The Gas Strategy: a threat and two scenarios

The last DECC questions before Christmas took place last week, and inevitably featured the unloved foster child of the Department, the Gas Strategy.  Hitherto, DECC have been advancing, in general, a ‘central scenario’ relating to the level of Gas penetration in future energy mixes.  This is their view of the consequences of ‘largely decarbonising’ the system by 2030, which suggests a carbon emissions level from electricity production of about 100gms per kwh, and a capacity level of gas on the system at that point including about 26GW of new plant, running at a fairly low level of capacity, providing mainly for peaking power demands.

Meanwhile, the Climate Change Committee have indicated that, if we are to meet the terms of the forth carbon budget, then emissions from electricity generation will have to be lower, at 50g. That means, according to DECC that there will need to be a lower amount of new gas installed on the system (about 19gw), running at a far lower load factor. So far, so clear (I hope).

But then the unwanted foster child arrives in the department, fresh from Treasury complete with bulging suitcase of new gas plants.  The baggage, to be precise, consists of 37gw of shiny gas plant, pumping out energy at a load factor about three times that of the lowest scenario. So how do you tell the other children why this new arrival is getting all the attention? Simple – you say they’re all the same really, which is what Ed Davey has done, talking of equivalent ‘sensitivity analyses’ both at DECC Questions, and more recently when I questioned him about the strategy at the DECC Select Committee.

But they’re not really Ed, are they? And I’m sure you know they aren’t because it’s all there in the small print of the Gas Strategy itself. The truth is that the two potential ‘scenarios’ set out for longer term consideration by DECC have been usurped by what can only be seen as an immediate threat.

Here’s how it will work (and if you don’t believe me have a look at the ‘box’ on p.22 of the strategy; and by the way, why is this in a ‘box’? Did someone else write it?)

In 2014 the EU will probably have not moved to a tighter 2020 emissions target, or a more stringent EU ETS target, because ETS is in something of a state of flux, a reason the Government has already cited for delaying a decision on the inclusion of aviation and shipping into ETS calculations.

In ‘early 2014’ the Government will then ‘review our progress’ and if (as will be almost inevitable at that point) ‘our domestic commitments place us on a different trajectory from the one agreed by our partners in the EU under the ETS’ it is intended that we will ’revise up our budget as appropriate to align it with the actual EC trajectory’.

In case you thought, still, that the 200gm scenario would still be just that at this point, the document is clear that ‘200gCO2 / kwh …is taken as a proxy for a scenario in which the 4th Carbon budget is revised upwards following the 2014 review’ (p.21)

So, in brief, if the beastly Europeans do not rapidly sort out the problems with EU ETS and move to a higher target across Europe, we will unilaterally in the UK throw our targets out of the pram.  And – by the way – chuck out the legally binding Forth Carbon Budget (oops sorry, revise it upwards) so that a rather randomly determined amount of unabated gas can be shoehorned into the system running at full tilt. Presumably, if said beastly Europeans DO move to a higher target, then the two original scenarios put forward by DECC resume their places for consideration. Otherwise they are Trumped.

So it’s time, clearly to write urgently to Herman Van Rompuy, asking him if he would be good enough to ensure that the EU puts up its targets by the end of 2013 to save the UK from breaking its own laws on climate change budgets, missing its own targets on 2020 decarbonisation, and certainly having to abandon hope of reaching targets set down in its own laws on Climate Change in 2008. Not a big ask really, it is Christmas after all.

4 thoughts on “The Gas Strategy: a threat and two scenarios

  1. This is unworkable, isn’t it? It simply doesn’t add up.

    “The baggage consists of 37gw of shiny gas plant, pumping out energy at a load factor about three times that of the lowest scenario.”

    This nightmare scenario is a figment of the Treasury’s fevered mind, and is bound to self-destruct. It won’t happen, because no investors will be stupid enough to build so much gas plant. They’ll never get a return on it.

    If the government’s nuclear ambition is realised (unlikely but possible around 2025) even one third of that gas capacity would be too much at night, without a load of DSR, which is also unlikely to materialise.

    Before 2020, if wind power continues to be deployed offshore at the rate planned, there will be zero call on gas generation for all but a few hours a day, on many days throughout the year.

    “any generation built before 2016 would only operate in a ‘stable’ market price regime for a few years. Thereafter the revenues will be volatile and uncertain to the point where plant may only operate for a few hours one year, and then some hundreds the next.” – Pöyry Energy Consulting, ‘Impact of Intermittency’ Report July 2009.

    Who would invest in that?

    But, if the government had identified before-generator energy storage as THE no-brainer, and incentivised that (instead of fracking), then the new UK electricity generating industry would be the best place to invest. (making money out of thin air)

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