A switch in time

Wanted: a clear and sustainable sense of direction on our electric options. The answers could fix the future of power for decades. Roger East tests the current.

In a flurry of excitement, renewables went whizzing up the UK charts as the government’s favourite pre-Christmas energy topic. Gordon Brown set the tone, with a high-profile re-commitment to the EU’s 20/20 target (that’s 20% of total energy, not just electricity, from renewable sources by 2020). And the prime minister’s green speech had hardly faded when we thrilled anew to John Hutton’s vision of offshore wind’s coming of age.

“There is no way of making that shift to a low-carbon technology without visible change”

By 2020, Hutton told us, turbines all around our coast could be producing as much electricity as our homes consume – so maybe we should make up our minds to like the look of them. “It is going to change our coastline, yes for sure. There is no way of making that shift to a low-carbon technology without there being change and without that change being visible and evident to people.”

There was nothing fluffy about Hutton’s tone – but this kind of tough talking was welcome. Nobody could accuse him, or his growth- and competitiveness-focused Department for Business, Enterprise and Regulatory Reform (BERR), of letting green dreams cloud their thinking.

Part of his purpose, no doubt, was to use a renewables example (rather than nuclear new-build) to question the height of the planning hurdles that almost every kind of power generation has to jump. Planning looms large in energy policy – and not always as a problem. On the opportunity side, for instance, the so-called ‘Merton Plus’ planning policy statement announced in December should really ramp up the drive for decentralised power via the local authorities, who’ll have to see to it that new developments make a share of the electricity they use, via microgeneration and combined heat and power (CHP).

But surely things like microgen, and even the eventual promise of serious offshore wind, are all a bit peripheral to the main debate, when it’s really the right mix of the big stuff – gas, coal and nuclear power – that we need to keep the lights on?

High-risk fossil fuels

Actually, that’s the problem. Look first at the fossil fuels. Gas and coal do each account for something like a third of our electricity generation. And the government’s 2007 energy white paper, even in its “high carbon saving” scenario (the one where fuel policies and carbon prices kick in to drive down overall demand), forecasts that by 2020 we’ll be getting nearly twice as much power from gas as we do now (though not much more than half the current amount from coal).

As we’re constantly told, the main theme of the energy drama is how to reconcile cutting the carbon with ‘energy security’. Well, burning gas for electricity may be a whole lot cleaner than burning coal, but it’s nowhere near ‘low-carbon’ status.

And we have to import it now, which leaves us vulnerable to potentially unfriendly powers choking off our lifelines.

Our oil supplies scarcely bear thinking about in that light, what with the world apparently in denial about the trauma of passing the peak of production into a new era of increasing scarcity. Although it is almost irrelevant in our power generation mix – we get only 2% of our electricity by burning oil – a progressive switch away from oil-powered transport will surely ramp up our electricity needs. And where will we get all that extra power? By burning gas? Just look where that comes from! An increasingly assertive and tetchy Russia has the largest share of world reserves, and there’s scant comfort on the security front from looking to number two: Iran.

Dubious saviours

If our drama were pantomime, this would be the point when the audience got to chant: “What can save us?” And onto the stage would spring not just the winsome fairy ‘Renewables’, but two much more macho characters, ‘New Nuke’ and ‘Clean Coal’ – dressed either as heroes or as villains, depending on who’s directing this particular production.

The clean coal character [see ‘Can coal come clean?’, GF63] has less of a swagger than the new nuke contender, but its voice is nonetheless insistent. There are powerful global industry players in its entourage, and nobody who knows anything of China is fantasising that they’ll stop burning coal there any time soon. So the technology does have to be sorted out. Here in Britain, however, it all depends on who – if anyone – will underwrite the cost. The big lure of coal-fired electricity generation is that it’s cheap, but cleaning it will only come with a hefty price tag – always assuming that we can crack the technological issues of carbon capture and storage (CCS), both in collecting the carbon dioxide before it leaves the plant, and transporting and burying it somewhere safely underground or below the seabed.

For the first time in 30 years, there are plans afoot to build new coal-fired power stations in this country. The E.ON project at Kingsnorth in Kent is the first in line, so there’s a lot hanging on whether it wins approval (which ministers will have to decide in the near future if Medway Council’s recently postponed planning decision comes down in its favour). The company says it can be up and running by 2012, which would make it a rival with the latest combined-cycle gas turbine power stations as near-term plugs for that much-feared ‘energy gap’. But its ‘clean’ claims are strictly relative. It may be 20% better than the current coal-fired power from the same site, but it’s not actually a CCS plant, just designed to use that technology when it’s ready, some five years later at best. We need to decide whether this route is one for the UK to go down; whether it’s really a credible part of a low-carbon energy industry.

The dominant mood music in the government’s thinking on power is that we need every option. “We need multiple technologies,” says Hutton, “all low-carbon, and we need the widest possible range of partners.” You’d think, though, that the phrase “all low-carbon” would be the writing on the wall for UK coal-firing. CCS, if it can be made to work at acceptable cost, has its future elsewhere: as a clean-up technology for the gas-fired power stations that we will go on needing – and for coal in China.

But talking about ‘low-carbon’ has another significance in energy industry circles – it’s pretty much accepted code for ‘new nuclear’. Here, the arguments are familiar. Most of our existing nuclear power (18% of our electricity, when it’s all working) comes from plants near the end of their operational life. As these are progressively decommissioned, they need replacing.

By what? Nuclear new-build, largely on those same sites, is so widely regarded as the answer the government has been preparing us for, that the decision will be almost an anti-climax. It’s imminent; the consultation process, such as it was, ended in October.

“What the industry is really waiting for is a clear view of how it can make a profit”

How much will that decision change? It’s not as if the current ‘moratorium’ has choked off a huge swell of would-be new nuclear projects in the UK. What the industry is really waiting for is a clear view of how it can make a profit. And that, decision or no decision, depends on factors like what its liabilities will be for eventual decommissioning and for the great unsolved problem of radioactive waste disposal. It depends, too, on the price its electricity can command. On which subject, although the government has ruled out “taxpayer subsidy or investment in new nuclear power stations”, Hutton somehow sounds less than unequivocal when he says: “It is hoped that carbon pricing will be enough of an incentive. My gut instinct always is to look for the market solution first.”

Bad timing

“Our view,” Hutton has also said, “is that it would be perfectly possible for both nuclear and renewable energy to develop alongside each other without nuclear crowding out new investment in renewables.”

Well, perhaps. But there’s a real paradox in the new nuclear argument, and it’s to do with timing. Fire the starting gun now, and when might we realistically see new nuclear power stations coming on stream? Developing the projects, lining up the investors (who aren’t exactly beating down the door at the moment), getting planning permission (however streamlined or circumscribed that process might be made), all that takes years. Then there’s the build stage, including all the necessary infrastructure; the testing; the commissioning. We’re not talking the day after tomorrow, but 2020 plus. But what’s the basis of the assumption that the ‘energy gap’ they’d fill will be most critical in 15 years? Why not in ten years’ time, or in 2015?

Most of the same considerations apply, admittedly, to other heavyweight energy projects. “No really big power station we don’t already know about will be operational by 2015,” says Forum for the Future’s energy expert Iain Watt. Or take tidal power. As Jonathon Porritt says [see ‘Catch the tide’], it could be giving us 10% of our electricity in the 2020s, but building a Severn barrage is a massive undertaking, one for the long term.

On a ten-year timescale, then, this is the wrong way to look at our electric future. There’s a powerful argument that the whole ‘big power station’ mindset needs to change – and that one of the key areas for government to address is creating the kind of grid that supports a different model. The network of the future must cope with many smaller inputs, with distributed generation serving more local needs – right down to the local level, the community facility and the much-vaunted zero carbon home.

There’s still an important place in this for ‘large-scale renewables’ – and connecting up properly with far-flung wind farms is another real imperative for a fit-for-purpose grid. The UK is, after all, hugely well endowed with wind, wave and tidal power resources. We won’t be getting more than a tiny trickle of our electricity from the waves and tide between now and 2015, of course – though this aspect of the ‘marine renewables sector’ should be coming through at a modest level by 2020. Philip Wolfe of the Renewable Energy Association, presenting a scenario for getting no less than 49% of the UK’s electricity from (non-nuclear) low-carbon power sources, assigns an 8% share to wave and tidal stream.

Gathering wind

Truth to tell, large-scale renewables just aren’t that large-scale yet. They contribute a mere 4% of total electricity generation in the UK at present (and make up only 2% of total energy supply). The vast majority of that is land-based wind. Quite suddenly, however, we’re seeing a sea change on this score. A spate of new wind farms now in construction, or about to begin, should be coming into operation in the next few years. The British Wind Energy Association calculates that the installed capacity of land-based wind will rise from 1.9GW now (from 150 farms) to 4.7GW with the projects already over the planning hurdle, and there’s almost 8GW more in the planning process now (most of it in Scotland). Enough offshore wind is coming through to make that branch of the industry a sizeable player too. There’s over 5GW of new capacity being built or planned right now, more than ten times what is in actual operation. That’s impressive growth – in just the next few years, with power to add by 2015 – while Hutton’s 2020 vision takes it to another level.

But if that really is the vision, what’s the path? There’s a lot still to be done on planning. The slow and uncertain nature of that process, faced with widespread objection-prone attitudes, has put a real damper on the industry in recent years. Last spring’s planning white paper promised a more streamlined system, and not just for wind; indeed most people read it (whether with alarm or enthusiasm) as intended to help get new nuclear projects through.

Then there’s the money thing. If land-based wind is a grown-up industry, offshore is still in its adolescent years (with wave and tidal still in their infancy). It’s crucially dependent on the price support regime. The government has now promised to make the Renewables Obligation more sophisticated, rather than a ‘one size fits all’ incentive for green electricity. The proposed changes involve banding the support it provides at different levels for the various renewable technologies. However, we won’t really see the effects kick in for five years or so. A recent Cambridge Econometrics study drily noted: “As the proposed changes require primary legislation, it is unfortunate for the government’s [2010] 10% target that they can only be introduced in April 2009 at the earliest.” That study’s conclusion, that “the government will miss its renewables electricity target for 2010 and [15%] 2015 by wide margins, but will nearly meet its [20%] target for 2020”, may be a little pessimistic, but does still project that wind’s great leap forward will be kicking in well in advance of anything much from new nuclear.

Climate for investment

Each individual decision on power issues plays its part in shaping our electric future. Investors may look in vain for certainty, but they might reasonably feel entitled to more clarity. That’s why, to take just one example, it’s important to know whether small-scale gas-fired CHP will be made eligible for financial support as a low-carbon technology. It’s also why recent Conservative proposals to change the whole support regime for renewables have upset some in the industry. (Others, though, see merit in their idea of replacing the Renewables Obligation’s tradable certificates for green electricity production with a simple ‘feed-in tariff’, which gives each technology a known price point per unit of power to match against its costs. “It works in Germany,” they cry...)

Above all, the government’s energy policy needs to be more forthright about its overall direction of travel. That’s what investor confidence really depends on – in large-scale renewables, or microgen, as in any other business sector. Talking up offshore wind won’t have much enduring effect if it’s overshadowed by some kind of special regime for new nuclear, or if the go-ahead is given for new coal plants that simply aren’t compatible with a long-term decarbonised vision.

Decisions made in the coming months will open some doors – and close others. The focus on low-carbon homes and communities gives the government the opportunity to get firmly behind the decentralisation of power. And it really could be crunch time for large-scale renewables. Wind power can make a difference by 2015 – and, with wave and tidal power, the potential is there for this sector to be the mainstay of a low-carbon power industry in the decades to come. Nuclear new-build and ‘clean coal’, on the other hand, have nothing to contribute in the next decade. Unable to deliver when we might most miss those extra watts, might they even be revealed as irrelevant in the longer term?

What price solar?

Demanding change

Roger East is Green Futures editor.

5 January 2008

Roger East

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