2007 from renewable sources, and these have increased since then. Maybe the author meant energy not electricity here? UK generation statistics can be found at the DUKES web site. Wind produced about 1.2%, hydro about 1% and biomass most of the remainder.

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