Sinking below the Horizon

As far as new nuclear investment is concerned, well I did say… But that, in itself is not going to get us very far.  The real significance of the Eon/RWE announcement last week  that they were abandoning plans to develop reactors at Oldbury and Wylfa is that as a result we can see what the limit of ambition for new nuclear plant is likely to be.  EDF (with Centrica) are pressing ahead with their plans to develop plants at Hinkley Point and Sizewell , but are warning of  commissioning delays and  have anyway, in the shape of EDFs CEO Vincente De Rivas, indicated that the four reactors at the two sites are all there is going to be from them. They have sold interests in other sites as if to put a thick line under that statement. Possibly six gigawatts by the early 2020s. Nugen ( the GDF/Iberdrola consortium) have a site, and presently are suggesting that they may submit plans in 2015 for up to 3.6 gw of power operational perhaps by 2023 or so.  And er….that’s it.

The idea, suggested by Energy Minister Charles Hendry in his ‘whistling in the dark’ statement following the Horizon  withdrawal that the ‘Horizon sites offer new players an excellent chance to enter the market’ is pure whimsy. There are no new players.  A new venture would almost certainly have to be a consortium because of the cost involved (cited now as a severe problem by the Horizon consortium) and the big six are now all either in consortia, have resigned  (SSE) or have pulled the plug (Eon RWE). That leaves small players and Russian Oligarchs. My advice is… don’t watch this space.

So this all now poses a difficult dilemma for the Government. For quite a while it has been apparent that the initially stated ambition that there should be some 16gw of new installed nuclear capacity in place by 2025 is wildly overambitious.  At most now, it looks as if there will be perhaps six gw of installed  plant in the early 2020s and perhaps a little more later in the decade. Whether you are a supporter of a future energy mix with nuclear in it or not, it is becoming clear that , on present arrangements, there won’t be much in the mix at all, and that all the effort that has gone into preparing the ground in planning, decommissioning and an electricity reform plan that provides quite substantial implicit subsidies for nuclear may vastly overcomplicate the market and create a hiatus in renewable investment for little discernable outcome.

A nuclear contribution that small to our future energy needs in 2025 also  means that, if estimates of capacity needs in 2025 (such as those set out in the national Planning Documents) are to be believed then there really will be a ‘gap’ to be filled up to that point.  So does the Government :-

a) do nothing and hope for the best (with the clear implication of gaps for the future)

b) Go for even more gas as an alternative, as Ed Davey’s recent suggestion of ‘grandfathering’ new gas plant as far as emissions are concerned until 2045 seems to point to (with the implication that to do so would ,at a stroke bust apart any ambition to reach carbon emission targets for the future)

c) bite the bullet and announce that there will, after all be a subsidy for new nuclear and hope the buffalo return.

I  would not be surprised if , in the autumn, the ground is prepared for option c. But that in itself is fraught with problems, over and above what it means for the solemn vows exchanged in the Coalition pre-nuptial agreement. Some commentators are now talking  (e.g. Robert Peston BBC – here) as if simply taking a decision on subsidy is the big turning point – but it isn’t. Any new arrangement would be highly likely – like the Green Investment Bank – to run into ‘State Aid’ objections form the EU, at least delaying and possibly derailing any new programme. The whole point of the byzantine Electricity Market Reform programme is that it tries to build in extensive implicit operating subsidies both for old and new nuclear without incurring any action on ‘state aid’ from the EU, and even that looks not to have cut any ice with the Horizon consortium, which has baulked now at the upfront costs of what they were letting themselves in for. It looks like EMR as it stands may narrowly avoid ’state aid’ questions from the EU but an upfront explicit subsidy announcement certainly would not.

But an equally substantial point would need to be considered if (and when) explicit subsidy proposals emerge. The question that then arises, is quite simply what you get for how much.  If we really are going to subsidise nuclear power as part of ‘the mix’ forever, is that, in the end, better value than shorter term subsidies to develop renewable or abated forms of new power instead? At that point the debate is not a pro- or anti- argument: simply a best value dialogue, which I’m not sure on full and open comparison, new nuclear would win. And by the way, if you did have that debate, where would the Gormenghast castle of interlocking ‘pillars’ of EMR then stand? Not in very good stead, I think.

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6 thoughts on “Sinking below the Horizon

  1. Or we could take a leaf out of the German government’ s book and set about purposefully reducing electricity demand. Whereas Berlin is looking at reducing consumption levels by one quarter, we are still merrily planing on doubling consumption. Why?

  2. Even with huge increase in energy efficiency we still need to double electricity supply in order to cut carbon emissions. Have a look at the Centre for Alternative Technology zero carbon report. This is because we need to decarbonise transport and heating by switching them to electricity.

    If you just want to cut carbon emission from electricity 10 or 20 percent, then yes efficiency, wind and gas might do the job.

    If you want to serious cut to carbon emissions from all sectors, then you need an epic rollout of wind and nuclear. and i hope the govenment does everything it can to support this.

  3. Any ‘epic rollout of nuclear with wind’ is surely a non-starter? Nuclear generally gives a fixed output 24/7 (except when it goes off-line) and wind gives a variable output – the two are not natural bedfellows. The more nuclear the grid the less flexible it is.

    • you can adjust the output of nuclear, though its not as quick and easy as doing so with gas. with fossil fuels turning the power down saves money, as your main cost is fuel. with nuclear you have paid up front to build it and fuel cost is tiny, so you may as well leave it on if you can.

      can you explain how you adjust the output of a wind turbine? um, you can’t at all. well you can disconnect them (or put the breaks on), but thats just like nuclear. you have already paid to build them, so you want to be earning money from them all the time.

      so with no storage. 100% fossil fuel means we can have power when we want, at the cost of the planet. 100% nuclear, means we always have power, but can turn it down (build the capacity for peak demand). when we down need it. 100% wind means we have power that goes up and down out of our control or we build the capacity for peak demand times some large safety factor, so we can get enough power from low wind.

      50% wind, 50% nuclear, looks a lot better to me than 100% wind. i am going to rule out having a fossil fuel bit because we need to save the planet.

  4. I guess that the electricity industry also has a “make do and mend” option, which is to extend the lifetime of the AGRs and wait for the election of the next Government, with the hope that it’s thinking will be rather more coherent. EDF recently applied in Scotland for for permission to extend the lives of Hunterston and Torness by five years [1].

    Without a meaningful carbon tax, nuclear needs a financial subsidy to compete against unabated fossil fuel plant. Fossil fuels are already subsidized by the degradation of the climate. The next Labour Government should not be ashamed to intervene in the market to make coal and gas bear what are currently external costs. Let others argue the case for free market purity.

    Intermittent sources of energy, such as the wind, cannot deliver a secure, uninterrupted supply of energy unless backed up by fossil fuels (which emit CO2), or a pump storage system to “keep the lights on when the wind is not blowing”. The output of British wind turbines connected to the high voltage grid can be found here [2]. As can be seen, on Wednesday, Thursday and Friday last week there was little wind. If enough wind turbines were to be connected to the grid to make a serious difference to the UK’s CO2 emissions, a backup pump storage system would have to be of truly Brunelian proportions.

    “As nuclear as France” looks to be a more realistic solution to providing a very low carbon electricity supply for the UK than a a wind/pump storage solution. 40GW is often though of as average UK electricity demand. This could be provided by 27 1.65GW EPR reactors with 90% availability. Between 1956 and 1971 the UK opened 28 Magnox reactors (including 1 reactor each in Italy and Japan), so from an engineering point of view, this is doable. France built 56 reactors between 1974 and 1989. I hope that the next Labour Government starts a UK Messmer Plan.

    [1] http://www.world-nuclear-news.org/NP-Scotland_sets_tough_energy_targets-0602127.html

    [2] http://www.gridwatch.templar.co.uk/

  5. Pingback: Queen’s Speech: An On-Time Turkey? | alan's energy blog

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