Age of Energy: Will the lights go out?

Telegraph on Line

Gordon MacKerron, director of Science and Technology Policy Research at the University of Sussex, examines how we might fill the looming ‘energy gap’ that is currently haunting policymakers.

Energy policy decisions are complex and difficult. Objectives are wide-ranging — security, efficiency, affordability, environmental protection (including climate change) — and they are not always mutually consistent.
Among these objectives, security especially worries politicians. The last Prime Minister declared in 2008 that security was an “imperative”, a core state responsibility that the present Government endorses. Among security issues, the threat that the lights might (literally) go out especially haunts policymakers.

The starting point is a combination of unrelated circumstances due to bite in the middle of this decade. The first is that all our nuclear stations but one will need to close before 2020, a non-negotiable position because of safety concerns.
Second, a new and more stringent EU Large Combustion Plant Directive (LCPD) on emissions from generating plant comes into effect in 2015 and this will, if implemented fully, cause the closedown of 8,000 megawatts of otherwise serviceable coal-fired plant.

Some easing of the problem might be expected to come from reductions in electricity demand. After all, the Government is pursuing a Green New Deal designed to help cut domestic energy use. But even if this new deal is rapidly and widely implemented, this will not help much.

As argued by the authoritative Committee on Climate Change, there is a powerful policy need for a large growth in electricity use, for example in transport and in heating, even while total energy demand is expected to fall. This need for rapid growth in electricity use is a consequence of the UK’s ambitious commitments to climate change targets, which in turn can best be kick-started through major expansion in low-carbon electricity generation (renewable energy and nuclear power). Needs for growth in electricity capacity and to shut down large quantities of plant leaves a large apparent “gap” from 2015 onwards.

So how might we fill this gap? Renewable energy and nuclear power are being pursued vigorously. However, they cannot collectively fill the gap by 2015. Renewables are growing fast but from a very low base, and there will be no power from the first new nuclear station until 2018 at best. Hence the fear of the lights going out sounds serious.

In reality, the gap is unlikely to materialise. There is a large stock of gas-fired power projects waiting, ready to go at short notice, and each capable of being built in two years. And the fears around further gas import dependence are also exaggerated given the diversity of gas sources and the recent expansion of US supplies from shale.

There is also a willingness in the policy system to contemplate major reform to the wholesale electricity market, and this could be adapted to incentivise building of gas-fired capacity, should market signals prove insufficiently strong. And if all these mechanisms are not enough and a gap really did loom, then we can rely on the European Commission to allow postponement of the application of the LCPD. So the lights can and almost certainly will stay on, but there is a further twist and a real policy dilemma.

The likely need for a large quantity of new gas-fired plant from mid-decade, with a lifetime of 30 years, means that the rate at which our electricity system can be de-carbonised will be seriously reduced, playing havoc with climate change strategy. The pat answer to this problem is to say that new gas-fired capacity will have carbon capture and storage technology fitted at a later date. But there are two snags here.

First, carbon capture and storage is yet to be demonstrated at full scale. Second, business may be hesitant to bring forward its pipeline of gas-fired projects if it fears that their latter-day profitability might be jeopardised by a retrospective need to fit carbon capture technology.

So there is a potentially stark choice for the Coalition: guarantee security by allowing new, gas-fired power, or stick to climate change strategy and take more risks with security. When Gordon Brown said security was an “imperative” he labelled climate change strategy as a “challenge”.

Governments can afford to fail on challenges but they cannot fail to deliver on imperatives.
The big issue about security is therefore not whether or not the lights can be kept on; it is whether, in keeping the lights on, the UKfinds creative ways to maintain the climate change commitments that the Coalition seems serious about meeting.

Gordon MacKerron, director of SPRU (Science and Technology Policy Research) at the University of Sussex.

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