Alan Whitehead’s speech to Parliament on the ‘Energy National Policy Statements’ not delivered on 18th July 2011
“Projections on the level of likely and desired installed capacity in the system are important and have a fundamental effect on planning – the level of energy security we can contemplate, the extent to which we will need to replace plant going out of commission, and the mix of energy provision that will result.
EN-I places some considerable store by these figures.
Early in the document it sets out the projections it considers should inform the planning debate on national energy priorities.
It concludes, for instance, that we are likely to require ‘at least’ 133gw of new capacity by 2025, compared with the current level of just over 80gw. The big difference is, of course the degree of penetration of renewable and the extent to which greater capacity is likely to be needed on the system in order to balance it bearing in mind the very different nature of supply at that point.
This conclusion leads to immediate consequences – namely, that we will need, it says, taking into account plant retiring through EU directives and or obsolescence, some 59gw of new installed capacity, 33gw of which will come from wind – 26gw will need to come from other forms of electricity generation. It notes that some 10gw of electricity (2gw renewable and 8gw non-renewable) is presently under construction, leaving 18gw of non-wind to be painted into the system and operational by 2025. That is what we will need, the document concludes to ensure the system is balanced and demand can be successfully met by supply.
How, though has this conclusion come about? Well, on even a cursory reading of EN-1 It will be seen that it is derived largely by guesswork. Evidence of likely demand is taken from a document entitled ‘updated energy and emission projections’ published by the department in June 2010. This looks at what energy demand is likely to be over the next fifteen years and then matches suggested capacity against various scenarios.
UEP, as the document agrees, projects four scenarios on price of oil and carbon,: in all of the scenarios, it is concluded that demand, overall will remain about static between now and 2025, because of a range of factors including the effect of energy efficiency on the demand economy, the extent of ‘hidden capacity because of distributed generation, and overall demand trends for economic activity.
It then does something curious. It apparently, and with no evidence of why this should be so set out, makes a distinction in installed capacity depending on the cost factors outlined in the various scenarios. The final scenario, an ultra high price both for carbon and oil, concludes that there is a difference in installed capacity required of about 9 GW over the lowest price scenario, even though demand is constant for all four.
I am not an expert in these things, but I cannot easily see how price difference makes such a difference in required installation, if demand is static. If anything, the trend looks as if it should be the other way.
Even so, that conclusion is not satisfactory for EN-1. Having stated that demand will be static, , EN-1 then projects that it will not – this is what it says: ‘It is quite possible that any of these scenarios may underestimate the increased use of electricity by 2025 as the UK moves to decarbonise. This means that the amount of new capacity needed will be even greater than projected in the high price scenario. This assertion is not supported by any evidence of reference, and it is not difficult to note, flies in the face of the logic of demand and capacity it claims it is noting in the UEP.
It then repeats this assertion two paragraphs later ‘if we assume as is prudent that total electricity demand is unlikely to remain at approximately current levels (and may have increased) in 2025, and that a larger amount of generating capacity will be required to serve even the same level of demand ….then the Uk would need at least 113GW of total electricity capacity.’
This is how by two apparent assertions and one non sequiteur, the figure of 113gw capacity in 2025 comes about, and upon which Pages of exegesis follow; and of course, the conclusion that we will need 10 new nuclear power plants in place by 2025. This latter assertion, incidentally, in interestingly nowhere assumed in the UEP projections: if you ferret out the working assumptions made for all the scenarios over the period even in the ‘high-high’ price scenario a maximum of 7.6gw of new nuclear is assumed – about four new nuclear power stations. In the lower price projections very little if any new nuclear is assumed to have been built. Interestingly, all scenarios assume static interconnection capacity.
The combination of assertion about the need for particular levels of installed capacity and assumptions beyond even the scenarios set out in the UEPs leads inexorably to an assumption about a high degree of replacement capacity being needed, and that if it is not to be gas, then it must be nuclear, even though the UEP scenarios themselves do not support it. The number ofnuclear power plants supposedly ‘needed’ is then extrapolated from this tiny inverted pyramid of evidence, and then pervades not just this document but other planning documents as well.
Well, you might say, that’s all very well but isn’t this just being prudent? Where’s the evidence that we won’t need this level of capacity? If we set aside for a moment the argument that by throwing out all attempts at projection and relying on ‘possibilities’ the capacity conclusion can become endless – why not 115gw, why not 120gw?
Then we might look at not only what previous projections set out:
The capacity projections for the original EP-1 in March 2009 were that we would require about 100gw of capacity in 2020 – and that, incidentally was on a higher projection of wind and renewable penetration in 2020 requiring, one might think a higher level of balancing back up.
National Grid, very recently published a document looking in detail at capacity requirements to balance the grid over the next ten years and including only very modest assumptions about demand side measures, distributed generation and interconnector improvements, concluded also that about 100gw of installed capacity in 2020 or so would be required: in other words these high projections seem to have come from nowhere in 2010, and even on the basis of analysis by those who should know – the national grid, seem to have little basis in analysis in 2011 – if you assume that the purpose of projections is to ensure we keep the lights on and balance the system, and that we do not have other policy priorities in mind.
I don’t think this is a very sound basis on which to set in place all the consequences of such an analysis, if you can grace it with such a word. It looks to me to be flawed, and unreliable, at least in terms of the assumptions that have been arbitrarily placed upon it by these documents. That was why I moved an amendment which was not called, stating that we should agree ‘providing a review of installed energy production capacity requirements is undertaken at an early date.’ It is vital for our energy future, and for the low carbon energy future to which we are signed up, that we get our projections about what we will need as right as we can. If we do not, or it becomes believed that that the projections are made up, rather than based on sound analysis, and then confidence in what is being done to get to that low carbon generating mix will be undermined.
I consider that, at the very least, further detailed analysis needs to be undertaken to substantiate, or to replace these clearly flawed projections. I hope the minister will commit to undertaking such an exercise, including the data sources and assumptions I have mentioned at an early date, and that he will as his powers permit submit amendments to the NPSs based upon it.”
A little piece of unwritten history right there for you readers.