Why the UK is hopelessly unprepared for winter
Years of green confusion and ill-informed Government action have distorted the energy market to our national detriments. Michael Kelly calls for new thinking, followed by action.
After the defence of the realm, one of the fundamental responsibilities of government is the provision of adequate, secure, affordable and environmentally friendly energy.
It is not necessary that government should make the actual provision, but it should assure that the provision is workable and effective. By any measure, the UK Government has been in dereliction of its duty over the last 20 years, and especially the last 10.
One of the operating definitions of a third-world country is that the energy supply is unreliable and in short supply.
The headroom for the supply of winter energy has shrunk from more than 20% 20 years ago to 6% for next winter (including special back-up measures without which the margin is almost zero), and in one severe winter this will result in mass blackouts. Even in the benign winter just gone, there were two crisis points in energy supply.
Governments which drive a country towards third-world status are endangering their citizens. The privatisation of the energy supply 30 years ago meant that the Government's role since then has been at arm's length, ensuring that the conditions for required investment are benign. Here I want to focus on the role of environmental legislation that has brought the country to its present parlous position.
The wafer-thin winter energy margin is the result of several EU directives including the Industrial Emissions Directive (IED), the successor to the Large Combustion Plant Directive (LCPD). The IED constrains the UK flexibility in the construction and management of its conventional electricity generation. The downward pressure is exacerbated by the UK-only carbon price floor and the recent announcement that all coal-fired power stations will be gone by 2025. The LCPD was signed in 2008 and we are already halfway in time towards the target date of 2025, by which time, according to a recent report by the Institution of Mechanical Engineers, the 'closure of UK coal and nuclear plants [is] to create [an] electricity supply gap of up to 55% by 2025'. Britain has lost more than 15.4GW of dispatchable electricity generating capacity in the past five years, with less than 35% replaced on the same basis; this has resulted in especially tight capacity margins, and the emergency actions were needed over the winter and spring to ensure the lights stayed on, The only saving grace is that peak winter aggregate energy demand has decreased by about 10% over the last decade in part because of the closure of energy intensive industry.
It is a tragedy in this country that we have a Committee on Climate Change (CCC) and not an energy and climate change committee.
As it is we get the dire warning of the future climate being used to drive targets for CO2 emissions reductions that are not properly weighed in the balance: this has resulted in an absolute privileging of environmental concerns over security and affordability of energy supply in both the public discourse and Government policy.
It is precisely this absence of balance that has produced the economic environment where private investors are not coming forward to secure our future energy security. The CCC has offered carbon budgets for the future which at present are being met with renewable energy projects that that are subsidised as they are deployed. Private investors in, say, combined-cycle gas turbines see a playing field that is tilted against them. As in Germany, the high efficiency of their technology has to be downgraded because renewable energy is privileged over gas-fired electricity unless the former is not available.
The constant acceleration and deceleration of the turbine reduces the life of the shaft, and the electricity price has to go up (i) to compensate for the shortened service life of the shaft and (ii) to compensate for the time when the turbine is not producing electricity that it could have done. This double hit means suppliers of energy by conventional means are demanding subsidies to re-level the playing field.
The history of successful technologies shows producers of electricity should not be subsidised: it is intrinsically bad for economic competitiveness.
Six years ago we lost our aluminium smelters in the face of an upward ratchet of electricity prices, and we are at proximate risk of losing our steel production in part for the same reason. Note that green energy surcharges do not apply to energy intensive industries in Germany.
The supreme irony is that our lost production is made up by cheap imports made in China with coal-fired electricity, so that the original problem of global carbon dioxide emissions is exacerbated by our domestic measures.
In the national interest we need to follow the decade where environmental concerns have trumped all else, to one where security and affordability of energy supply must be privileged. This is doubly important as we make our way in the global economy post-Brexit. Hobbling our future efforts with more costly energy for environmental reasons not matched elsewhere is a form of national psychosis.
It is hopeful to note a part of the last speech made by the new Prime Minister during her campaign for the job: "I want to see an energy policy that emphasises the reliability of supply and lower costs for users." Let's follow this with action.
Professor M J Kelly is Emeritus Prince Philip Professor of Technology, Department of Engineering, University of Cambridge.