The Economics of Renewable Energy - Economic Affairs Committee - Contents


Examination of Witnesses (Questions 20 - 39)

TUESDAY 6 MAY 2008

Professor AbuBakr Bahaj, Professor Tony Bridgwater and Dr Simon Watson University and DR SIMON WATSON, Loughborough University, examined.

  Q20  Lord MacGregor of Pulham Market: Going back to wind power, given that the turbines only turn when it is windy, to what extend do wind farms have to be backed up by regular fossil fuel or nuclear generation? Are there any potential technical solutions to that particular problem? Could you also comment in that regard as to the relative merits and costs of offshore and onshore?

  Dr Watson: There is something called the intermittency of wind power and I think we prefer to call it the variability rather than the intermittency. In terms of variability of wind power, if you take it in perspective in terms of a power system, the way a power system is run conventionally you have a large number of sources of demand and those sources of demand are very variable. However, if you aggregate those sources of demand over a large area then the overall variability goes down quite significantly. The system is quite capable of coping with fairly large changes in demand and typically the power system, certainly in the UK and any other power system, would carry sufficient online reserve to cope for the outage of a large power station which typically might be in the UK of the order of about 1,300 megawatts. In terms of variability of wind power you would never expect that you would lose 1,300 megawatts, say, of wind power in the period of seconds which you might do in terms of a large power station. The best way of trying to cope with variability of wind power is to spread the wind turbines over a fairly large geographical area. You tend to find that weather systems move across the UK. The wind will change slowly across the UK so the aggregated change in the power output of a number of wind farms is fairly gentle; the rate is quite slow. In terms of variability the impact on a system, particularly at the levels we are at the moment, is quite small and is no more different than the variability in the demand. If we move towards a system where we have, say, 20 per cent of electricity produced from renewables and let us say about three-quarters of that came from wind power, then we might reach a situation where we would have to have a little more generation on the system which was capable of providing fairly rapid backup for changes in the wind power output. The studies that have been done and certainly the work I have done, at the 20 per cent level the extra cost of electricity is something in the order of 0.2 pence per kilowatt hour which is fairly modest I would say. You were asking me about how to mitigate the effects of variability. One way, as I said is to try to spread out your wind farms over a fairly large area to try to mitigate the changes in the wind that you get. Another way is to make sure your system is well-interconnected so, for example, the UK is connected to France. If those interconnections were increased that would allow greater movement of power between the UK and the European systems so that if you had an excess of wind power generation you could export; if you had a shortfall then you could import power from other countries. So, spreading out the wind farms and greater interconnection of power systems are ways of managing the variability.

  Q21  Chairman: If there is an anticyclone hovering over the UK and there is no wind, what happens then?

  Dr Watson: You could argue that might happen, in fact studies are being done to look at how frequently peak demand correlates with an anticyclone and no wind. In actual fact, that is a relatively rare event. Again, to put it into perspective, a power plant may go off instantaneously and you might lose 1,300 megawatts if it is a large power plant, for one of the interconnectors to France that is 1,000 megawatts and those interconnections do go down at least once or twice per month so you will lose large amounts of generation anyway, even for conventional power generation. The event you are talking about is a relatively rare event.

  Q22  Lord MacGregor of Pulham Market: Insofar as we have any experience, does the variability differ between offshore and onshore?

  Dr Watson: Obviously at the present time our understanding of that is more theoretical because the amount of offshore capacity is small at present, however you would expect that the variability would be less offshore than onshore for a number of reasons. The offshore environment is much more open—you do not have buildings around—so that reduces the amount of variability due to turbulence that you might get with buildings around. Secondly, the surface is much smoother so the winds you get are not affected by grass or trees or objects that again can create variability. In general there is less variability offshore. If we are moving to a large number of wind turbines built offshore compared with onshore I think we would expect less variability in the long run.

  Q23  Lord Lawson: You have limited your figure to 20 per cent whereas in fact in the Government's Climate Change Bill there is some question in the air as to whether this is going to be 60 per cent decarbonisation or 80 per cent decarbonisation, it is likely that the Committee will recommend 80 per cent, but even if it were 60 per cent 20 per cent is not going to make a great contribution to that, so we are talking about something more at which point the backup that Lord Vallance was talking about becomes even more important. My supplementary is this, given that you are going to have to have this backup, is it not the case—if it is not then tell me—that in fact using nuclear as the backup would be hopelessly uneconomic so in fact you would be bound to be using conventional power stations as backup?

  Dr Watson: It is true to say that nuclear is a fairly inflexible form of generation so you would not tend to use nuclear as a form of backup, you would tend to use plant which is more flexible which includes coal fired power stations, it includes open cycle gas turbine power stations and pumped storage so you would not tend to use nuclear as the form of backup in such cases.

  Q24  Lord Lawson: If your concern is to minimise the carbon dioxide emissions in the generation of electricity then nuclear is more effective in doing that than wind power, given that wind power needs the coal fired power stations or whatever as backup.

  Dr Watson: You could turn that on its head and say that wind is a more variable form of power than nuclear, but nuclear is quite inflexible. Nuclear is typically run at base load so you are going to have some form of balancing generation to manage that.

  Q25  Lord Lawson: We will have to find that out in our inquiries because there are plenty of people who say that the new generation of nuclear power stations is much more flexible. I do not know where the truth lies. They claim the new generation has much greater flexibility

  Dr Watson: I cannot comment on the new generation.

  Q26  Lord Best: At the level of the individual home, particularly in urban areas rather than out in the countryside, would I be right in thinking that the amount that can be contributed to electricity supply from home grown, on the home turbines, is absolutely infinitesimally small and hardly worth us giving any consideration to at all?

  Dr Watson: I think in general I would agree with that. I have done studies myself looking at the expected output of a small micro turbine of the order of one kilowatt and you get a capacity factor of about one or two per cent compared with 30 per cent for a large wind turbine. For most people in an urban area it would not be an economic proposition.

  Professor Bahaj: I think the issue in urban areas is the shadow effect of buildings. Wind turbines really work as a function of the speed of the wind; the power is related to the cube of the wind speed so any reduction in the wind speed reduces the power output. I think in buildings because of the winds between buildings and so forth it is very difficult to actually have micro generation wind giving you the optimum efficiency of conversion.

  Q27  Lord Best: At the macro level, leaving aside the economics, what is the technical potential for the proportion of Britain's electricity that could be generated by wind power compared with other countries? Am I right in thinking that we are quite a windy country?

  Dr Watson: Certainly if you compare us with the rest of Europe we have the best wind resource potentially available. In terms of the amount of electricity that we could realistically generate from a technical view point (perhaps not from an economic view point), you could envisage a situation where you could produce maybe 70 per cent of electricity from wind but that would obviously require a large number of wind turbines.

  Q28  Lord Best: You say we are windier than the rest of Europe, is this by a large factor? Is this a significant difference?

  Dr Watson: The trouble is of course you get very large variations from one location to another. The average wind speed across the UK is probably something of the order of 5.7 metres a second, something like that. That hides very large variations; there are upland areas where the wind speeds are higher than that and clearly the offshore areas where the wind speeds are higher. The average is a difficult measure to use, but if you look at it in terms of capacity onshore and offshore it is significantly higher than most of the European countries in terms of our overall potential if we were to exploit it fully.

  Q29  Lord Griffiths of Fforestfach: Instead of having these large areas of wind farms and so on, is there any advance in technology to make them micro?

  Dr Watson: Do you mean in terms of visibility?

  Q30  Lord Griffiths of Fforestfach: Yes.

  Dr Watson: No. The problem is that if you go to the smaller scale, because of the way the physics works, the aerodynamics work, they inherently become less efficient. One of the measures that is used in terms of the efficiency of a wind turbine rotor is something called the CP co-efficient and the maximum that can be, if you look at the amount of energy in the wind and the amount of energy that a wind turbine can extract, is something in the order of about 59 per cent and some of the larger wind turbines are approaching that efficiency. If you go to a smaller wind turbine, say the sort of turbine you would put on your house, the efficiency drops down to maybe 25 to 30 per cent. So from an efficiency point of view it is not a sensible thing to make the turbines smaller.

  Professor Bahaj: There is the issue of civil infrastructure. If you have smaller turbines the cost will be greater because you have to have foundations, you have to have other plants and so forth, so that is another issue which relates to costs.

  Q31  Lord Kingsdown: Could you clarify what is meant by biomass and bio-energy? What proportion comes from agricultural by-products and waste, and what proportion comes from crops and forests grown specifically to generate energy? Are these proportions likely to change in the future? How is the use of biomass split between electricity generation, heating and transport? Is this likely to change?

  Professor Bridgwater: That is a very big question. Biomass of course are plants that grow ranging from trees and forests to the food we all eat. That is biomass; it is material that grows and in growing it fixes carbon from the carbon dioxide in the atmosphere and grows itself. It is the only renewable source of carbon. Carbon is a source of hydrocarbon in fuels as well as for food. The amount of biomass that is grown for energy only in the UK is quite small, tens of thousands of hectares only, mostly for wood for use in co-firing applications, particularly up in Yorkshire. There is a lot of agricultural residues like straw; the UK produces one of the largest amount of straw in Europe and the straw is used to fire three power stations, for example, in East Anglia. Straw has a use for animal bedding, it has a use for energy and there are many other sources of agricultural waste or residue that can be used for energy. So we have waste residue by-products for energy and we could also grow crops. The two favourite ones in the UK are willow (which is known as a coppice crop, so you grow it in three to five years, chop it down and it grows again) and a grass called miscanthus which is a very thick grass and grows about two to three metres high. The UK is land-limited so the amount of land we have is finite. There is a view that the maximum amount of biomass that can be grown is 100 million tons per year. We can grow woody crops which are interesting because they are relatively clean, low in contaminates, burn cleanly and can be processed cleanly. The other main crop considered being suitable for energy is something called miscanthus, a grassy crop which is quite well adapted to UK conditions, but you can get yields of nearly double that you can get from willow. Bearing in mind that the land is limited in how much there is, the more crops you can grow per unit area of land, the more interesting the crops are. That is one of the downsides of first generation biofuels like rape for rape methyl ester or bio-diesel. You only get about one ton per hectare per year whereas willow is typically around ten and miscanthus can be up to 20. In a land-limited environment like the UK it is very important to use the land as productively as possible. That has answered one of your questions I hope. The second one was what forms bio-energy. You can produce electricity usually by either burning the biomass and a very effective way of doing this is co-firing in coal fired power stations because you can use all the capital investment and all the gas cleaning by adding some biomass and you can contribute significantly at the lowest possible cost to meeting UK's carbon reduction targets. Another way is a dedicated biomass fired power station. There is one at Lockerbie, 45 megawatt; there is one in Staffordshire, two megawatt. The Lockerbie one uses forest residues and the Staffordshire one uses purpose grown miscanthus. So you have co-firing for combustion and you have also got dedicated biomass combustion in dedicated power stations using only biomass. You then have the more advanced technologies for processing which offer the potential or the promise of greater efficiency using gasification or pyrolysis. These will deliver systems that have a greater potential for increasing the efficiency of power production over and above what you can get by combustion either at power stations or dedicated plant. Bio-energy can be used for power; it can be used for heat; there is a growing market in wood chip and wood pellets supplied to small companies, industrial estates and so on so there is a combustion opportunity for processed wood (chips, pellets and so on). Then you have the transport fuel sector which is currently of enormous interest. It is currently being satisfied by what Paul Ekins has been describing as first generation biofuels. The problem with first generation biofuels is that they are competing with food. Sugar, for example, to make alcohol or ethanol—as is produced in Brazil—is competing with sugar for food. In the USA it is made from corn or maize: the corn can be used as a food stuff or it can be used to make alcohol. In the UK there is both a sugar process for making alcohol and a wheat based process; wheat of course is a food stuff as well. The concern with first generation food stuffs is that there is competition with food and secondly the rates of yield or the productivity of these crops on land is quite low. Rape for bio-diesel is probably one ton per hectare and sugar and corn for bio-retinol in the UK and northern Europe is probably two tons per hectare. If we go to the second generation crops like ethanol from wood or hydro-carbon transport fuels by using processes like growing bio-ethanol we can get yields of up to five tons per hectare. The status of the technology and how advanced it is is very important in the UK because we are land limited, we therefore need to use land as effectively as possible to make as much of our energy needs as possible. The question of the competition between transport fuels and heat and power is also interesting because you make heat and power from nuclear, from wind, from photovoltaics, from wind, from waves and from tidal. Biomass is the only source of renewable carbon, carbon for hydro-carbons in gas and in diesel and carbon for the range of chemicals we use daily. I think it is important to recognise the unique attributes of biomass and what it can be used for.

  Q32  Lord MacGregor of Pulham Market: How much miscanthus are we growing in this country? Looking at the economics, are there any benefits currently in growing miscanthus from the growers' point of view?

  Professor Bridgwater: You get much higher yields than any other crop, up to 20 tons per hectare. The total amount of the cultivation is of the order of thousands of hectares; it is relatively limited. There are about a thousand in Staffordshire to supply the Eccleshall power plant and there are some big plantations in southwest England, but it is relatively small. One of the problems is that the support for growing miscanthus was withdrawn last summer and this has caused a lot of concern. The investment grants for planting it were significant and made it a viable crop, but without that there has been, as I understand it, no more new planting.

  Q33  Lord Griffiths of Fforestfach: I should declare an interest which I did not last time, and that is my association with Goldman Sachs which has a principal interest in this area as well as its role an advisory and training business. I have two questions. The first is, what are the pros and cons of burning biomass together with coal? Secondly, do biomass plants have to be relatively small because of the costs of moving them over distance?

  Professor Bridgwater: The advantage of co-firing is that you have a complete infrastructure for handling solids, for processing solids; you have all the economies of scale that go with that and you have all the gas treatment, all the gas processing and emissions control. Adding up to five per cent biomass is not going to significantly change the performance or operational costs of the power plant but there is a contribution of five per cent (five per cent firing on an energy basis). It is really an economic argument. I believe that virtually all coal fired power stations in the UK are now licensed to buy biomass and the costs and modification to handle the biomass is quite small, roughly £1 million I understand to a power plant that cost hundreds of millions to build in the first place. So there are considerable cost benefits and advantages to coal firing. The problem with small scale, dedicated biomass, the reason they are limited in size is firstly the availability of biomass, the concentration within an area that you can collect it over. You have to transport the biomass from the forest or the field to a central place usually by road for the Lockerbie power station, for example, but once you get up to hundreds of megawatts you have to go much further afield, you have to consider either rail, sea or river transport to bring the biomass together and the handling and transport costs get significantly more. The studies that we have done indicate that transport cost is not a major factor in the total cost but there are environmental costs of having lots of trucks going past your house, through villages to deliver to the site. There is also the cost of new roads that can handle all the trucks and maybe new rail heads. So there is an environmental cost of directly and indirectly building large scale plants. I think my view is that the future is in a diversity of options and in de-centralising opportunities.

  Q34  Lord Paul: For transport, which forms of bio-energy have the best prospects? Which crops can be grown in the UK, and which need to be imported?

  Professor Bridgwater: The problem is not, I think, which are the best crops, it is the total quantity available. If we are going to go up to 20 per cent substitution by 2020 there is problem of whether we grow enough in the UK and, if we cannot grow enough, even by importing all our food the view is that we can get maybe 20 to 30 per cent. We need to produce some food ourselves so we are going to have to import biomass. We then become dependent of course on where we source it from and the source of that biomass is going to want to add as much value as possible and probably want to process it locally into as high a value a product as possible to export. Brazil, for example, would rather export ethanol than wood chips. It does export wood chips and it does export ethanol but from a national point of view they would much rather export the highest value product because of the earnings they will get for the employment prospects and for the investment. In the UK the two crops that are considered most widely as energy crops are willow as wood and miscanthus as a grass. Miscanthus is what is called a C4 crop and it is more tolerant to drought, less demanding on water and also on nutrients, so it is an easier crop to grow and you get very high yields. The other interest is in algae. There are two types of algae, one is micro algae and there are some quite optimistic claims of getting yields of up to 90 or 100 dry tons per hectare from micro algae, but the cost of this is that it has an intensive reaction process, very high capital costs and high running costs of providing access to sunlight and all the nutrients and the liquid handling. Micro-algae comes round every 15 or 20 years; it has a lot of interest at the moment both because of the yield and because of the oil products you can derive from it. The other algae that is interesting, which means we are less land-limited than we are now—is to go offshore and look at seaweed, which is called macro-algae. There is a study at the moment included in the SUPERGEN bio-energy activity looking at the opportunity and the potential and methods for the handling and harvesting of seaweed. I think the interesting new crops to be investigated with most interest currently are and willow and miscanthus.

  Q35  Lord Macdonald of Tradeston: What is the technical potential for the amount of Britain's energy that could come from biomass and what impact might that have in terms carbon emissions? Also, just going back if I may to the withdrawal of support for miscanthus, it sounds very promising and I wondered if there were arguments against that encouraged the Government to withdraw the support and what they might be. What do you think the potential for rural employment might be in biomass?

  Professor Bridgwater: Clearly the farming community has not had an easy time over the last ten or 15 years and they are not very happy about growing crops they have to wait five years to harvest. Something like miscanthus which they can plant and harvest annually like a normal crop they are much more in favour of than short rotation wood where they only harvest every three or five years. It is a major investment, a major risk and unfortunately some of the experiences in the UK do not support the risks involved in farms growing woody crops. There is a need I think to provide some guarantees or some support to farmers who do grow woody crops that they are not going to have the contract cancelled or are left with hundreds of hectares of wood which nobody wants. It is a question, I think, of dealing with the farmers' concerns of how they deal with the uncertainty of growing bio-energy crops. I think it is important to know that as biomass and bio-energy become more established and become more widely traded then the risks will go down and farmers will be much happier to grow them, to handle them, to market them and the price also will drop as time goes by. At the moment it is getting better but there is still uncertainty over what happens if ...? What happens if the plant down the road that wants to buy it goes bankrupt—as happened in one case—and so on? It is a fairly rapidly changing situation and as the bio-energy industry grows I think we will see a greater interest in growing the crops, greater interest in establishing standards for marketing them, using them and trading them both within the UK and abroad as well. I cannot remember the first point of your question.

  Q36  Lord Macdonald of Tradeston: I was asking for the technical potential for the amount of Britain's energy that would come from biomass and what the impact of biomass might be in terms of carbon emissions.

  Professor Bridgwater: The impact of the amount of biomass has been considered that you could produce in the UK, forgetting food, is about 100 million tons a year which I think equates to the order of between 60 to 80 per cent of the energy. I would need to confirm that, if I may, but it is of that order. We have the potential to produce a large proportion of our current energy but that would mean we would have to import all our food so you get back to the food versus fuel debate—how much food do you want to produce and how much energy do you want?—because you cannot produce everything you want. There has to be some give somewhere in the system. It is a case, I think, of optimising the combination of food and fuel. The 100 million tons is an estimate and it does consider the different types of land productivity, the non-availability of land due to cities, roads, mountains and so on. I can try to obtain that information and also work out what it equates to in power and transport fuel supplies.

  Q37  Lord Lawson: What about Lord Macdonald's miscanthus question?

  Professor Bridgwater: I am sorry; can you remind me of it?

  Q38  Lord Macdonald of Tradeston: What are the criticisms of it that encouraged the Government to withdraw its support?

  Professor Bridgwater: I think it was a European directive, not a national issue. I believe the Commission required that the incentives for supporting growing miscanthus and similar crops was in fact withdrawn. As I understand it, it is not something the Government wanted to do but they did not have a choice. Again if you would like to know more on that I can find out.

  Q39  Lord Layard: Could you briefly explain the different technologies and the pros of cons of the different types of marine energy? How predictable and how intermittent would the energy supply be from a large scale deployment of marine energy?

  Professor Bahaj: The two technologies that we will talk about in terms of marine energy are wave as well as tidal stream. Tidal stream is different from tidal barrage which is really just a fence using hydropower to generate electricity. I will talk about tidal stream and wave power. There are three competing technologies in wave power. There are others as well but the three competing ones are the oscillating water column in which a wave comes into a chamber, it compresses air and goes through a turbine. As the air goes through the turbine it generates electricity by turning the turbine. As the wave recedes it also turns the turbine in the same direction. That is an oscillating water column. The other one is like a sausage where you have articulated cylinders and between them you have a power take off system where it compresses air which drives turbines. The last one is what is called a power point absorber which oscillates in the sea and either compresses air or drives an electrical generator. These are the main three different competing technologies for wave power. In terms of tidal power, the majority of technologies are related to horizontal axis turbines, except one which is the vertical axis turbine. Many of the technologies are based on the horizontal axis turbine based on wind turbines. There is a lot to learn from that technology. That actually reviews the technology in two minutes. Wave power is driven by wind so it is intermittent. Tidal power is driven by the lunar cycle and therefore you can predict within half an hour the energy you get from any given site. In terms of large deployment the majority of developers, at the moment, are at the prototype stage. In wave energy the first developer is Pelamis Wave Power Limited in Edinburgh and the first array is going to be launched in Portugal in the next few weeks. Other devices that are in the sea are the one in Lynmouth which has been there for about two years, a horizontal axis turbine by IT Power and now Marine Current Turbines Limited. Lunar Energy also have a device which is the shrouded turbine. The shroud itself enhances the velocity that it goes into the turbine and you get an enhancement of energy production. Large deployment is still on hold because the majority of the developers are waiting for investment in order for them to deploy at the prototype stage. There are four technologies that are being supported by BERR (or the DTI before them) and that is the horizontal axis turbine, the shrouded turbine and another two technologies which are a variant of the two. Those technologies are still not in large scale in the sea. The resource is between two and seven gigawatt average annually. That is four to seventeen gigawatt installed capacity. This is roughly fifteen percent of UK requirement of electricity.

  Dr Watson: One of the other devices that has been proposed for wave energy is something called a tapered channel device, a tapchan. It forces the waves into a constricted channel and the waves then build up and overtop into some sort of storage chamber. There is a device called a wave dragon which makes use of that. The chamber builds up a head of water and that water can then fall through a turbine and generate power. In terms of a comment on the variability of some of these, it is true to say that tidal power is very predictable. It is quite variable in that it can go from full output to zero output in a matter of six hours.


 
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