SHUTTERSTOCK / SPONNER
OPINION GAS CAN KEEP THE LIGHTS ON
The UK has a clear long-term energy strategy, but that will be no consolation if our lights go out before we get there, says Blane Judd
Over the next four months, 8% of our total national energy capacity
is to be shut down as several coal and oil-fired power stations are taken offline. Then things start to get really interesting because, over the next three years, we will lose 25% of our power generation as ageing generators are switched off. During last month’s CIBSE Annual
Lecture, Ofgem chief executive Alistair Buchanan explained that the already gloomy predictions about our looming energy gap had been accelerated by two years, and the UK could have no spare energy capacity at all in three years’ time – at best we’ll have a 4% margin. The answer to the question posed by
his lecture title: ‘How secure is Great Britain’s electricity and gas supply over the next decade?’ was ‘not very’. The ‘next decade’ is definitely looking bleak. Renewables development is moving ‘profoundly slowly’ and is expensive; electricity costs around £50 per MW/h to produce but, if we switch to wind, the cost rises by up to £180, while our one major biomass development (Siemens/ Drax) is on hold. Another problem is a lack of storage.
During the winter of 2010/11, Centrica said it would run out of gas on 19 February. Luckily, we had the warmest January and February on record. This government has a clear vision of
where it wants to be in 2020 and 2030, but what do we do in the meantime? Renewables account for less than 10% of our needs and Buchanan has no real answers. Europe and the US are investing in micro-grid research, but its implementation is still some years away. Four major UK power stations are
closing next March. One new gas-fired power station is under construction, but will not be running until 2017 – at the earliest. The start of the carbon floor tax next April will finish off the remaining coal-fired energy plants because they will be uneconomic to run with a £16 tax on each tonne of carbon emissions. Last year, according to Ofgem, coal provided 45% of the UK’s electricity capacity.
18 CIBSE Journal December 2012 Meanwhile, Hinkley B, which will
During the winter of 2010/11, Centrica said it would run out of gas on 19 February
be the first of our new generation of nuclear power plants, is at least two years behind schedule. It is now expected to come on-stream in 2021. So, could we reverse our decision to
close down coal and gas? Apparently not. Mr Buchanan said there was ‘nothing happening’ with clean coal technology and the UK would be in a tricky legal position with the EU if it turned its back on reducing pollution. However, there is plenty of gas
around. Again, Ofgem has revised its predictions: gas was expected to fall back from providing around 40% of our power needs to between 20 and 30% by 2020. In fact, according to Mr Buchanan, it will need to be providing as much as 70% by the end of the decade. We will need to import a lot of gas,
but can we rely on renegade states like Russia? In February, it reduced supplies to the West by 10% for several days. There is huge competition for
gas from Europe and also the Far East, where prices are much higher. Shale gas is $2.50 (£1.57) per therm (mmBTU) in the US; $9 (£5.64) in Europe; and $18 (11.28) in Asia. The US is also determined to become energy independent, so it is retaining a lot of its supplies. Plus, shale gas is more
expensive to extract, and would increase European bills by between 20% and 50% – assuming extractors get over their current legislative hurdles. Australia’s Liquefied Natural Gas
(LNG) was the great hope before shale, but transportation costs have rocketed and the industry has been hit by delays. Also, the main distribution route is via the Straits of Hormuz – through the politically unstable Middle East. Japan and China are also lining up to take a huge slice out of ‘our’ LNG supplies. It is also definitely not helpful that our wholesale gas market may have been manipulated by unscrupulous traders. However, despite these problems, gas clearly represents our best hope of keeping the lights on in the short term. A future power market driven by gas
will be very expensive, but we have little alternative. Buildings are responsible for more than 40% of total energy demand. There surely can be no more persuasive argument for a comprehensive programme of energy efficiency than this bleak energy supply picture. Buchanan’s lecture can be viewed as a webcast at
www.cibse.org/annuallecture
l BLANE JUDD is chief executive of the Building & Engineering Services Association (B&ES). He will be delivering a paper on electricity efficiency at the CIBSETechnical Symposium in April.
www.cibsejournal.com
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