Is the UK facing power cuts in another decade? Perhaps the biggest story of this week has almost gone unnoticed. There could be capacity supply gap of up to 55% in 10 years which will certainly mean power cuts.
A bit of history first. At one time the electricity system in the UK was state owned. In those days the majority of the power came from coal with some hydro. Then in 1956 the world’s first nuclear power station was built. By the 70’s nuclear power made a sizeable contribution (around a third), with a bit of gas. In the 70’s natural gas arrived from the North sea. The first energy crisis hit in 1973 and the miners went on strike at the same time. I remember the power cuts as a child and sitting in the dark and its made me concerned about energy issues ever since.
After the miners strike there was a wholesale switch to gas (I remember this at school) we used to play on the pile of coal and get chased off by the janitor- then one day it wasn’t there… Mrs Thatcher swept to power in 1979, took on the miners and privatised the electricity industry. In the 90’s there was a dash to gas powered generation, this cut carbon emissions, but made us dependent on the stuff. At the same time the first wind farms started appearing. Around 2000 the oil price started its increase towards its 2008 peak and a heap of subsidies for renewables started appearing including in 2010 the feed in tariff. At the same time as offshore and onshore wind started appearing, older plants (coal/gas/nuclear) started closing. We had record capacity supply surplus in 2003 but its been dropping ever since and is now about 1%. North sea gas went into decline and imports were more expensive. Electricity and gas prices soared. In 2013 the Tory led government introduced an energy act. This has two parts “Contracts for difference” this a sort of market led auction of low carbon generation and “Capacity Market” which is the same type of thing but auctioning off future and current generation.
The challenges we face are these.
- The Capacity Market isn’t working. Even very large future power prices are insufficient to incentivise new capacity.
- The whole structure of the grid has changed. There is now around 10Gwp of solar and at least 9Gwp of wind on the system which was never designed to cope with decentralised electricity. The distribution system is overloaded in parts of the country and needs upgrade.
- The government has cut carbon capture and storage support and announced all coal fired power stations will close by 2025.
- New nuclear stands on the brink of collapse but in any case could not be built in time.
What to do to avoid power cuts?
A dash for gas?
Difficult, we would need to build 3 gas fired power stations a year. We would also end up importing the gas. For all the hype about fracking there is too much opposition and gas prices are too low to justify it economically. Also in Poland it didn’t technically work, so we cannot be sure we can actually recover any.
Again this is a big ask. In principle we have 10 years but of course this a process not an event. 5.5% a year of a fall in electricity demand is possible but bigger than most falls in recent years. This is one area where history is on our side the trend on energy use is down. However if electric car sales carry on increasing as I wrote last week this will reverse.
We could put enough generating capacity in place easily to cover the shortfall (notationally). However without energy storage is would lead to problems. Luckily it looks battery prices are set to plunge over this period, although I don’t think we should just use this technology. Whilst offshore wind is expensive costs are falling and its a order of magnitude cheaper than the money offered in the auctions according to rumours. Solar farms are going ahead despite the complete cut in subsidy. This also against the direction the government is going in.
A lot more of these are planned but not enough to make up the shortfall. Will help though.
Cannot be built in time.
Writing this makes it seem a bit less scary. With a bit more gas, using less energy and renewables with energy storage and the use of interconnectors we can close the gap and avoid power cuts. However, time is not on our side and the government seems complacent and that is most worrying of all… Most of all don’t expect much of a cut in electricity prices but sizeable increases.