Today's entry analyses whether the energy crunch is advancing or receding.
Back in April last year, I posted a blog entry about whether, by analysing applications under the Planning Act 2008, the likelihood of the 'lights going out' was getting further away or nearer. Rather than being a breakfast cereal, the 'energy crunch' is the point at which electricity generation capacity falls below demand.
I concluded that old generating stations were switching off more slowly than expected but that new generation was also coming on stream more slowly, so for that year things hadn't changed much, when they probably needed to change. How has the picture changed since then?
This is topical because on Tuesday, the chief executive of gas and electricity regulator Ofgem, Alistair Buchanan, gave a pessimistic speech that warned that things were getting worse. Like Mr Micawber, he predicted that electricity demand would outstrip supply in three to five years' time, result: misery. The slides that accompanied his speech can be found here. The slide that summarises the situation the best is number 60 (out of 72 - hasn't he been on a powerpoint course?), namely:
- the closure of old generating plant is accelerating;
- new generation is not increasing as fast as it needs to;
- to plug the gap, the UK will need more gas;
- domestic and imported shale gas isn't much of a runner; and
- imported LNG (liquefied natural gas) may be the answer - Australia looks promising - but there are supply bottlenecks.
What he didn't mention is that if we are to import a lot
more gas of one type or another we will need new gas power stations
to convert it into electricity.
But do the stats back up Alistair Buchanan's analysis?
Achieving targets
The real-time website of current sources of electricity generation (click 'Hide all' and 'Generation by fuel type: table' on the left) shows:
- coal - 41.1% now, 42.9% last April
- gas - 27.5% now, 26.6% last April
- nuclear - 18.9% now, 22.6% last April
- wind - 6% now, 3% last April
- pumped storage - 0.8% now and last April
- hydroelectric - 0.8% now, 0.6% last April
- 'other' - 1.7% now, wasn't there last April and
- imported from other countries 3.2% now, 3.5% last April
So coal and nuclear have gone down and gas and wind have gone up - a bit mixed in terms of low carbon generation.
Closure of old generating plant
As shown on Alistair Buchanan's slide 14, three power stations are due to close sooner than expected, at the end of next month: Didcot A, Grain and Fawley. A fourth is due to close by the end of June (Tilbury) but may be refitted to accept biomass. Those four generate 4.7 gigawatts of electricity between them. The closure picture is thus speeding up. Next year, the EU emissions criteria ratchet up a notch, which may mean more plants closing in the next decade.
Opening of new generating plant
I'm not so au fait with commissioning, but I do have data on the consenting of new plant. In the last year the Department for Energy and Climate Change (DECC) consented pre-Planning Act applications for 2312MW of new electricity generation. DECC still has eight pre-Act applications to deal with, totalling 1767MW.
Since the Planning Act 2008 regime came in for energy projects three years ago, just two have been consented and they are relatively small: the 65MW Rookery South energy from waste project and the 51MW Kentish Flats offshore wind farm extension (up from one project last April).
Seven more electricity generation applications are being considered:
- Hinkley Point nuclear (3260MW capacity)
- Brechfa Forest windfarm (56-84)
- Galloper windfarm (504)
- Triton Knoll windfarm (1200)
- Blyth biomass (100)
- Fieldes Lock fossil fuel (54)
- East Anglia ONE offshore windfarm (1200)
- Total: 6374-6402MW (up from six projects of 5150-5250 last April)
11 more have at least started their pre-application consultation (although the first three were also on the list a year ago):
- Southampton biomass (100MW capacity)
- Burbo Bank windfarm (169-234)
- Clocaenog Forest windfarm (64-96)
- North Killingholme power stn (430)
- Nant-y-Moch windfarm (140-176)
- Atlantic Array windfarm (1500)
- Walney windfarm (572-768)
- South Hook CHP (500)
- Dyfnant Forest windfarm (80-120)
- Palm Paper CCGT (162)
- Hornsea windarm project one (1200)
- Total: 4917-5286MW (up from seven projects of 1805-1938MW last April)
The pipeline of new projects is therefore increasing by about the same 4GW that the speeded up closure of old plants involves. It doesn't cancel out so beautifully, though, since this is not like-for-like replacement, being mainly old fossil fuel and new wind. Sufficient baseload (always on and reliable) and dispatchable (controllable) electricity must be provided so that the electricity network works, and wind energy is neither.
What's more, if the UK is to embark on a second 'dash for gas' as suggested by Alistair Buchanan (but resisted by commentators on his speech, e.g. WWF), there is very little in the way of new gas-fired power generation in the pipeline.
So although more projects are coming forwards, perhaps suggesting that promoters are more relaxed about Planning Act regime, we may yet be waking up to a serving of energy crunch in 2017.
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