Writing in Renewable Energy Focus, Matt Lovell recently highlighted that serious questions still remain unanswered about the UK’s energy strategy and that clarity is urgently needed.
It’s clear that with uncertainty increasing and a number of the UK’s gas, coal, nuclear and oil power stations now approaching end of life, the market urgently need clarity.
Central to any strategy will have to be a pivot around green energy; global warming and climate change are two massive worldwide issues, and a big change to our behaviour regarding power generation and consumption is well overdue. But what are our options and plans regarding long-term power generation?
By 2020, the UK and many other EU countries have agreed to significantly increase their use renewable energy.
The increasing rise in wind generation has resulted in a debate regarding wind farms, with critics often labelling them eyesores and a threat to the environment. The acceleration and approval large-scale solar plants may further intensify the pressure on wind energy but recent unexpected government changes in financial support may challenge this.
Since 2010, the UK has been a net importer of electricity, mainly from France, the Netherlands and Ireland. Net imports have remained largely unchanged over the last four years, equating to 4.9 TWh, or 5.2% of our total electricity usage. By 2020, it is possible that we could be importing as much 12 GW of electricity, which does not create a cost-effective solution for anything other than for managing peak demand.
A wider issue is the combined loss of coal and nuclear plant capacity within the next 10 years. In total, eight nuclear reactors are due to be decommissioned by 2025, equating to a total of 14 GW of capacity. The cost of decommissioning nuclear plants, which takes up to 60 years, will also place further constraints on any new investments.
So which direction could, and should, our electricity generation strategy take? Nuclear generation capacity in the aftermath of events in Japan has slowed significantly across the globe. This has been compounded further by the economic and financial risks required to build, run and decommission further nuclear power stations.
As I’ve discussed in the past, financing nuclear power in-and-amongst itself need not be a bottomless pit. A number of Asian stations have been built on time, on budget and at significantly less sums than those mentioned for the new European plants. Whilst there are economies of scale, Western designs are often bespoke which causes costs to balloon.
There is a broad consensus that fossil fuel generation, as a whole, will continue to decline but in the short-term it is hard to escape the view that an ageing fleet will either need to be replaced or kept running. Renewable generation shifts the merit order but cannot be relied upon during the colder months of the year and thus in lieu of large scale capital investment, I find it hard to look beyond a repeated series of capacity auctions, mechanisms and short term fixes.
Make more of what you have
Assuming a challenging investment landscape, existing assets will continue to make up the bulk of the generation mix. Focus should therefore be placed on opportunities to increase the efficiencies of our existing power generation sources in the short term and reducing the transmission losses across our national networks.
The same logic can, and should, be accelerated to make our homes to make them efficient and self-sufficient. Reducing the domestic peak load demands will reduce the scale of the central generation investment limited and achieve our carbon reduction targets. But this will only work with the correct central legislation and support.
In the US, the development of shale gas power plants has accelerated enormously over the last 5 years as recent discoveries of gas reserves have challenged the significant legacy of oil and coal-fired power plants. The UK has not experienced the same level of transformation, and fracking still has to gain widespread public support. But the impact of a growing global LNG market should not be discounted.
Gas-fired power generation for short-term capacity replacement will be good for another 40 years and should be built with CHP but for the longer term, we need to invest in technologies to store electricity more effectively.
We must acknowledge and push for far greater levels of renewable generated capacity and, as difficult as this will be, we must also reduce our overall electrical consumption.
Another area to explore more is hydro power. While there are obvious environmental issues to consider, it has the potential, alongside other biomass generation technologies, to balance out our reliance on wind and solar. Over the next 20 years, the true cost and scale of decommissioning our existing nuclear fleet will be more clearly understood, which may alter our desire to build more nuclear power stations.
What is clear, however, is that there remains a lack of leadership and decision-making in regards to our short and long-term power generation strategies. If ever there was a time for some real clarity from the Government it is now.If you’ve found this blog helpful and would like other topics covered, please feel free to drop me an email with suggestions. You’re welcome to subscribe using ‘Subscribe to Blog via Email’ section and this will get you the latest posts straight to your inbox before they’re available anywhere else