EU Referendum

Showing posts with label power cuts. Show all posts

Booker+libya[i-Booker+libya]Anyone who thinks our energy supply is about greenery and "carbon footprints" is living on another planet. There are few things more intensely political, more so when we are about to become a net importer of gas which, for the foreseeable future, is to provide the mainstay of our electricity generation.

It is thus more than a little bit interesting to see two apparently disparate issues – the prospect of power cuts in the not too distant future, and the release of the "Lockerbie bomber" – come together, the links assembled by Christopher Booker in the main story for his column.

No reasonable person who has studied the Lockerbie issue, and read the transcript of the trial of Abdelbaset Ali Mohamed Megrahi, can come to any other conclusion other than – at the very least – he was not given a fair trial. More specifically, such are the gaping holes in the case, and the political ramifications behind the investigation, that his guilt must seriously be in question.

That leaves open to speculation as to why the British government should have put itself so much out on a limb to engineer the release of Megrahi, over and above the desire to prevent the case coming to appeal, with the risk of embarrassing disclosures. To that effect, there has been much speculation about trade deals with Libya, and in particular the pursuit of "lucrative oil and gas contracts".

However, as Booker points out, it is the need for gas more than oil which explains why the British government has been so keen to make friends with Libya, going back to Tony Blair's visits to Gaddafi in 2004 and 2007.

The primary concern is that, within six years we face an unprecedented energy crisis, arising from the loss of 40 percent (20 gigawatts) of our generating capacity, through the closure of eight ageing nuclear power stations and nine coal and oil-fired plants under an EU's large combustion plant directive.

The prospect of power cuts arising from capacity shortages – much discussed on this blog – has more recently won rather wider publicity through the dismal distortion by Tory propagandists of an obscure government graph. But, as we had already pointed out, behind the scenes, a "silent revolution" in the energy industry has been taking shape, with a new "dash for gas" to replace missing capacity.

This, Booker tells us, arises entirely from the failure of the government's own energy policy, its delays in getting the nuclear programme started and its insane reliance on wind power. But, as explained by Tony Lodge in his CPS pamphlet, Step off the Gas, there is a huge downside to this new "dash for gas", just as our own North Sea gas is fast running out.

Apart from the fact that using gas for electricity is highly wasteful (losing half its energy value), the government's hope that 70 percent or more of our power can come from gas (80 percent of which will have to be imported) is astonishingly reckless, in two ways.

First, we would be heavily dependent on countries which are politically unreliable, such as Russia or Qatar (which is vulnerable to the closure of the Straits of Hormuz). Second, gas prices are likely to soar, as other countries chase the same supplies, and we would be particularly vulnerable to price hikes through our lack of gas storage facilities.

This threatens to raise electricity prices high enough to plunge millions more households into "fuel poverty", defined as those which spend 10 per cent or more of their income on lighting and heating. (Ofgem calculates that every 10 per cent rise in gas prices pushes another 400,000 homes below this "poverty" line.)

And that is why, in gambling that we can derive 60 percent of our future power from imported gas, the Government has been so keen to cosy up to Libya. It is there that BP has already embarked on a £550 million project to find and develop enough liquefied natural gas (LNG) to give Britain the secure supply needed to keep its lights on.

Such deals, of course, are the stuff of real politics – no one ever said it was anything other than a dirty business. And it may have helped to send Megrahi home, but it won't be enough to save millions more British families from finding it harder than ever to pay their electricity bills. As with everything else, there is always a price to pay. And it is always the "little people" who pay it.

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power-cut-dinner[i-power-cut-dinner]Booker gets to follow-up on the "power cuts" story today in The Daily Mail.

Necessarily written in the breathless style for which that paper is so loved, you have to read well past the headlines and deep into the text to find the core of our piece yesterday. But Booker does tell us that the government hopes to save Britain's electricity supplies from disaster with a scramble to build dozens more gas-fired power stations.

This means, writes Booker, that we shall be looking to gas to provide anything up to 80 percent of our electricity ... at a time when world gas prices are likely to be soaring. He adds that, even if, by this extremely risky gamble, we might manage to close the energy gap now fast approaching us, it could only mean a further massive hike in electricity prices, driving millions more into "fuel poverty".

The price-hike is, of course, the issue. With the torrent of new CCGT plants coming on-stream (DECC estimates that there is 10GW new capacity in the pipeline), there is little real risk of power outages, especially if we see what amounts to rationing by price.

Against current estimates, we are likely to see lower than anticipated demand as high energy industries (such as aluminium production) depart these shores, while hundreds of thousands of people "self-disconnect" from the electricity supply.

This is a little-appreciated development in the electricity supply industry. While compulsory disconnections used to be an unwelcome feature of any downturn, these no longer happens. Instead, delinquent customers are issued with pre-payment meters. Thus, in theory, supply is maintained. Customers then "choose" to disconnect themselves when they cannot afford to top up their meters.

With the advent of "smart" meters – at an estimated cost of £7 billion – that facility will be extended, as suppliers will either be able to ration or cut-off customers entirely, at will, giving a new dimension to controlling supplies. Given an anticipated shortfall, consumption limits can be imposed on selected customers, enabling suppliers to manage peak loads better.

For this reason also, the 70s-style "power cut" is not likely to happen. The political cost of allowing the lights to go out "all over England" is too great and the impact will be thus "managed".

The big problems, as Booker indicates in his piece, is the longer term gas supply problem. While numerous industry sources report lower than expected demand, increased supplies and falling prices, long-term forecasts are pessimistic. A substantial demand-supply gap of more than 500 million tons of LNG is expected to develop by about 2012.

This is more of a financial than a resource problem, as infrastructure and development projects have been cancelled or delayed as a result of the "credit crunch".

The problems are solvable, but they are going to cost, all adding to the long-term price pressure on supplies. Add temporary supply miss-matches and spot prices could soar, just as the UK is increasing its reliance on the fuel. The price-hikes we have seen recently were only a rehearsal. The real crisis is yet to come.

It is instructive, though, to see how readily other media outlets and commentators have bought into yesterday's Telegraph story, although even that paper could not quite make up its mind as to who to blame. While the leader had Labour in the frame, Irwin Stelzer later put the responsibility at the door of all politicians.

Stelzer is closer to the truth, albeit that - despite the excitable scribbling that we have seen of late - it is price and not capacity that is the issue of the future. And that situation is unlikely to ease as long as the Conservatives are slaves to the green agenda – and the EU – and continue to support the fatuous wind-based renewable policy, as well as carbon capture which is holding back coal exploitation.

If the lights go out, therefore, it will be because we can no longer afford to keep them burning.

COMMENT THREAD

power+cuts[i-power+cuts]The front page lead in The Daily Telegraph raises the spectre of massive electricity power cuts, a subject Booker and I have been addressing for some time.

However, the author of the Telegraph piece – none other than Andrew Porter, political editor - plus the copious references to the shadow energy and climate change secretary, gives the game away. This is a "silly season" filler placed by the wonks in the Conservative Party HQ as a means of getting an easy publicity splash for an otherwise invisible shadow cabinet.

Needless to say, in full rah-rah mode, Tory Boy blog gives the issue full-frontal treatment, although the alarmist tone is somewhat deflated by one comment which notes that, apart from the Bridgenorth and Hatfield coal-fired power stations (3GW), there are several planned capacity enhancements at Barking Reach, Immingham, Damhead Creek, Kings Lynn and Sutton Bridge which will make up most of the shortfall.

Those many of us who have followed the energy market closely would tend to agree. Behind the scenes, in an unheralded and generally unnoticed shift in policy, there has been a dash for gas, with the very rapid building of extra capacity.

In theory, these new CCGT stations will provide back-up for the increasing number of windmills that we are supposed to be building. But since the renewable programme is never going to get off the ground, these gas stations will become the core of our primary generation capacity.

This, as we remarked back in June, is likely to be sufficient to ward off any prospect of power cuts, the issue having moved from one of shortage to one of cost. With a heavy reliance on gas, there will be times when supplies are tight and we will have to be buying off the spot market at inflated prices. We may avoid the cuts, therefore, but there will be a very high price to pay.

Using gas to produce electricity is in fact a waste of resource. This product is best suited for supplying domestic heating and cooking and to use it for a purpose for which there are other, better energy sources – such as coal and nuclear – amounts to criminal dereliction.

That is where there battle lines should now lie, with an urgent need to abandon the fatuous attempts at building more and more windmills – a policy which the Tories support – and an emergency drive to build rapidly new nuclear power stations.

However, with the Tories behind the curve, as always, expending their ingenuity in attracting "off-peak" headlines rather than producing off-peak electricity, it is unlikely that we are anywhere closer to developing a rational energy policy. But at least the Tories can congratulate themselves on achieving some cheap publicity, even if we would rather have cheap electricity.

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