by MarkR » Sun 12 Sep 2004, 15:03:27
As already said, the problem is that NG is becoming a more important source of primary energy for electricity generation. It all comes down to short-term costs: to build a new NG power station costs about half what a new coal power station costs.
Fuel costs are, or perhaps more correctly have been, roughly equivalent between the two but NG again wins out due to considerably lower CO2 emissions which the UK plans to tax (if it doesn't already). In fact part of Tony Blair's strategy to comply with the Kyoto treaty is to replace coal with NG.
Some people blame this on deregulation of the electricity market - previously large companies had virtual monopolies and with high prices, there was plenty of money for investment. New competition induced by deregulation meant lower prices, but much lower incomes, and much thinner wallets - hence the need for the cheapest possible construction cost - even if fuel costs may be a bit higher.
Higher fuel costs have been a problem with NG electricity - demonstrated in the recent rise in energy prices in the UK, but rather more dramatically in the rolling power blackouts in CA in 2001. A sudden shortage of NG spent prices spiking to unbelievable levels (a rise of nearly 2000% in a few months), this coupled with price limits on electricity meant that generators had a choice - shut down or go bankrupt. Most chose the former, leading to months of power shortages.
I'm not sure how much energy is needed for grid maintenance. I would have thought that it was actually relatively low - and that the bulk of the cost was for staffing. Even in the event of a critical acute oil shortage, I would envisage that any government would ensure that utilities would have adequate supplies, whereas the plebs would have to do without. As an example I've looked through 'National Grid's' reports, and a quick calculation suggests that they used about 2000 bbl/d of oil for maintenance of the UK NG and elec grids, and for their US elec grid. On a national scale, that is almost an insignificant amount. Of course, this doesn't include the energy needs for suppliers, etc. but I think it demonstrates that things would have to get *extremely* bad before there was insufficient oil to maintain a power grid. The costs of maintenance are tiny, compared to the costs of generation and losses incurred in the grid itself - so even a massive price spike in the cost of oil would have only a small effect on elec distribution costs.
As for the US East coast power failure, I think that it is primarily dependent on poor maintenance (trees allowed to grow too close to power lines - so that in an emergency situation, the lines sag - due to heating due to the power surge - and touch trees that would normally be out of reach), and on poor operating procedures at the grid control centre (the grid monitoring computer had crashed and no one had noticed for several hours - when an engineer did notice, he went for lunch rather than immediately investigate). Again, I don't think I can attribute lack of maintenance to any problem with oil or energy supply, rather I think it was due to aggressive cost cutting in the post-deregulation economy.