Britain could face a return within 18 months to 70s-style power rationing to prevent blackouts, screamed one tabloid front page on Friday, conjuring up a vision of coalminer militancy and the three-day week.
The irony of the latest scare is that the big employers in this scenario – the energy companies – have partly created the threat of electricity disruption by using too much coal too quickly and mothballing their gas-fired power stations.
There is certainly a problem. The energy regulator, Ofgem, undertakes an annual assessment of whether the country has enough generating capacity to produce the electricity needed.
When this was done last year it warned that the gap between supply and demand could be as low as 4% by 2015. Now it estimates that gap is down to 2%. And the risk of blackouts has trebled from the one every 12 years it estimated last October to just one in four now.
What could make that 2% shrink to zero? Either power companies taking even more of their power stations out of service or an increase in demand as the country’s economy picks up steam and moves out of low growth. The only other outside element that could help the equation is if British homes and businesses do a lot more to improve their energy efficiency and reduce their demand.
Prior to 1990s privatisation, the power sector, in the form of the state-owned Central Electricity Generating Board, kept a considerable amount of capacity on standby, although it could not help during the miners’ strike because it had no coal to burn.
Now private sector companies such as Centrica, which owns British Gas, and the other big six energy generators mothball or close any power plants that are not making good returns.
Currently many gas plants have been taken offline because gas is considered too expensive compared with coal, which is very cheap because of exports from places such as America where shale gas has led US power plants to shift in the opposite direction.
The complication for Britain is that new European environmental legislation means energy companies have to close their coal-fired power plants during 2015 or invest in expensive new anti-pollution technology. Because they have been burning so much coal so quickly the plants are going to have to close quicker than expected and few companies are in the mood to invest in new equipment in the middle of a credit crunch.
So how to fix this? The National Grid, the private company which runs the transmission lines and pipelines, is proposing rationing business customers – halting their electricity usage between 4pm and 8pm if necessary – in return for a payment. It is also looking at paying power companies to keep their generating plants on standby. All of this would end up being paid for by the consumer – you and I – at a time when energy bills are already high and almost definitely going to get higher.
mike on Sat, 29th Jun 2013 3:34 pm
This is news? we’ve known this for at least 10 years in the UK. They’ll build new gas power plants just in time for the gas fracking renaissance bubble to burst too. Anyone who isn’t already learning to live a simpler life has a shit storm coming for them, it took me 5 years to optimise, adapt and develop new living arrangements during a time of plenty, lets see what the masses do during high inflation and blackouts. It’ll be like the 70s but without a ray of light at the end of the tunnel. All in all, pretty darned fun! 🙂
MrEnergyCzar on Sat, 29th Jun 2013 8:29 pm
@Mike, I just finished my 6th year of planning…
MrEnergyCzar
bobinget on Sat, 29th Jun 2013 8:58 pm
I believe England used up most of its coal in any case.
It has been said there are three areas that show ‘potential’ for tight oil in the UK. So far.. nada.
As for the world-wide future of shale, it may be better or worse depending on your view points, then we know.
GE is prepared to spend Two Billion Dollars researching fracking in a Utah facility. I figure they may know something. This technology is highly transferable with licensing agreements.
Who are we (US) to talk with Not a Single Off-Shore wind machine operative on either coast. As an energy investor I see grand opportunities for off and on shore wind on the British Isles. Indeed, off shore wind already accounts for 7.5 terawatt hours.
The UK aims to get 30% of energy from clean sources by 2020.
Japan, another island nation, has even more ambitious plans.Replacing all nuclear power by 2020.
Yet another Island nation, Denmark is world champ
with 30% of its power from wind energy rat now.
AS for shale deposits, of all places, Argentina seems to be the champ. It’s still early days for shale oil and gas.
Technical advances in removal and repurposing CO/2
could extend our privileged stay on this green planet
for who knows, another generation or two?
BillT on Sun, 30th Jun 2013 5:09 am
I don’t think they have to worry about their economies ‘picking up’. Europe is dying. EROEI doesn’t matter when the bottom line is a loss or break-even. THAT is one of the things I keep saying about energy. If it ain’t profitable, it won’t happen. The investors don;t care if you have electric or not. They have their own generators. Do you?