Price freeze will short-circuit UK energy supplies

LABOUR’S plans to freeze energy prices threatens the security of the UK’s energy supply and will hamper the Party’s efforts to de-carbonise the sector.

THE UK desperately needs new power generation capacity with EU emissions regulations meaning the on-going closure of the nation’s coal-fired plants and 20GW – or 20% - of capacity.

Ofgem and the National Grid worry about the UK’s declining capacity and warn that from the winters of 2014/15 onwards we may face power cuts.

The Energy Bill is set to unlock £100 billion of investment in new infrastructure spending. The Government is hoping the energy companies, most of which are producers as well as retailers, will invest in new gas-fired power stations in the short term.

But there’s no hope of any of this new large-scale capacity firing up before 2017. Gas would be the quickest to come on line – it takes about 3 years.

But the slow progress of the Energy Bill is already alarming investors, as is the prevarication of setting a decarbonisation target (see earlier blog).

However many commentators say we may just squeeze through we will just about be allright as long as there is enough to encourage the firing up of new gas capacity

But Labour’s plan to freeze price rises for 20 months has short-circuited the dynamic.

It will discourage investment in new capacity and force the power generators and the Labour Government to revert back to coal-fired power if we want to keep the lights – stymieing its green credentials.

In the 1970’s the unions forced the country into blackouts and a three day week. (I remember having corned beef and salad for tea in candlelight). Let’s hope Miliband, who got the leadership role on the strength of the support of the unions, does not allow us to go down that path once more.

Fracking, fossil fuels, nuclear needed to keep lights on

FRACKING for gas and nuclear power are the answer to the UK’s looming energy crisis, says one of the North East’s foremost energy experts. Peter McCusker reports.

WITH the National Grid and Ofgem warning of possible electricity shortages in the coming winters there is growing unease in North East business.

Ian Burdon is chairman of the region’s Energy Leadership Council (ELC) and says its members are increasingly concerned at the direction of UK energy policy and its effects on business and families.

He said: “If we continue to use energy in the way we will have to do something different to what we plan to do now. Life cannot continue the way we know it without energy.

“The renewable technologies, such as wind, require substantial subsidies and are not of a large enough scale at present.

“As things currently stand they will only peck at the edges of meeting the nation’s required demand. While the answer is not acceptable to everyone we have to focus on developing technologies that can meet anticipated future electricity demand.”

He highlighted how the Siemens factory in Heaton, Newcastle, (formerly Parsons) can build a 1600 MW steam turbine, which produces power equivalent to 200 of the largest possible offshore wind turbines.

“While the Government wants to see us become more energy efficient it is likely that we will continue to use more and more electricity.

“To meet this required demand I don’t see any realistic alternative to fossil fuels and nuclear power,” said Burdon.

The ELC members include senior regional energy figures such as George Rafferty from Durham-based NOF Energy and Stan Higgins from the North East Processing Industry Cluster which represents over 500 North East businesses in the pharmaceutical, biotechnology, and chemical sectors.

Members also include representatives from the CBI, NECC, manufacturing body  EEF, renewable centre Narec in Blyth and the region’s councils and universities.

The ELC advises the two North East Local Enterprise Partnerships on energy issues and provided technical advice to the Adonis North East Economic Review. It recently sent a delegation to BIS for a meeting with business secretary Vince Cable.

In a strongly-worded letter to The Journal Burdon highlights the concerns of many ELC members.

He says: “The suggestion that we should move, holus bolus, to other forms of power sources such as wind and marine technologies is simply not acceptable to any sane, rational and unprejudiced observer.

“It is an incontrovertible fact that wind power is an intermittent source of energy and, unless and until we devise cost-effective means of large-scale electricity storage, it cannot replace more conventional base-load power generation.”

Burdon is also chairman of the advisory board to the Durham Energy Institute (DEI), at Durham University.  The DEI is headed by Prof Richard Davies, a leading worldwide authority on fracking for shale gas.

In two recent papers Davies and his team have highlighted how concerns over the process of fracking – which involves fracturing shale rocks with water and chemicals to release trapped natural (methane) gas – have been overplayed.

Early last year it reported that it was "incredibly unlikely" that fracking at depths of 2km and below leads to the contamination of water channels.

This year its research of hundreds of thousands of fracking operations found that the process only caused earth tremors that could be felt on the surface in three cases.

It said the size and number of felt earthquakes caused by fracking is low compared to other manmade triggers such as mining, geothermal activity or reservoir water storage.

And that the energy released in a fracking event is “roughly equivalent to, or even less than, someone jumping off a ladder onto the floor”.

Burdon continues: “On balance fracking for gas is fairly safe and environmentally acceptable. It’s the sensible way forward and is a vital asset that we need to use.

“We should not let the protest such as those recently at Balcombe drown out the message that fracking is safe.

“The comments of many protestors are silly and vacuous and rely more on prejudice than hard evidence.”

Burdon is a supporter of renewables, where cost effective, and believes nuclear power is the long-term answer to the nation’s energy dilemma.

Burdon also believes coal has a significant role to play in the UK’s energy mix for some years to come and is a strong supporter of the efforts of Newcastle-based Five-Quarter.

A meeting of the ELC in Newcastle tomorrow will hear an address from Harry Bradbury chairman of Five-Quarter on its efforts to develop a North East underground coal gasification industry.

Burdon added: “The North East has substantial reserves of coal under our feet and under the sea and this should continue to play a major role in the nation’s energy mix.”

He continued: “It is unlikely we will see any frack gas or nuclear power for the next few years so if we want to avoid power cuts then we have little option but to keep open the coal-fired plants earmarked for closure.”

For a number of years Burdon and members of the ELC have been warning of the UK’s looming energy crisis brought about by the switch from fossil fuels to renewables to generate the nation’s electricity.

Earlier this year outgoing Ofgem boss Alistair Buchanan warned of the problem and last month the National Grid warned spare capacity on the UK system would fall to just 4%, and that the risk of disconnections maybe as high as 50% in the winters of 2014/15 and 2015/16.

In July the National Grid unveiled proposals to help address the supply side problems which highlight the seriousness of the electricity supply problems the UK is currently facing.

These include measures to cut demand during the coming winters which involve paying customers not to use electricity between peak hours on winter evenings, between 4pm and 8pm

It also proposes maintaining the option of using electricity from some of the fossil fuel plants which have been earmarked for closure.

Almost 10GW - 10% of the UK’s total capacity - will close this year, with  Kingsnorth in Kent, Didcot A in Oxfordshire, Cockenzie in East Lothian and Tilbury in Essex closing to date.

That leaves around 20GW of coal-fired power from around 15 UK stations, but over half of these face closure by 2015, and possibly all by 2020.

Some experts are warning of potential blackouts in coming winters. Burdon said: “The Government is to politically wily to let such a thing happen as they know they will be out on their backsides

“Discussions are underway to keep some of the fossil fuel plants open. But it’s not easy to bring back generating capacity which has already been closed as any power station manager will tell you.

“It is not inconceivable that industry will face load shedding power disruptions.

“We may even see barge mounted power stations floating off the coast or on our rivers, or we may have to turn to the Polaris nuclear submarines to generate electricity.”

He added: “Life as we know it now depends on ample and secure supplies of electricity and we would do well to remember that fact and not let our emotions or prejudices influence our rational selection of how we obtain that life blood.”

ENDS