Time for some turbo-expander expansion?

Things are stirring in the gas capacity market. Just last week, Centrica announced that it is to sell three of its largest combined cycle gas power stations, totalling 2.7 GW of capacity. Instead it will concentrate on investing in ‘smaller, more flexible’ power stations. Cornwall Energy, in their ever perceptive ‘Energy Spectrum’, speculate that, among other things, the capacity market auctions may be beginning to look a little lop-sided; existing power producers are disadvantaged by accumulated losses on plant, whilst new entrants can be ‘neutral’ on losses. These new plants can gaining long term contracts to build new whilst older plants close down to cut their losses. Maybe, Energy Spectrum ponders, it is quite possible that Centrica is hoping to gain some value from existing plant rather than mothballing it as it faces up to the wacky world of the capacity auctions. (N.B. Cornwall Energy didn’t say that last bit – I did. And it is indeed going to be a very wacky world if existing plant is demolished to make way for new plant doing roughly the same thing, simply because the capacity market makes that an apparently rational short-term choice for participants. I set it out here a few weeks ago.)

At the same time, some new entrants may be beginning to emerge. One, Stag Energy, is looking to build just the sort of – I guess – ‘smaller more flexible’ power stations that Centrica might have in mind. They have a proposal in the pipeline to construct a 299MW open cycle plant in Suffolk (that’s about a quarter the size of one of the plants Centrica is putting up for sale).

The above isn’t exactly what I wanted to write about this week but it does set what I do want to scribe on into some relief. Because if the gas industry really wanted to develop some quick, small and flexible new capacity, it could do to pay some close attention to its own gas supply lines. This is what one of the gas distribution companies, Scotia Gas Networks has done, albeit in a small way. They have put four interesting bits of physics together and produced some power out of them, more or less for free.

  1. Gas transmission pipes compress gas from the receiving points to very high bar pressures (up to 50 times atmospheric pressure) to transport it around the grid
  2. In order to draw off this gas into the distribution system, it must be radically depressurised, down to the 2 bar that we get through domestic gas pipes
  3. This process wastes huge amounts of kinetic energy as the reducing valves do their job
  4. Using turbo expansion valves (invented around a hundred and fifty years ago) much of this wasted energy can be captured and put to work making electricity

And voila! Free electrical power ensues, with a relatively short payback period on the fairly high initial capital costs of the plant to do it.

Scotia Gas Networks has been running the only such plant in the UK for a year or so now, at St Mary Cray in South London. It has a capacity of about 7MW altogether, combining a turbine and a CHP plant. Not much, granted, but there are about sixty or so pressure reduction stations around the UK, each of which could have such a plant operating at the point of pressure reduction. In other words such a scheme would create a rather larger cyber power plant running on nothing at all than the proposed actual power plant from Stag Energy running on the gas that comes through the pipelines in the first place. So shouldn’t turbo-expanders surely be in the frame for some of the billion-pounds-a-year capacity payments?

Ah but turbo expanders are not renewable, so they can’t get Contracts for Difference. Neither do they qualify as demand reduction so they won’t get to go into the DSR capacity auctions. And they are certainly not the shiny, new gas fired plant run on new style ‘capacity-paid-for’ gas that the auctions themselves seem set to bring about. Turbo expanders are just very efficient, and they make good use of what is there already, so they wouldn’t get anything. Which is a shame because with a modest amount of capacity payments behind a turbo expander scheme, turbo-expansion valves could get a turbo charge. Maybe even through Centrica’s future investments.