Energy and Climate Change Committee - Draft Energy Bill: Pre-legislitive ScrutinyWritten evidence submitted by Andrew Mackay
Summary
The Government’s energy and climate change goals to deliver secure energy on the way to a low carbon energy future and drive ambitious action on climate change at home and abroad is laudable. Unfortunately, it is not working now and will never work in the future, because of the reliance on fossil fuels to provide back up for intermittent generation of electricity from non-thermal renewables.
The failure of Government energy strategy to force change to non-intermittent supplies of electrical capacity from non-thermal renewables like wind wave and tidal will inevitably lead to daily brownouts and blackouts becoming a feature of daily life.
The ability of intermittent and random renewable generation to decarbonise electricity using Combined Cycle Gas Turbines (CCGT) as balancing plant is very poor. A CCGT plant plus wind will burn just 7.6% less gas annually than a CCGT plant running 24–7
A secure and reliable energy supply is vital to our economic and social wellbeing. Existing energy markets and regulatory frameworks have delivered reliable and affordable energy over the last century on the back of burning relatively cheap fossil fuels like oil (pre 70s) and coal and natural gas up to the present day. Over the next decade, around a fifth of existing thermal power plants are due to close making the UK even more reliant on burning dwindling supplies of imported coal and natural gas to raise steam to keep the lights on. Assuming a projected increase in electrical demand of just 7% will result in doubling the amount of electricity that needs to be generated in just 10 years.
The Draft Energy Bill lacks vision. There is no incentives to encourage innovation and invention in the field of renewables, in fact quite the reverse, the Bill in its present form will incentivise maintaining the status quo where all future non-thermal renewable electrical will continue to be intermittent and 100% reliant on dwindling supplies of imported natural gas until the exporting countries decide to hoard supplies for their domestic use.
Electricity market reforms are vital to incentivise the generation of secure and reliable electricity 24–7-365 from intermittent sources of non-intermittent renewable energy resources such as wind, wave and tidal streams that does not rely on the burning of any fossil or so called bio-fuels to provide back up.
To meet governmental climate change goals it is imperative that we stop burning fossil fuels altogether. To incentivise and create much needed “investment surge” in electricity generation over the next decade to enable the generation of twice as much electricity we must move away from intermittent renewable generation to meet our climate change goals.
The legal and moral imperative for the UK to cut significantly our carbon emissions and to be a world leader in the climate change challenge will never be met by the continuation of this flawed energy strategy of generating random pulses of electricity subject to the vagaries of the weather and tides.
We must decarbonise Britain’s electricity generation, to meet our Carbon Budgets, by generating safe and secure renewable electrical capacity not intermittent and unreliable electricity that requires fossil fuels to provide backup.
Carbon Capture and Storage (CCS) will never play a role in our future energy mix because the numbers do not add up. There will be no coal left to burn in the world by 2040 so spending money on this dodgy enterprise now will never bear any fruit in the future in a planet devoid of fossil fuels. The government’s assumption that there is a trillion tonnes coal left is based on pure conjecture.
The electricity market needs reform to reduce the risk and cost of capital for all low carbon technologies. The most effective way of achieving a safe and secure electrical supply is to stop paying Renewable Obligation Certificates (ROCs) for intermittent supplies of non-thermal electricity by the year 2015. This will, at a stroke, force companies in the renewables’ sector to modify their generators to deliver high quality firm synchronous electricity that does not rely on imported fossil fuels from politically unstable counties who could hold us to ransom in the future.
The United Kingdom has already establishing itself as a “hub for intermittent renewables expertise” which will be of no benefit when there are no fossil fuels left to burn. Forcing the moribund renewable energy industry into a bright new future of secure renewable electrical capacity by withdrawing ROCs for intermittent electricity by 2050 will attract inward investment from around the globe.
The UK Carbon Capture and Storage Industry may be worth £6.5 billion a year to the UK by late in the next decade as we export UK expertise and products but it will never happen. The challenge to the nuclear industry to build a new generation of reactors without public subsidy is not going to happen either. There are much simpler ways of raising steam from non-thermal renewable energies.
The challenge can be achieved in a “big bang” by scrapping ROCs for intermittent non-thermal renewables. This will give investors the chance to get a very good return on their investments. It is probably already too late for a “phased approach” and decisive action is required to move away from ALL reliance on fossil fuels.
Gas generation cannot continue to play a critical role after 2020 because the costs of “buying in” this fuel will have quadrupled several times by then and the UK will have to buy twice as much of it by then to prevent rolling blackouts. The “government calculations” as supplied by the renewable energy industry on how much gas will be saved from combustion are seriously flawed—there will be perhaps be a nominal saving of around 7.6% for generation purposes but gas in this sector only accounts for a third of total gas consumption.
A reliable and flexible electricity source to meet core demands now and balance demands in the future is unachievable with intermittent renewables.
Strategies on energy security based on a never ending supply of natural gas to balance intermittent generation are seriously flawed and based on the uncorroborated hearsay “evidence” of the renewable energy industry. Commonsense, dictated by the certainty that the world will run out of fossil fuels one day in the near future, will prevail. This Draft Energy Bill is lamentably short-sighted, inadequate and not-fit-for-purpose because it does absolutely nothing to prepare for that day.
The Government’s determination to move forward has had the opposite effect and has selected reverse gear in a box full of neutrals. This Bill is a wasted opportunity because it simply gives us more of the same based on the erroneous assumption that intermittent generation backed up by fossil fuels is the only option available.
The government should not be led by an industry devoid of innovation and demand renewable electricity 24–7
The government should not allow any more thermal power stations to close but convert them to run on renewable heat derived from the kinetic and potential energies in wind, wave and tidal streams. Renewable heat can easily be stored in giant thermal accumulators built underground adjacent to existing fossil fuel generators at a cost of the £1 billion that has already been set aside for the harebrained CCS “experiment” that will never work.
Supplying our existing stock of thermal power plants with heat derived from infinite renewable energy sources will give UK plc the economic advantage of electricity too cheap to meter.
Time is of the essence and the sooner we abandon supporting the intermittent renewable energy experiment and start providing alternative heat sources to create “green steam” the better.
HMG 1: Energy is essential in almost every aspect of our lives and is fundamental to the success of our economy. The Annual Energy Statement, published in November 2011, set out the Government’s plan to support the transition to a secure, safe, affordable and low-carbon energy system, and mobilise commitment to ambitious action on climate change, internationally.
AHM: I agree, energy is essential and fundamental to the success of our economy but renewable energy in its present format is it not delivering secure, safe, affordable and low carbon electricity. Reliance on dwindling reserves of fossil fuels makes it difficult to garner commitment to ambitious action on climate change internationally.
The Erroneous and dangerous assumption here is that there is a never ending supply of fossil fuels and that supply and demand market forces will not apply.
Comment: The UK’s economy and balance of payments will be wrecked unless our reliance on burning fossil fuels to raise steam is broken completely.
Solution: The obvious solution is to convert the massive renewable energy resources directly into renewable heat and store it. Secure, safe, affordable and low carbon thermal electricity can then be generated either as base load or load following to meet all of the UK’s electricity demands from thermal storage without burning anything.
HMG 2: The Government is committed to achieving its climate change and renewables targets, including a 34% reduction in its CO2 emissions by 2020 (relative to 1990); at least an 80% reduction by 2050; and ensuring that by 2020, 15% of the energy consumed in the United Kingdom comes from renewable sources.
AHM The government’s commitment to achieving its climate and renewables’ targets, including a 34% reduction in CO2 emissions by 2020 works out at a constant reduction of 2.333% since 1990 but this has not come close. The UK’s supposed “reduction” in CO2 emissions has more or less flat lined since 1990; to achieve the 34% reduction by 2012 there will need to be a steady reduction of 8.75% for the next 12 years and that is not going to happen for the reasons outlined below.
Erroneous Assumption: The Government claims that for every MWh(e) electricity generated from renewable resources saves something like 43 g/MWh(e) generated from a balancing CCGT plant.
Comment: This is not the case; it has been calculated that a CCGT balancing plant cutting in and out and ramping up and down subject to the vagaries of renewable electricity saves only 7.6% in terms of actual fuel consumption annually. Instead of relying on the theoretical saving in GHG emissions it would be easier to measure the gas consumed over a ten day period without balancing and multiply this consumption by 36.5. Comparing this number with the actual gas consumed over the year by the balancing CCGT plant will establish that there is only a 7.6% decrease in CO2 emissions annually. A typical modern CCGT plant running 24–7
Solution: The government should accept that intermittent generation from renewables is a failed experiment and move on. The government should also issue a warning that after 2015, ROCs will no longer be paid for low quality intermittent electricity but will be paid out for secure firm power uninterrupted electricity delivered in tranches of 24 hours minimum. This will stimulate innovation and the country benefits by not having to import increasingly expensive fossil fuels to provide back up for intermittent renewable electricity.
HMG 3: Moving to a secure, more efficient, low-carbon energy system in a cost-effective way is extremely challenging, but is achievable. It will require major investment in modern technologies: to renovate our buildings; to provide for the electrification of much of our heating, industry and transport; and to move to cleaner power generation. It will also require major changes in the way energy is used by individuals, by industry, and by the public sector.
AHM: It is not achievable. Existing “modern technologies” like intermittent generation and CCS are required to cover up for the inadequacies of an industry that has failed to deliver cheap firm electrical capacity.
HMG 4: Through this Energy Bill, the Government aims to further its objectives to meet the UK’s decarbonisation and renewable targets, at least cost to consumers. The Government aims to ensure continued secure energy supplies whilst creating the right conditions for markets and private investment, through greater regulatory certainty and clarity. It will do this through its programme of Electricity Market Reform (EMR); through strengthening the regulatory framework by further clarifying the role of the regulator, Ofgem; and through establishing an Office for Nuclear Regulation (ONR). In addition, the Bill makes provisions ensuring developers of offshore generating stations can test and commission offshore transmission infrastructure to export power without committing a criminal offence, before transferring the infrastructure to an offshore transmission owner. Finally, the Bill makes provisions for a measure to enable the sale of Ministry of Defence (MOD) held assets, which pump aviation fuel to United Kingdom and United States airbases as well as some civilian airports—the Government Pipeline and Storage System (GPSS).
AHM: The only “secure energy supplies” are those issued from fossil and nuclear thermal power stations. The cost of generating intermittent electricity from non-thermal resources like wind, wave and tidal streams is prohibitive for a tiny true reduction in emissions of just 3 gCO2equiv/MWh(e) as outlined above. This is the reason why we are not making any headway at all in GHG emissions and never will if the government continues to subsidise not fit for purpose intermittent generation from non-thermal renewables.
Erroneous Assumptions: The EMR’s programme assumes that there will be no more invention and innovation in the renewable energy sector. There are already inventions that do not require “offshore transmission infrastructure”.
Solution: The government should stop subsidising not fit for purpose intermittent generation that requires fossil fuelled thermal backup 24–7-365.
HMG 5: Electricity plays a part in almost every aspect of modern life and is vital to our economic and social wellbeing. Since privatisation in the 1990s, our competitive market and system of independent regulation has served us well, delivering reliable and affordable electricity. It is crucial for the UK’s international competitiveness and economic development that this continues. However, we face a number of unprecedented challenges in the coming decades: we must decarbonise electricity generation: it is vital that we take action now to transform the UK permanently into a low-carbon economy and meet our 15% renewable energy target by 2020 and our 80% carbon reduction target by 2050. To put us on this latter trajectory, power sector emissions need to be largely decarbonised by the 2030s. Without reform, the electricity sector would have an emissions’ intensity in 2030 of over three times the level advised by the Climate Change Committee. Electricity Market Reform (EMR) will put in place the institutional and market arrangements to deliver the scale of change in the power sector needed to meet the UK’s carbon budgets, including the recently-adopted fourth carbon budget; security of supply is threatened as existing plant closes: around a fifth of existing capacity is expected to close over the next decade and more intermittent (wind) and less flexible (nuclear) generation will be built to replace it. These changes to our market create an investment challenge, in particular for flexible plant, which will be needed during periods of peak demand or still days (ie when the wind doesn’t blow), but which would operate less often than now and therefore have less certain revenues. If we don’t act, a central scenario we have modelled suggests that in some years we could see blackouts affecting up to 2.5 million homes. 1 demand for electricity is likely to rise: despite the improvements in household and non-domestic energy efficiency, which will be generated through the introduction of the Green Deal and the roll-out of Smart Meters across the country, overall demand for electricity may double by 2050 due to the expected expansion in the uses of electricity with the electrification of transport, heat and other carbon intensive sectors; and electricity prices are expected to rise: increases in fossil fuel costs and environmental policies are likely to lead to higher bills in the future, even without factoring in the huge investment needed in new infrastructure. The Government is committed to reducing the impact on consumers by making sure investment takes place in the most cost-effective way possible.
AHM: There is nothing to be gained in building more and more intermittent renewable generation and backing it up with nuclear generation. Both are low carbon but the advantage lies with nuclear because it can provide firm capacity 24–7
Erroneous Assumptions: It is “assumed” that all electricity generated has the same value to economic and social wellbeing but this is not the case.
Comment: The right kind of electricity is secure firm electricity that is available 24–7
Solution: The government should not allow any more thermal power stations to close but force them to convert them to run on renewable heat derived from the kinetic and potential energies in wind, wave and tidal streams. Renewable heat can easily be stored in giant thermal accumulators built underground adjacent to existing fossil fuel generators at a cost of the £1 billion that has already been set aside for the harebrained CCS “experiment” that will never work.
Supplying our existing stock of thermal power plants with heat derived from infinite renewable energy sources will give UK plc the economic advantage of electricity too cheap to meter. Besides, the UK will not be able to afford to pay for coal, gas or oil as the prices of these commodities will begin to skyrocket over the next decade. Time is of the essence and the sooner we abandon supporting the intermittent renewable energy experiment and start providing alternative heat sources to create “green steam” the better.
I am keen to provide oral evidence on any of the issues outlined above to the Committee and aim to follow up in more detail on many of these points during the inquiry. However, I realise that the renewable industry will have taken up all of the available slots to prevent different points of view being expressed. I trust that you will appreciate that the Committee will want to consider a wide range of opinion to facilitate a balanced outcome.
June 2012