Most countries in the EU now use guaranteed price Feed-In Tariffs (FIT) to support renewable energy projects, with different prices being fixed for each type of technology.
The FITs have proved to be very effective at getting capacity installed rapidly at relatively low costs. For example, Germany has installed 25 Gigawatt (GW) of wind generation capacity so far under a FIT scheme , whereas the UK, with its competitive Renewable Obligation Certificate (ROC) trading scheme, has only achieved 4 GW, with some of that actually being supported by grants (for offshore projects). And this in a country with a far better wind regime than Germany.
With the UK committed to getting 15% of is total energy from renewables 2020, which means they would have to supply maybe 30% of its electricity, something had to be done. The UK governments remains wedded to the market-orientated ROC system, and it has made some changes to it – e.g. creating ‘technology bands’ with different numbers of ROCs for each type of technology. That may help to some extent – making it a bit more like a FIT. But the government eventually conceded that a fixed-price FIT system might be better for small-scale projects. There was some debate about how small ‘small’ should be, but a ceiling of 5MW was chosen- large enough to include some small community projects.
The governments proposals were for a fixed ‘Clean Energy Cashback’ payment from the electricity supplier for every kilowatt hour (kWh) generated (the “generation tariff”); i.e. for self-generated power you use, plus a guaranteed minimum payment additional to the generation tariff for every kWh exported to the wider electricity market (the “export tariff”). The export tariff will be market determined – it’s currently at £0.05/kWh, for electricity delivered to the grid. Proposed generation tariff levels were set at 36.5p/kWh for retrofitted PV solar systems up to 4kW; and 28p/kWh for systems up to 10kW, while wind projects would get 30p/kW for turbines below 1.5kW and progressively less for larger units, down to 4.5p/kWh for wind turbines between 500kW and 5MW. Hydro projects would get 4.5-17p/kWh depending on size. Anaerobic digestion and biomass were also eligible (getting up to 9p/kWh), so was AD fired combined heat and power (11p/kWh), but not landfill gas or sewage gas, which are deemed already commercially viable.
As with the German FIT, UK FIT prices will be reduced, or ‘degressed’, in annual stages to reflect expected reductions as the technology develops and the market for it builds. But only for some of the technologies. The annual degression was set at 7% for all solar PV projects, 4% for wind turbines below 1.5kW, 3% for those in the 15-50KW range. The rest would have no price degression.
Source - Environmental Research
Showing posts with label gas. Show all posts
Showing posts with label gas. Show all posts
Wednesday, 4 November 2009
Thursday, 18 June 2009
Africa's sun to power Europe's homes?
A group of 20 German companies wants to invest $555 billion in concentrated solar power plants in northern Africa to sell green power to Europe and make the continent less dependent on oil and gas imports.
It would be one of the world's biggest private renewable energy projects: Some 20 German companies are planning to join forces to build CSP plants in northern Africa and transport the electricity to Europe via new, direct current power grids.
The consortium, to be formed by mid-July, includes, among others, economic powerhouse Siemens, finance institution Deutsche Bank and energy giant RWE, the Sueddeutsche Zeitung newspaper reports. The ambitious green project, dubbed "Desertec," could produce power as early as 2019 and eventually satisfy 15 percent of Europe's electricity demand, Torsten Jeworrek, a Munich Re board member, told the newspaper.
The companies, backed by German government officials and the Club of Rome, plan to invest some $555 billion in the deserts of northern Africa. The money would not only be used for building the CSP plants, but also the gird infrastructure needed to bring the electricity to Europe.
"This is no longer a distant vision but technologically fascinating and also achievable," Jeworrek said in a statement Tuesday. "Desertec is clearly banking on the right incentives in the long term, namely climate protection and a low-carbon energy sector."
European energy experts have long advocated making the sunny African deserts Europe's power bank in order to reduce the continent's dependence on oil and gas imports from Russia and the Middle East. As its domestic fossil fuel resources are quickly depleting, Europe will have to transform its energy mix to avoid rising import dependence, experts say. In the case of solar power from Africa, however, investors have always been deterred by the high up-front investment required.
Munich Re is now banking on several international partners, also from the government side, to help finance the project.
"We are very optimistic when it comes to Italy and Spain, and we are also getting positive signals out of northern Africa," Jeworrek told the Sueddeutsche Zeitung. Only France, he added, might be hard to convince because of its reliance on nuclear energy.
A similar project in southern Spain was realized only when a feed-in tariff was implemented to pay for the electricity generated there. But Jeworrek said the plant would not need permanent support. He expects Desertec to be competitive "within 10 to 15 years."
Jeworrek added the consortium would choose the plants' locations according to political stability. The host countries would benefit from taxes, job creation and technology transfer, observers say.
Source - Solardaily
It would be one of the world's biggest private renewable energy projects: Some 20 German companies are planning to join forces to build CSP plants in northern Africa and transport the electricity to Europe via new, direct current power grids.
The consortium, to be formed by mid-July, includes, among others, economic powerhouse Siemens, finance institution Deutsche Bank and energy giant RWE, the Sueddeutsche Zeitung newspaper reports. The ambitious green project, dubbed "Desertec," could produce power as early as 2019 and eventually satisfy 15 percent of Europe's electricity demand, Torsten Jeworrek, a Munich Re board member, told the newspaper.
The companies, backed by German government officials and the Club of Rome, plan to invest some $555 billion in the deserts of northern Africa. The money would not only be used for building the CSP plants, but also the gird infrastructure needed to bring the electricity to Europe.
"This is no longer a distant vision but technologically fascinating and also achievable," Jeworrek said in a statement Tuesday. "Desertec is clearly banking on the right incentives in the long term, namely climate protection and a low-carbon energy sector."
European energy experts have long advocated making the sunny African deserts Europe's power bank in order to reduce the continent's dependence on oil and gas imports from Russia and the Middle East. As its domestic fossil fuel resources are quickly depleting, Europe will have to transform its energy mix to avoid rising import dependence, experts say. In the case of solar power from Africa, however, investors have always been deterred by the high up-front investment required.
Munich Re is now banking on several international partners, also from the government side, to help finance the project.
"We are very optimistic when it comes to Italy and Spain, and we are also getting positive signals out of northern Africa," Jeworrek told the Sueddeutsche Zeitung. Only France, he added, might be hard to convince because of its reliance on nuclear energy.
A similar project in southern Spain was realized only when a feed-in tariff was implemented to pay for the electricity generated there. But Jeworrek said the plant would not need permanent support. He expects Desertec to be competitive "within 10 to 15 years."
Jeworrek added the consortium would choose the plants' locations according to political stability. The host countries would benefit from taxes, job creation and technology transfer, observers say.
Source - Solardaily
Thursday, 4 June 2009
Green energy overtakes fossil fuel investment, says UN
Green energy overtook fossil fuels in attracting investment for power generation for the first time last year, according to figures released today by the United Nations.
Wind, solar and other clean technologies attracted $140bn (£85bn) compared with $110bn for gas and coal for electrical power generation, with more than a third of the green cash destined for Britain and the rest of Europe.
The biggest growth for renewable investment came from China, India and other developing countries, which are fast catching up on the West in switching out of fossil fuels to improve energy security and tackle climate change.
"There have been many milestones reached in recent years, but this report suggests renewable energy has now reached a tipping point where it is as important – if not more important – in the global energy mix than fossil fuels," said Achim Steiner, executive director of the UN's Environment Programme.
It was very encouraging that a variety of new renewable sectors were attracting capital, while different geographical areas such as Kenya and Angola were entering the field, he added.
The UN still believes $750bn needs to be spent worldwide between 2009 and 2011 and the current year has started ominously with a 53% slump in first quarter renewables investment to $13.3bn.
Counting energy efficiency and other measures, more than $155bn of new money was invested in clean energy companies and projects, even though capital raised on public stock markets fell 51% to $11.4bn and green firms saw share prices slump more than 60% over 2008, according to the report, Global Trends in Sustainable Energy, drawn up for the UN by the New Energy Finance (NEF) consultancy in London.
Wind, where the US is now global leader, attracted the highest new worldwide investment, $51.8bn, followed by solar at $33.5bn. The former represented annual growth of only 1%, while the latter was up by nearly 50% year-on-year.
Biofuels were the next most popular investment, winning $16.9bn, but down 9% on 2007, as the sector was hit by overcapacity issues in the US and political opposition, with ethanol being blamed for rising food prices.
Europe is still the main centre for investment in green power with $50bn being pumped into projects across the continent, an increase of 2% on last year, while the figure for America was $30bn, down 8%.
But while overall spending in the West dipped nearly 2%, there was a 27% rise to $36.6bn in developing countries led by China, which pumped in $15.6bn, mostly in wind and biomass plants.
China more than doubled its installed wind turbine capacity to 11GW of capacity, while Indian wind investment was up 17% to $2.6bn, as its overall clean tech spending rose to $4.1bn in 2008, 12% up on 2007 levels.
A number of Green New Deals – government reflationary packages designed to kickstart economies and boost action to counter climate change – have been laid out by ministers around the world.
The slump in global renewable investment during the first quarter of 2009 has alarmed the UN and New Energy Finance, the London-based consultancy that compiled the figures for the UN.
Michael Liebreich, chief executive of NEF, said the second quarter had revealed "green shoots" of recovery, which indicated this year could end up with investment at the upper end of a $95bn to $115bn range, but still a quarter down on 2008 at the least.
About $3bn of new money had been raised via initial public offerings or secondary issues on the stock markets in the second quarter, compared with none in the first three months of this year.
The New Energy Index of clean tech stocks, which had slumped from a 450 high to 134 by March, had since bounced back to 230, while more project financing had been raised in the last six weeks than in the 13 before that, he said.
But Steiner and Liebreich are still anxious that politicians do more to stimulate growth.
"There is a strong case for further measures, such as requiring state-supported banks to raise lending to the sector, providing capital gains tax exemptions on investments in clean technology, creating a framework for Green Bonds and so on, all targeted at getting investment flowing," said Liebreich.
It is important stimulus funds start flowing immediately, not in a year or so, he added: "Many of the policies to achieve growth over the medium-term are already in place, including feed-in tariff regimes, mandatory renewable energy targets and tax incentives. There is too much emphasis amongst some policy-makers on support mechanisms, and not enough on the urgent needs of investors right now."
Source - The guardian
Wind, solar and other clean technologies attracted $140bn (£85bn) compared with $110bn for gas and coal for electrical power generation, with more than a third of the green cash destined for Britain and the rest of Europe.
The biggest growth for renewable investment came from China, India and other developing countries, which are fast catching up on the West in switching out of fossil fuels to improve energy security and tackle climate change.
"There have been many milestones reached in recent years, but this report suggests renewable energy has now reached a tipping point where it is as important – if not more important – in the global energy mix than fossil fuels," said Achim Steiner, executive director of the UN's Environment Programme.
It was very encouraging that a variety of new renewable sectors were attracting capital, while different geographical areas such as Kenya and Angola were entering the field, he added.
The UN still believes $750bn needs to be spent worldwide between 2009 and 2011 and the current year has started ominously with a 53% slump in first quarter renewables investment to $13.3bn.
Counting energy efficiency and other measures, more than $155bn of new money was invested in clean energy companies and projects, even though capital raised on public stock markets fell 51% to $11.4bn and green firms saw share prices slump more than 60% over 2008, according to the report, Global Trends in Sustainable Energy, drawn up for the UN by the New Energy Finance (NEF) consultancy in London.
Wind, where the US is now global leader, attracted the highest new worldwide investment, $51.8bn, followed by solar at $33.5bn. The former represented annual growth of only 1%, while the latter was up by nearly 50% year-on-year.
Biofuels were the next most popular investment, winning $16.9bn, but down 9% on 2007, as the sector was hit by overcapacity issues in the US and political opposition, with ethanol being blamed for rising food prices.
Europe is still the main centre for investment in green power with $50bn being pumped into projects across the continent, an increase of 2% on last year, while the figure for America was $30bn, down 8%.
But while overall spending in the West dipped nearly 2%, there was a 27% rise to $36.6bn in developing countries led by China, which pumped in $15.6bn, mostly in wind and biomass plants.
China more than doubled its installed wind turbine capacity to 11GW of capacity, while Indian wind investment was up 17% to $2.6bn, as its overall clean tech spending rose to $4.1bn in 2008, 12% up on 2007 levels.
A number of Green New Deals – government reflationary packages designed to kickstart economies and boost action to counter climate change – have been laid out by ministers around the world.
The slump in global renewable investment during the first quarter of 2009 has alarmed the UN and New Energy Finance, the London-based consultancy that compiled the figures for the UN.
Michael Liebreich, chief executive of NEF, said the second quarter had revealed "green shoots" of recovery, which indicated this year could end up with investment at the upper end of a $95bn to $115bn range, but still a quarter down on 2008 at the least.
About $3bn of new money had been raised via initial public offerings or secondary issues on the stock markets in the second quarter, compared with none in the first three months of this year.
The New Energy Index of clean tech stocks, which had slumped from a 450 high to 134 by March, had since bounced back to 230, while more project financing had been raised in the last six weeks than in the 13 before that, he said.
But Steiner and Liebreich are still anxious that politicians do more to stimulate growth.
"There is a strong case for further measures, such as requiring state-supported banks to raise lending to the sector, providing capital gains tax exemptions on investments in clean technology, creating a framework for Green Bonds and so on, all targeted at getting investment flowing," said Liebreich.
It is important stimulus funds start flowing immediately, not in a year or so, he added: "Many of the policies to achieve growth over the medium-term are already in place, including feed-in tariff regimes, mandatory renewable energy targets and tax incentives. There is too much emphasis amongst some policy-makers on support mechanisms, and not enough on the urgent needs of investors right now."
Source - The guardian
Thursday, 21 May 2009
Looming energy gap according to energy industry leaders
The UK must avoid being lured into a new dash for gas as it seeks to bridge a looming power generation gap, according to energy industry leaders.
Ministers and the industry are committed to a range of power-generation options, from nuclear and cleaner coal through gas to renewables and energy saving, but striking the right balance may not be easy. New nuclear reactors are the best part of a decade away, even on optimistic assumptions. Coal is controversial and its future looks to be closely tied to the ability to develop carbon capture and storage. In terms of generation, that leaves gas and renewables to take the strain as a raft of ageing or environmentally unacceptable generating plant is taken out of service.
David Porter, chief executive of the Association of Electricity Producers, argues that in the long run Britain “could be well very well provided with a diverse range of technologies for power generation”. The problem is the near term: around a third of the UK’s generating capacity may need to be replaced by 2015. Some analysts believe the crunch could come earlier.
“At the moment companies are having to go ahead with what looks to be easiest,” Porter says. “Despite supply scares and price volatility, gas-fired generation is still easier to do than most.”
Recent developments back his view. The government has just given the green light to three gas-fired power plants, including a 2 gigawatt power station in Pembrokeshire.
Ian Marchant, chief executive of Scottish and Southern Energy, said this month that Britain will lose 14 to 18GW of capacity by 2015. He told the Commons business and enterprise committee that some 7GW of gas generating capacity was under construction and another 6GW had been given the go-ahead. That is balanced by some 46 renewable projects, providing about 5 megawatts of power generation.
Paul Golby, chief executive of E.ON UK, said last week that it was vital the UK maintained a variety of options: “Clearly gas has an important part to play, both in the near and the medium term. But we can’t become overly reliant on a single form of power generation if we’re to ensure security of supply, reduce our carbon emissions and ensure energy remains affordable for our customers.
“The only way we can do that is to, yes, build gas-fired power stations… But we also need to ramp up our renewable build, create a new generation of cleaner and, eventually, clean coal-fired power stations - and, longer term, replace the UK’s nuclear fleet. To become overly reliant on a single fuel - and one that will, in the next decade or so, become 80% imported - is simply too dangerous.”
Centrica chief executive Sam Laidlaw says this winter’s row between Russia and Ukraine has brought security of supply issues sharply back into focus and that the UK needs to develop diverse sources of gas as its dependence on imports increases. “Russia will play a role in the long term… but also more LNG [liquefied natural gas] coming from other sources has to be the answer so we aren’t dependent on one source. But, thinking about power generation, we can’t have another dash for gas.”
EDF has placed a multi-billion-pound bet on the development of a new generation of nuclear power in the UK through its acquisition of British Energy. Its UK subsidiary, EDF Energy, plans to build four new nuclear reactors and is aiming to have the first coming on stream at the end of 2017. In the meantime, the company is building a 1.3GW gas plant in Nottinghamshire. “Until nuclear can come on line, it is likely that much of the energy gap will be filled by new ‘combined-cycle’ gas turbines, as these are relatively cheap, quick to build and flexible, meaning they are able to respond to market prices,” the company says.
Gas and renewables, notably wind, can be complementary, rather than alternatives, with gas taking on the back-up role as more wind generation comes on stream. A key test, however, is whether companies will be able to secure returns on their investment in gas if the plant runs only to supplement wind power.
Money is an issue. Ian Parrett from energy analyst Inenco says: “Funding difficulties in the current economic climate are resulting in new generating capacity being delayed or even shelved. The UK’s lack of gas storage leaves the country running the risk of being held to ransom and forced to pay a premium for gas in a highly volatile market.”
Ministers and the industry are committed to a range of power-generation options, from nuclear and cleaner coal through gas to renewables and energy saving, but striking the right balance may not be easy. New nuclear reactors are the best part of a decade away, even on optimistic assumptions. Coal is controversial and its future looks to be closely tied to the ability to develop carbon capture and storage. In terms of generation, that leaves gas and renewables to take the strain as a raft of ageing or environmentally unacceptable generating plant is taken out of service.
David Porter, chief executive of the Association of Electricity Producers, argues that in the long run Britain “could be well very well provided with a diverse range of technologies for power generation”. The problem is the near term: around a third of the UK’s generating capacity may need to be replaced by 2015. Some analysts believe the crunch could come earlier.
“At the moment companies are having to go ahead with what looks to be easiest,” Porter says. “Despite supply scares and price volatility, gas-fired generation is still easier to do than most.”
Recent developments back his view. The government has just given the green light to three gas-fired power plants, including a 2 gigawatt power station in Pembrokeshire.
Ian Marchant, chief executive of Scottish and Southern Energy, said this month that Britain will lose 14 to 18GW of capacity by 2015. He told the Commons business and enterprise committee that some 7GW of gas generating capacity was under construction and another 6GW had been given the go-ahead. That is balanced by some 46 renewable projects, providing about 5 megawatts of power generation.
Paul Golby, chief executive of E.ON UK, said last week that it was vital the UK maintained a variety of options: “Clearly gas has an important part to play, both in the near and the medium term. But we can’t become overly reliant on a single form of power generation if we’re to ensure security of supply, reduce our carbon emissions and ensure energy remains affordable for our customers.
“The only way we can do that is to, yes, build gas-fired power stations… But we also need to ramp up our renewable build, create a new generation of cleaner and, eventually, clean coal-fired power stations - and, longer term, replace the UK’s nuclear fleet. To become overly reliant on a single fuel - and one that will, in the next decade or so, become 80% imported - is simply too dangerous.”
Centrica chief executive Sam Laidlaw says this winter’s row between Russia and Ukraine has brought security of supply issues sharply back into focus and that the UK needs to develop diverse sources of gas as its dependence on imports increases. “Russia will play a role in the long term… but also more LNG [liquefied natural gas] coming from other sources has to be the answer so we aren’t dependent on one source. But, thinking about power generation, we can’t have another dash for gas.”
EDF has placed a multi-billion-pound bet on the development of a new generation of nuclear power in the UK through its acquisition of British Energy. Its UK subsidiary, EDF Energy, plans to build four new nuclear reactors and is aiming to have the first coming on stream at the end of 2017. In the meantime, the company is building a 1.3GW gas plant in Nottinghamshire. “Until nuclear can come on line, it is likely that much of the energy gap will be filled by new ‘combined-cycle’ gas turbines, as these are relatively cheap, quick to build and flexible, meaning they are able to respond to market prices,” the company says.
Gas and renewables, notably wind, can be complementary, rather than alternatives, with gas taking on the back-up role as more wind generation comes on stream. A key test, however, is whether companies will be able to secure returns on their investment in gas if the plant runs only to supplement wind power.
Money is an issue. Ian Parrett from energy analyst Inenco says: “Funding difficulties in the current economic climate are resulting in new generating capacity being delayed or even shelved. The UK’s lack of gas storage leaves the country running the risk of being held to ransom and forced to pay a premium for gas in a highly volatile market.”
Tuesday, 3 March 2009
The UK’s looming ‘energy crunch’
FAMILIES, industry and hospitals could face regular blackouts in the West country in the next decade because the Government has not woken up to a potential “energy crunch”, one of the region’s leading engineers has warned.
Barry Griffiths, director of the Institution of Civil Engineers South West, reckons the three-day working week and life by candlelight, not seen since the miners’ strike of the 1970s, could return unless there is deep investment in power generation across the UK.
He argues that old power stations are not being replaced fast enough and renewable energy production targets are falling behind, leaving a so-called “energy gap”.
Given the number of years it takes to build major power projects, the Devon-based engineer argues that decisions on major nuclear, renewable and fossil fuel projects need to be made now.
The impending crisis is symbolised by the Oldbury and Hinkley nuclear power stations on the Bristol Channel, the biggest single energy generators in the South West, both of which are set to close in the next decade.
Click here!
Mr Griffiths was speaking to the Western Morning News at a conference organised by the professional body to discuss proposals for a controversial multi-billion pound tidal power scheme on the Severn estuary.
He said: “The energy crisis the UK is facing over the next decade is very real. We have not had enough short to medium-term planning to provide a blueprint for energy generation that will see us well into the 2020s.
“The Government will have to pay far more attention to what the country’s engineers are telling them and start investing in a comprehensive strategy to meet demand and improve energy efficiency.”
The argument was borne out in a report produced by consultants Fells Associates last year. It argued the looming energy crisis was one of the reasons the Government was anxious to drive forward the tidal project on the Severn.
Five shortlisted schemes and two development projects for the Severn, which has as much as 5 per cent of the UK’s power needs locked within its massive tidal range, are now out for public consultation.
A final shortlist is expected to be announced in June.
But the tidal scheme, which has been seriously questioned by the RSPB and Friends of the Earth over fears that hectares of internationally protected habitats might be destroyed, could take as long as 10 years to build.
The biggest project proposed is a 10-mile long concrete barrage built from the Welsh capital of Cardiff across to Weston-super-Mare, Somerset, on the English side of the estuary.
Mr Griffiths argues that developing a mix of power derived from renewables, nuclear and fossil fuels is the only realistic route forward, allied to a reduction in energy consumption.
“There is not one solution,” he said.
He is currently drawing up a report on an energy strategy for the region on behalf of the South West Regional Assembly, which is likely to make it clear the Devon and Cornwall peninsula would be particularly susceptible during an “energy crunch”.
As a indication of the massive upheaval needed in the region, under a renewables-only scenario, thousands of wind farms would have to built in the South West and vast tracts of the countryside would have to given over to biomass generation.
Mr Griffiths said: “About four years ago, there was a lot of misinformation and not a lot of number-crunching. The idea that renewables would power the UK was almost accepted. But there was not a lot of rigorous analysis of the real solution. We were kidding ourselves.”
The South West needed around 25 terrawatt hours (TWH) of electricity a year to meet demand from households, hospitals, street lights and industry. But around 10 TWH was produced outside the region and had to imported.
But by 2016, the South West would be much more dependent on energy imports with only 20 per cent of the total energy needed generated in the region, said Mr Griffiths.
As such, and with only the under-construction Langage gas-fired power plant in Plymouth operating in Devon and Cornwall, the two counties would be at greater risk of blackouts.
Ageing power stations, dwindling North Sea oil production and the vulnerability to imports of resources from Europe – as underlined by the recent flashpoint between Russia and the Ukraine that left much of Eastern Europe without a gas supply – are among other reasons to increase homegrown power, it is argued.
Gas and coal-fired power stations proposed across the country have been vehemently opposed by environmentalists who argue the threat of climate change is even greater.
Mr Griffiths said the “energy crunch” theory became apparent after drawing parallels with the current financial problems in the banking system.
“With the credit crunch, the Government has let things drift for the past 10 years. The same has happened with energy policy and to some extent transport. With transport, it leads to annoyance. But with energy, towards the end of 2015 to 2020, we are going to see old power stations closing down.
“The Government hasn’t planned far enough in advance to meet the energy needs in 2020.”
He added that harnessing the power of the Severn’s tides, first examined seriously in the 1900s, was “the most fantastic opportunity” for the region. Just half the power it could generate would equate to a third of the South West’s energy needs, he said.
But against the backdrop of deep environmental concern, he cautioned that the Institution of Civil Engineers was only “pro the right solution”.
Asked whether he thought we would see the lights going out, he said: “We could do. It’s touch and go if the Government does not do something dramatically very soon.
“We in the South West are at the end of the power line. We don’t know exactly what that might mean, but we could probably guess. It won’t be good.”
Analysts Capgemini last year warned that the country would not have new nuclear power plants until around 2018.
Dr Jon Gibbins of Imperial College also issued a similar warning of blackouts because of a failure to replace ageing power plants.
Source - The Western Morning News
Barry Griffiths, director of the Institution of Civil Engineers South West, reckons the three-day working week and life by candlelight, not seen since the miners’ strike of the 1970s, could return unless there is deep investment in power generation across the UK.
He argues that old power stations are not being replaced fast enough and renewable energy production targets are falling behind, leaving a so-called “energy gap”.
Given the number of years it takes to build major power projects, the Devon-based engineer argues that decisions on major nuclear, renewable and fossil fuel projects need to be made now.
The impending crisis is symbolised by the Oldbury and Hinkley nuclear power stations on the Bristol Channel, the biggest single energy generators in the South West, both of which are set to close in the next decade.
Click here!
Mr Griffiths was speaking to the Western Morning News at a conference organised by the professional body to discuss proposals for a controversial multi-billion pound tidal power scheme on the Severn estuary.
He said: “The energy crisis the UK is facing over the next decade is very real. We have not had enough short to medium-term planning to provide a blueprint for energy generation that will see us well into the 2020s.
“The Government will have to pay far more attention to what the country’s engineers are telling them and start investing in a comprehensive strategy to meet demand and improve energy efficiency.”
The argument was borne out in a report produced by consultants Fells Associates last year. It argued the looming energy crisis was one of the reasons the Government was anxious to drive forward the tidal project on the Severn.
Five shortlisted schemes and two development projects for the Severn, which has as much as 5 per cent of the UK’s power needs locked within its massive tidal range, are now out for public consultation.
A final shortlist is expected to be announced in June.
But the tidal scheme, which has been seriously questioned by the RSPB and Friends of the Earth over fears that hectares of internationally protected habitats might be destroyed, could take as long as 10 years to build.
The biggest project proposed is a 10-mile long concrete barrage built from the Welsh capital of Cardiff across to Weston-super-Mare, Somerset, on the English side of the estuary.
Mr Griffiths argues that developing a mix of power derived from renewables, nuclear and fossil fuels is the only realistic route forward, allied to a reduction in energy consumption.
“There is not one solution,” he said.
He is currently drawing up a report on an energy strategy for the region on behalf of the South West Regional Assembly, which is likely to make it clear the Devon and Cornwall peninsula would be particularly susceptible during an “energy crunch”.
As a indication of the massive upheaval needed in the region, under a renewables-only scenario, thousands of wind farms would have to built in the South West and vast tracts of the countryside would have to given over to biomass generation.
Mr Griffiths said: “About four years ago, there was a lot of misinformation and not a lot of number-crunching. The idea that renewables would power the UK was almost accepted. But there was not a lot of rigorous analysis of the real solution. We were kidding ourselves.”
The South West needed around 25 terrawatt hours (TWH) of electricity a year to meet demand from households, hospitals, street lights and industry. But around 10 TWH was produced outside the region and had to imported.
But by 2016, the South West would be much more dependent on energy imports with only 20 per cent of the total energy needed generated in the region, said Mr Griffiths.
As such, and with only the under-construction Langage gas-fired power plant in Plymouth operating in Devon and Cornwall, the two counties would be at greater risk of blackouts.
Ageing power stations, dwindling North Sea oil production and the vulnerability to imports of resources from Europe – as underlined by the recent flashpoint between Russia and the Ukraine that left much of Eastern Europe without a gas supply – are among other reasons to increase homegrown power, it is argued.
Gas and coal-fired power stations proposed across the country have been vehemently opposed by environmentalists who argue the threat of climate change is even greater.
Mr Griffiths said the “energy crunch” theory became apparent after drawing parallels with the current financial problems in the banking system.
“With the credit crunch, the Government has let things drift for the past 10 years. The same has happened with energy policy and to some extent transport. With transport, it leads to annoyance. But with energy, towards the end of 2015 to 2020, we are going to see old power stations closing down.
“The Government hasn’t planned far enough in advance to meet the energy needs in 2020.”
He added that harnessing the power of the Severn’s tides, first examined seriously in the 1900s, was “the most fantastic opportunity” for the region. Just half the power it could generate would equate to a third of the South West’s energy needs, he said.
But against the backdrop of deep environmental concern, he cautioned that the Institution of Civil Engineers was only “pro the right solution”.
Asked whether he thought we would see the lights going out, he said: “We could do. It’s touch and go if the Government does not do something dramatically very soon.
“We in the South West are at the end of the power line. We don’t know exactly what that might mean, but we could probably guess. It won’t be good.”
Analysts Capgemini last year warned that the country would not have new nuclear power plants until around 2018.
Dr Jon Gibbins of Imperial College also issued a similar warning of blackouts because of a failure to replace ageing power plants.
Source - The Western Morning News
Friday, 27 February 2009
Looming energy gap according to energy industry leaders
The UK must avoid being lured into a new dash for gas as it seeks to bridge a looming power generation gap, according to energy industry leaders.
Ministers and the industry are committed to a range of power-generation options, from nuclear and cleaner coal through gas to renewables and energy saving, but striking the right balance may not be easy. New nuclear reactors are the best part of a decade away, even on optimistic assumptions. Coal is controversial and its future looks to be closely tied to the ability to develop carbon capture and storage. In terms of generation, that leaves gas and renewables to take the strain as a raft of ageing or environmentally unacceptable generating plant is taken out of service.
David Porter, chief executive of the Association of Electricity Producers, argues that in the long run Britain “could be well very well provided with a diverse range of technologies for power generation”. The problem is the near term: around a third of the UK’s generating capacity may need to be replaced by 2015. Some analysts believe the crunch could come earlier.
“At the moment companies are having to go ahead with what looks to be easiest,” Porter says. “Despite supply scares and price volatility, gas-fired generation is still easier to do than most.”
Recent developments back his view. The government has just given the green light to three gas-fired power plants, including a 2 gigawatt power station in Pembrokeshire.
Ian Marchant, chief executive of Scottish and Southern Energy, said this month that Britain will lose 14 to 18GW of capacity by 2015. He told the Commons business and enterprise committee that some 7GW of gas generating capacity was under construction and another 6GW had been given the go-ahead. That is balanced by some 46 renewable projects, providing about 5 megawatts of power generation.
Paul Golby, chief executive of E.ON UK, said last week that it was vital the UK maintained a variety of options: “Clearly gas has an important part to play, both in the near and the medium term. But we can’t become overly reliant on a single form of power generation if we’re to ensure security of supply, reduce our carbon emissions and ensure energy remains affordable for our customers.
“The only way we can do that is to, yes, build gas-fired power stations… But we also need to ramp up our renewable build, create a new generation of cleaner and, eventually, clean coal-fired power stations - and, longer term, replace the UK’s nuclear fleet. To become overly reliant on a single fuel - and one that will, in the next decade or so, become 80% imported - is simply too dangerous.”
Centrica chief executive Sam Laidlaw says this winter’s row between Russia and Ukraine has brought security of supply issues sharply back into focus and that the UK needs to develop diverse sources of gas as its dependence on imports increases. “Russia will play a role in the long term… but also more LNG [liquefied natural gas] coming from other sources has to be the answer so we aren’t dependent on one source. But, thinking about power generation, we can’t have another dash for gas.”
EDF has placed a multi-billion-pound bet on the development of a new generation of nuclear power in the UK through its acquisition of British Energy. Its UK subsidiary, EDF Energy, plans to build four new nuclear reactors and is aiming to have the first coming on stream at the end of 2017. In the meantime, the company is building a 1.3GW gas plant in Nottinghamshire. “Until nuclear can come on line, it is likely that much of the energy gap will be filled by new ‘combined-cycle’ gas turbines, as these are relatively cheap, quick to build and flexible, meaning they are able to respond to market prices,” the company says.
Gas and renewables, notably wind, can be complementary, rather than alternatives, with gas taking on the back-up role as more wind generation comes on stream. A key test, however, is whether companies will be able to secure returns on their investment in gas if the plant runs only to supplement wind power.
Money is an issue. Ian Parrett from energy analyst Inenco says: “Funding difficulties in the current economic climate are resulting in new generating capacity being delayed or even shelved. The UK’s lack of gas storage leaves the country running the risk of being held to ransom and forced to pay a premium for gas in a highly volatile market.”
Source- The guardian
Ministers and the industry are committed to a range of power-generation options, from nuclear and cleaner coal through gas to renewables and energy saving, but striking the right balance may not be easy. New nuclear reactors are the best part of a decade away, even on optimistic assumptions. Coal is controversial and its future looks to be closely tied to the ability to develop carbon capture and storage. In terms of generation, that leaves gas and renewables to take the strain as a raft of ageing or environmentally unacceptable generating plant is taken out of service.
David Porter, chief executive of the Association of Electricity Producers, argues that in the long run Britain “could be well very well provided with a diverse range of technologies for power generation”. The problem is the near term: around a third of the UK’s generating capacity may need to be replaced by 2015. Some analysts believe the crunch could come earlier.
“At the moment companies are having to go ahead with what looks to be easiest,” Porter says. “Despite supply scares and price volatility, gas-fired generation is still easier to do than most.”
Recent developments back his view. The government has just given the green light to three gas-fired power plants, including a 2 gigawatt power station in Pembrokeshire.
Ian Marchant, chief executive of Scottish and Southern Energy, said this month that Britain will lose 14 to 18GW of capacity by 2015. He told the Commons business and enterprise committee that some 7GW of gas generating capacity was under construction and another 6GW had been given the go-ahead. That is balanced by some 46 renewable projects, providing about 5 megawatts of power generation.
Paul Golby, chief executive of E.ON UK, said last week that it was vital the UK maintained a variety of options: “Clearly gas has an important part to play, both in the near and the medium term. But we can’t become overly reliant on a single form of power generation if we’re to ensure security of supply, reduce our carbon emissions and ensure energy remains affordable for our customers.
“The only way we can do that is to, yes, build gas-fired power stations… But we also need to ramp up our renewable build, create a new generation of cleaner and, eventually, clean coal-fired power stations - and, longer term, replace the UK’s nuclear fleet. To become overly reliant on a single fuel - and one that will, in the next decade or so, become 80% imported - is simply too dangerous.”
Centrica chief executive Sam Laidlaw says this winter’s row between Russia and Ukraine has brought security of supply issues sharply back into focus and that the UK needs to develop diverse sources of gas as its dependence on imports increases. “Russia will play a role in the long term… but also more LNG [liquefied natural gas] coming from other sources has to be the answer so we aren’t dependent on one source. But, thinking about power generation, we can’t have another dash for gas.”
EDF has placed a multi-billion-pound bet on the development of a new generation of nuclear power in the UK through its acquisition of British Energy. Its UK subsidiary, EDF Energy, plans to build four new nuclear reactors and is aiming to have the first coming on stream at the end of 2017. In the meantime, the company is building a 1.3GW gas plant in Nottinghamshire. “Until nuclear can come on line, it is likely that much of the energy gap will be filled by new ‘combined-cycle’ gas turbines, as these are relatively cheap, quick to build and flexible, meaning they are able to respond to market prices,” the company says.
Gas and renewables, notably wind, can be complementary, rather than alternatives, with gas taking on the back-up role as more wind generation comes on stream. A key test, however, is whether companies will be able to secure returns on their investment in gas if the plant runs only to supplement wind power.
Money is an issue. Ian Parrett from energy analyst Inenco says: “Funding difficulties in the current economic climate are resulting in new generating capacity being delayed or even shelved. The UK’s lack of gas storage leaves the country running the risk of being held to ransom and forced to pay a premium for gas in a highly volatile market.”
Source- The guardian
Monday, 12 January 2009
Gas and electricity bills are rising four times faster in the UK
Britains energy prices have increased by 16.7 per cent over the past year.
The increase compares to the European average of 3.8 per cent, with 1.5 per cent in Germany, 1.3 in Denmark and 5.3 in Sweden. Continental energy companies have been accused of “picking the pocket” of British consumers as four of the six biggest gas and electricity firms in Britain are European-owned.
Among developed nations, only Australia (20 per cent) and Turkey (28.7 per cent) had faster price rises, the OECD figures showed. The figures were released after the Conservatives called for energy companies to be investigated for refusing to pass on price cuts to consumers.
The wholesale cost of energy has dropped sharply since the summer, but suppliers have failed to reduce what they charge customers, leading to accusations of profiteering.
British households saw their energy bills rise by £381 to £1,293 on average last year, according to price comparison website uSwitch.com.
It brings further misery to UK households which have seen their budgets squeezed by higher petrol and food costs compared to a year ago.
Will Marples, energy expert at uSwitch.com, said: “On top of this, consumers are dealing with the ongoing economic crisis while waiting for news of whether energy price cuts are going to be delivered this year or not. Whereas previously they may not have worried about how UK energy bills compared with those in Europe, or factors affecting prices, these issues are now firmly on the agenda as British consumers want to know that they are getting a fair deal.”
Energy experts suggest that British consumers suffer more than their European neighbours because of the country’s reliance on the gas market, and its lack of storage.
Britain has just 13 days’ gas storage, compared with 99 in Germany and 122 in France, making it less easy to stockpile gas when it is cheap.
Experts also warned that average prices could rise as a result of Russia cutting its gas supplies in a dispute with Ukraine.
Among the most vulnerable to price increases are pensioners, according to charities.
Paul Bates, a spokesman for Help the Aged suggested that more than 20,000 people die from preventable illnesses as a result of the cold.
He said: “Too many pensioners are facing the stark choice between heating and eating, putting their health at risk
“No older person should ever have to worry about whether they can afford to heat their homes properly in the winter.”
The Energy Retails Association said British customers have enjoyed historically low prices compared to Europe due to our reserves of natural gas in the North Sea.
She said: “The prices we now pay for our energy are more vulnerable to fluctuations.”
Source - The Telegraph
The increase compares to the European average of 3.8 per cent, with 1.5 per cent in Germany, 1.3 in Denmark and 5.3 in Sweden. Continental energy companies have been accused of “picking the pocket” of British consumers as four of the six biggest gas and electricity firms in Britain are European-owned.
Among developed nations, only Australia (20 per cent) and Turkey (28.7 per cent) had faster price rises, the OECD figures showed. The figures were released after the Conservatives called for energy companies to be investigated for refusing to pass on price cuts to consumers.
The wholesale cost of energy has dropped sharply since the summer, but suppliers have failed to reduce what they charge customers, leading to accusations of profiteering.
British households saw their energy bills rise by £381 to £1,293 on average last year, according to price comparison website uSwitch.com.
It brings further misery to UK households which have seen their budgets squeezed by higher petrol and food costs compared to a year ago.
Will Marples, energy expert at uSwitch.com, said: “On top of this, consumers are dealing with the ongoing economic crisis while waiting for news of whether energy price cuts are going to be delivered this year or not. Whereas previously they may not have worried about how UK energy bills compared with those in Europe, or factors affecting prices, these issues are now firmly on the agenda as British consumers want to know that they are getting a fair deal.”
Energy experts suggest that British consumers suffer more than their European neighbours because of the country’s reliance on the gas market, and its lack of storage.
Britain has just 13 days’ gas storage, compared with 99 in Germany and 122 in France, making it less easy to stockpile gas when it is cheap.
Experts also warned that average prices could rise as a result of Russia cutting its gas supplies in a dispute with Ukraine.
Among the most vulnerable to price increases are pensioners, according to charities.
Paul Bates, a spokesman for Help the Aged suggested that more than 20,000 people die from preventable illnesses as a result of the cold.
He said: “Too many pensioners are facing the stark choice between heating and eating, putting their health at risk
“No older person should ever have to worry about whether they can afford to heat their homes properly in the winter.”
The Energy Retails Association said British customers have enjoyed historically low prices compared to Europe due to our reserves of natural gas in the North Sea.
She said: “The prices we now pay for our energy are more vulnerable to fluctuations.”
Source - The Telegraph
Friday, 2 January 2009
UK Energy gap that could lead to blackouts
A TENTH of the UK’s power plants could be forced to close by the spring of 2013 – two-and-a-half years ahead of schedule, new research shows.
The revelation will stoke fresh concern that the government has not done enough to head off a looming energy generation gap that could lead to blackouts across the country.
Under an EU directive, companies operating old coal and oil-fired plants were given the option to spend hundreds of millions of pounds to upgrade them to comply with tougher pollution standards.
Those that “opted out” of the programme - nine plants representing about 15% of UK power supply - were given 20,000 hours to operate, starting from January last year through to the end of 2015. Based on research from the energy-consultancy group Utilyx, several of these plants have been running at historically high rates that would put them out of commission much sooner than originally thought.
The coal-fired plants at Kingsnorth in Kent, owned by Eon, Scottish Power’s Cockenzie plant, RWE-owned Npower’s stations at Tilbury and Didcot, and Scottish & Southern’s Ferrybridge plant will all be decommissioned by the spring of 2013 if current patterns continue. The stations generate some 7.6GW of electricity - 10% of the UK’s total capacity.
The first of them, Scottish Power’s 1.2GW plant at Cockenzie, which generates enough power for 1m homes, will close as early as September 2010 based on current rates. The research was based on analysis of running patterns at the plants from January 1 this year to the end of October.
“It is likely that a significant proportion of the UK’s opted-out coal plant will close earlier than 2015, with the impact felt around 2013,” said Kevin Akhurst, managing director of generation at Npower.
When companies decided whether to comply with the EU’s so-called Large Combustion Plant Directive (LCPD) four years ago, those plants that opted out were envisaged as “peaking plants” to be used only at time of maximum consumption and power prices. Most of them, it was thought, would easily last until 2015.
Chris Bowden, chief executive of Utilyx, said that because of the price of coal relative to record high prices of electricity and rising power demand, the opposite has happened. “When companies made the decision to opt out it was a very different world. The idea was that they would be peaking plants but now they are running as base-load providers,” he said. “The technology of some of these power stations would make them like classic cars, but now they are ready for the scrapheap.”
The data will add to fears about UK energy security after the Russian gas giant Gazprom threatened to cut off supplies to Europe due to a row with Ukraine.
Next year is critical for the UK energy industry. In January, Ed Miliband, the secretary for energy and climate change, is expected to decide on Eon’s controversial proposal to build a new 2GW plant to replace the Kingsnorth facility. It would be the UK’s first coal-fired power station in more than three decades and is an acid test of the government’s stance on coal and supply security.
New energy and planning bills will also come into effect in April, which the industry hopes will pave the way for swifter building and planning permission for new projects, one of the biggest obstacles to the construction of plants.
Source - The Times
The revelation will stoke fresh concern that the government has not done enough to head off a looming energy generation gap that could lead to blackouts across the country.
Under an EU directive, companies operating old coal and oil-fired plants were given the option to spend hundreds of millions of pounds to upgrade them to comply with tougher pollution standards.
Those that “opted out” of the programme - nine plants representing about 15% of UK power supply - were given 20,000 hours to operate, starting from January last year through to the end of 2015. Based on research from the energy-consultancy group Utilyx, several of these plants have been running at historically high rates that would put them out of commission much sooner than originally thought.
The coal-fired plants at Kingsnorth in Kent, owned by Eon, Scottish Power’s Cockenzie plant, RWE-owned Npower’s stations at Tilbury and Didcot, and Scottish & Southern’s Ferrybridge plant will all be decommissioned by the spring of 2013 if current patterns continue. The stations generate some 7.6GW of electricity - 10% of the UK’s total capacity.
The first of them, Scottish Power’s 1.2GW plant at Cockenzie, which generates enough power for 1m homes, will close as early as September 2010 based on current rates. The research was based on analysis of running patterns at the plants from January 1 this year to the end of October.
“It is likely that a significant proportion of the UK’s opted-out coal plant will close earlier than 2015, with the impact felt around 2013,” said Kevin Akhurst, managing director of generation at Npower.
When companies decided whether to comply with the EU’s so-called Large Combustion Plant Directive (LCPD) four years ago, those plants that opted out were envisaged as “peaking plants” to be used only at time of maximum consumption and power prices. Most of them, it was thought, would easily last until 2015.
Chris Bowden, chief executive of Utilyx, said that because of the price of coal relative to record high prices of electricity and rising power demand, the opposite has happened. “When companies made the decision to opt out it was a very different world. The idea was that they would be peaking plants but now they are running as base-load providers,” he said. “The technology of some of these power stations would make them like classic cars, but now they are ready for the scrapheap.”
The data will add to fears about UK energy security after the Russian gas giant Gazprom threatened to cut off supplies to Europe due to a row with Ukraine.
Next year is critical for the UK energy industry. In January, Ed Miliband, the secretary for energy and climate change, is expected to decide on Eon’s controversial proposal to build a new 2GW plant to replace the Kingsnorth facility. It would be the UK’s first coal-fired power station in more than three decades and is an acid test of the government’s stance on coal and supply security.
New energy and planning bills will also come into effect in April, which the industry hopes will pave the way for swifter building and planning permission for new projects, one of the biggest obstacles to the construction of plants.
Source - The Times
Sunday, 21 December 2008
Peak oil in 2020, says energy agency
Global oil production will peak much earlier than expected amid a collapse in petroleum investment due to the credit crunch, one of the world’s foremost experts has revealed.
Fatih Birol, chief economist to the International Energy Agency, told the Guardian that conventional crude output could plateau in 2020, a development that was “not good news” for a world still heavily dependent on petroleum.
The prediction came as oil companies from Saudi Arabia to Canada cut their capital expenditure on new projects in response to a fall in oil prices, moves that will further reduce supply in future.
Birol’s comments will give more ammunition to those who warn that the British government is dangerously complacent in not trying to wean the country off oil as quickly as possible. Some observers believe that, because the global economy is underpinned by oil, the peaking of supply will cause severe economic, social and political disruption unless prepared for over many years.
John Hemming, chairman of the All Party Parliamentary Group on Peak Oil and Gas, said Birol’s “conversion” was significant. “The penny has finally dropped - geological issues matter as well as political and economic. The IEA - unlike our government - appears to be leaving cloud cuckoo land finally,” he added.
The IEA has never before been specific about the point at which so-called conventional oil would peak. It said last month that total crude output could peak in 2030. Birol’s comments follow other signs that the IEA is rapidly changing its view. In its 2007 World Energy Outlook, the IEA predicted a rate of decline from the world’s existing oil fields at 3.7%, only to admit 12 months later that the speed of the fall was more likely 6.7%.
Jeremy Leggett, chief executive of solar energy company Solarcentury, said Birol’s views underplayed the scale of the problem. “The IEA is very constrained in what it can say - by the demands of its constituent governments - so you have to read between the lines. We believe that peak oil will come about in 2013 at the latest but the real concern from the IEA is the adjustment of production figures,” he said.
The energy agency, which represents most western governments including the UK and US, has been backtracking rapidly on previous positions.
Three years ago the Paris-based organisation still denied there was any fundamental threat to the world’s petroleum economy.
Source - The guardian
Fatih Birol, chief economist to the International Energy Agency, told the Guardian that conventional crude output could plateau in 2020, a development that was “not good news” for a world still heavily dependent on petroleum.
The prediction came as oil companies from Saudi Arabia to Canada cut their capital expenditure on new projects in response to a fall in oil prices, moves that will further reduce supply in future.
Birol’s comments will give more ammunition to those who warn that the British government is dangerously complacent in not trying to wean the country off oil as quickly as possible. Some observers believe that, because the global economy is underpinned by oil, the peaking of supply will cause severe economic, social and political disruption unless prepared for over many years.
John Hemming, chairman of the All Party Parliamentary Group on Peak Oil and Gas, said Birol’s “conversion” was significant. “The penny has finally dropped - geological issues matter as well as political and economic. The IEA - unlike our government - appears to be leaving cloud cuckoo land finally,” he added.
The IEA has never before been specific about the point at which so-called conventional oil would peak. It said last month that total crude output could peak in 2030. Birol’s comments follow other signs that the IEA is rapidly changing its view. In its 2007 World Energy Outlook, the IEA predicted a rate of decline from the world’s existing oil fields at 3.7%, only to admit 12 months later that the speed of the fall was more likely 6.7%.
Jeremy Leggett, chief executive of solar energy company Solarcentury, said Birol’s views underplayed the scale of the problem. “The IEA is very constrained in what it can say - by the demands of its constituent governments - so you have to read between the lines. We believe that peak oil will come about in 2013 at the latest but the real concern from the IEA is the adjustment of production figures,” he said.
The energy agency, which represents most western governments including the UK and US, has been backtracking rapidly on previous positions.
Three years ago the Paris-based organisation still denied there was any fundamental threat to the world’s petroleum economy.
Source - The guardian
Thursday, 30 October 2008
UK energy supply has entered into terminal decline
In recent years, the UK has become increasingly dependent on natural gas as its primary energy source. This strategy may soon be found to be based upon poor assumptions/perceptions regarding development of domestic and neighbouring natural gas reserves and, in general, regional and global supply capabilities.
1. UK marketable nat gas production (also gross) peaked in 2000 close to 110 Gcm/a.
2. During the last three years, UK nat gas production has declined at an annual rate of 8 - 10 %, which many energy analysts expect will continue.
3. Nat gas constituted more than 38 % of the UK primary energy consumption in 2007.
4. Several analyses expect UK to import 80 % of their nat gas consumption by 2020.
5. UK was a net exporter of nat gas for a brief period.
In 2007, more than 38 % of the UK’s primary energy consumption came from nat gas. Of the EU/OECD countries, only Italy has a higher portion of nat gas consumption. In comparison, the USA gets 25 % of its primary energy consumption from natural gas; France, 15 %; and Germany, 24 %.
In general, high nat gas usage is primarily found among countries with huge nat gas reserves like Russia, where nat gas amounted to more than 57 % of primary energy production in 2007. Russia is the world’s largest exporter of nat gas and second largest exporter of oil, so this high domestic usage frees up oil for export. Since oil generates more income than nat gas, based on units of energy exported, this approach maximizes export revenue.
The UK and Continental Europe have both benefitted from the bidirectional Interconnector that since 1998 has allowed for increased flexibility in nat gas supplies. Due to the decline in UK indigenous supplies and a tighter supply situation on Continental Europe, the importance of the Interconnector is expected to slowly diminish unless future Russian supplies are shipped through the system to UK.
Nat gas production within EU was on a plateau from 1996 to 2004 and has now entered into terminal decline. Increased nat gas production from Norway (which is not a full EU member) has slowed the decline. The balance of consumption within EU has been secured through increasing imports, primarily from Russia, North Africa and LNG. The diagram above suggests that imports into EU will need to grow quickly, from 200 Gcm/a at present to projected 400 Gcm/a by 2020, to fill the rapidly growing gap between declining supplies and projected growth in consumption.
If projected growth in EU nat gas consumption by 2020 is to be met, it will be necessary to double present imports of 200 Gcm/a from Russia, North Africa and LNG, a challenging task. With the ongoing credit crisis still unfolding, an increase in imports that allows maintenance of present EU consumption levels may turn out to be a major accomplishment.
As of 2007, 25 % of EU’s nat gas consumption was imported from Russia. Russian nat gas exports to the EU grew substantially after the completion of pipelines between Western Siberia and Europe by the mid 80’s.
There are good reasons to believe that the Russians (meaning Gazprom) planned their exports to the EU based upon available official data and forecasts from amongst others, EU members and Norway. This is of course a sensible thing to do if the goal is to maximize the profits from the Russian resource base and to optimize the allocation of investment funds. Why invest in expansions of production and infrastructure, if these investments are likely to contribute to an oversupply and a subsequent downward pressure on prices?
Perhaps what is needed is an energy czar. I think it was Matt Simmons who first used the expression “energy czar”, perhaps with a hidden meaning that Russians leaders far better understand the strategic nature of energy than their western counterparts, even though their access to data is not as good.
In 1995 - 1998, the UK exported nat gas to Ireland. In 1998, the Interconnector, the bidirectional pipeline between Bacton in UK and Zeebrugge in Belgium, started to flow. After that, the UK became a moderate exporter of nat gas to Continental Europe.
EU production of natural gas has peaked, and is expected to decline. EU exclusive of UK nat gas production peaked in 1996. Since then, natural gas production has been in a general decline and is expected to continue to decline. Recently Dutch authorities confirmed that their nat gas production is set to decline. These milestones were passed without much attention. For the next several years, projected increases in Norwegian nat gas production are expected to partly offset declines in production in the EU, but the overall production trend is expected to remain downward.
UK has for some years had an important role in securing a unique flexibility with respect to the EU nat gas supply chain. The combined effect of the declining nat gas production in UK and the rest of the EU has already tightened the supply situation for EU (ref the recent price growth within the liberalized UK market), and has the potential to develop into a severe nat gas supply crunch. Such a supply crunch could have cascading effects, and may affect other energy systems. These interrelationships seem to be poorly understood among those responsible for developing energy supply strategies.
Source - The Oil Drum
1. UK marketable nat gas production (also gross) peaked in 2000 close to 110 Gcm/a.
2. During the last three years, UK nat gas production has declined at an annual rate of 8 - 10 %, which many energy analysts expect will continue.
3. Nat gas constituted more than 38 % of the UK primary energy consumption in 2007.
4. Several analyses expect UK to import 80 % of their nat gas consumption by 2020.
5. UK was a net exporter of nat gas for a brief period.
In 2007, more than 38 % of the UK’s primary energy consumption came from nat gas. Of the EU/OECD countries, only Italy has a higher portion of nat gas consumption. In comparison, the USA gets 25 % of its primary energy consumption from natural gas; France, 15 %; and Germany, 24 %.
In general, high nat gas usage is primarily found among countries with huge nat gas reserves like Russia, where nat gas amounted to more than 57 % of primary energy production in 2007. Russia is the world’s largest exporter of nat gas and second largest exporter of oil, so this high domestic usage frees up oil for export. Since oil generates more income than nat gas, based on units of energy exported, this approach maximizes export revenue.
The UK and Continental Europe have both benefitted from the bidirectional Interconnector that since 1998 has allowed for increased flexibility in nat gas supplies. Due to the decline in UK indigenous supplies and a tighter supply situation on Continental Europe, the importance of the Interconnector is expected to slowly diminish unless future Russian supplies are shipped through the system to UK.
Nat gas production within EU was on a plateau from 1996 to 2004 and has now entered into terminal decline. Increased nat gas production from Norway (which is not a full EU member) has slowed the decline. The balance of consumption within EU has been secured through increasing imports, primarily from Russia, North Africa and LNG. The diagram above suggests that imports into EU will need to grow quickly, from 200 Gcm/a at present to projected 400 Gcm/a by 2020, to fill the rapidly growing gap between declining supplies and projected growth in consumption.
If projected growth in EU nat gas consumption by 2020 is to be met, it will be necessary to double present imports of 200 Gcm/a from Russia, North Africa and LNG, a challenging task. With the ongoing credit crisis still unfolding, an increase in imports that allows maintenance of present EU consumption levels may turn out to be a major accomplishment.
As of 2007, 25 % of EU’s nat gas consumption was imported from Russia. Russian nat gas exports to the EU grew substantially after the completion of pipelines between Western Siberia and Europe by the mid 80’s.
There are good reasons to believe that the Russians (meaning Gazprom) planned their exports to the EU based upon available official data and forecasts from amongst others, EU members and Norway. This is of course a sensible thing to do if the goal is to maximize the profits from the Russian resource base and to optimize the allocation of investment funds. Why invest in expansions of production and infrastructure, if these investments are likely to contribute to an oversupply and a subsequent downward pressure on prices?
Perhaps what is needed is an energy czar. I think it was Matt Simmons who first used the expression “energy czar”, perhaps with a hidden meaning that Russians leaders far better understand the strategic nature of energy than their western counterparts, even though their access to data is not as good.
In 1995 - 1998, the UK exported nat gas to Ireland. In 1998, the Interconnector, the bidirectional pipeline between Bacton in UK and Zeebrugge in Belgium, started to flow. After that, the UK became a moderate exporter of nat gas to Continental Europe.
EU production of natural gas has peaked, and is expected to decline. EU exclusive of UK nat gas production peaked in 1996. Since then, natural gas production has been in a general decline and is expected to continue to decline. Recently Dutch authorities confirmed that their nat gas production is set to decline. These milestones were passed without much attention. For the next several years, projected increases in Norwegian nat gas production are expected to partly offset declines in production in the EU, but the overall production trend is expected to remain downward.
UK has for some years had an important role in securing a unique flexibility with respect to the EU nat gas supply chain. The combined effect of the declining nat gas production in UK and the rest of the EU has already tightened the supply situation for EU (ref the recent price growth within the liberalized UK market), and has the potential to develop into a severe nat gas supply crunch. Such a supply crunch could have cascading effects, and may affect other energy systems. These interrelationships seem to be poorly understood among those responsible for developing energy supply strategies.
Source - The Oil Drum
Saturday, 4 October 2008
A very cold UK energy winter indeed
UK families will from today face paying spiralling energy costs as increases to electricity and gas bills are introduced.
Consumers will now have to pay almost 20% more for gas and 33% more for electricity.
The huge increase, announced last month, sparked concerns about the impact among the business community as well as householders who are already suffering from jumps in food and fuel prices.
From today Phoenix Gas customers face a 19.2% hike for domestic and small industrial and commercial customers.
The increase adds around £2.15 a week to the average household gas bill, resulting in an average customer paying £689 per year.
While NIE customers will be paying 33.3% more. This follows an earlier increase in gas prices of 28% four months ago.
Last month Phoenix Gas said large increases in wholesale gas costs left them with “no alternative” but to review prices.
However, when asked if they would consider introducing a cap on tarrifs, NIE Energy said it “does not currently offer fixed or capped electricity prices” like other UK energy companies.
It said it is “a regulated business operating under a price control, determined by the regulator, who acts on behalf of all consumers in the UK”.
Kerstie Forsyth from NIE Energy said: “We are concerned about the impact of this increase on our customers, particularly those on lower incomes.
“We can’t control world fuel prices, which have led to this increase, but what we can do is offer discounted electricity.”
He said: “Our customers can be assured that we are committed to delivering gas at the lowest possible price both now and into the future.
“If, as we hope, worldwide energy prices fall, Phoenix will reduce its prices accordingly.”
Michael Hughes, chief executive of the Rural Community Network, representing people in rural areas on issues relating to poverty and disadvantage, said many will struggle to pay high energy bills this winter.
“Statistically there is more unfit housing in rural areas than in urban,” he said. “Those are the houses that are harder to heat, the older house that the person has lived nearly all their lives and wouldn’t want to move.”
However he said that the current situation will prove a financially tough time for most people across the country.
“This is not the case for getting into a debate about people in urban and rural areas and who is poorer. There are disadvantaged in all areas, but this is also affecting people throughout the country who would normally be comfortably off.”
On Monday the Assembly backed plans for the Executive to spearhead an action plan to counter the effects of spiralling energy bills.
But Mr Hughes said: “The Executive needs to get working again urgently to deal with these issues and help those who have to choose between food or heat this winter.”
Source - The belfast telegraph
Consumers will now have to pay almost 20% more for gas and 33% more for electricity.
The huge increase, announced last month, sparked concerns about the impact among the business community as well as householders who are already suffering from jumps in food and fuel prices.
From today Phoenix Gas customers face a 19.2% hike for domestic and small industrial and commercial customers.
The increase adds around £2.15 a week to the average household gas bill, resulting in an average customer paying £689 per year.
While NIE customers will be paying 33.3% more. This follows an earlier increase in gas prices of 28% four months ago.
Last month Phoenix Gas said large increases in wholesale gas costs left them with “no alternative” but to review prices.
However, when asked if they would consider introducing a cap on tarrifs, NIE Energy said it “does not currently offer fixed or capped electricity prices” like other UK energy companies.
It said it is “a regulated business operating under a price control, determined by the regulator, who acts on behalf of all consumers in the UK”.
Kerstie Forsyth from NIE Energy said: “We are concerned about the impact of this increase on our customers, particularly those on lower incomes.
“We can’t control world fuel prices, which have led to this increase, but what we can do is offer discounted electricity.”
He said: “Our customers can be assured that we are committed to delivering gas at the lowest possible price both now and into the future.
“If, as we hope, worldwide energy prices fall, Phoenix will reduce its prices accordingly.”
Michael Hughes, chief executive of the Rural Community Network, representing people in rural areas on issues relating to poverty and disadvantage, said many will struggle to pay high energy bills this winter.
“Statistically there is more unfit housing in rural areas than in urban,” he said. “Those are the houses that are harder to heat, the older house that the person has lived nearly all their lives and wouldn’t want to move.”
However he said that the current situation will prove a financially tough time for most people across the country.
“This is not the case for getting into a debate about people in urban and rural areas and who is poorer. There are disadvantaged in all areas, but this is also affecting people throughout the country who would normally be comfortably off.”
On Monday the Assembly backed plans for the Executive to spearhead an action plan to counter the effects of spiralling energy bills.
But Mr Hughes said: “The Executive needs to get working again urgently to deal with these issues and help those who have to choose between food or heat this winter.”
Source - The belfast telegraph
Thursday, 14 August 2008
Future of UK’s energy supply is bleak
With every week that goes by it becomes clearer that, within a few years, Britain will face an unprecedented crisis, thanks to the shambles the Government has made of our energy policy.
After years of dereliction, when only a crash programme of measures could keep our lights on and our economy functioning, our policy has become so skewed by blinkered environmentalism and diktats from the EU that we are fast heading for the worst of all worlds - a near-total dependence on foreign sources of energy which will not only be astronomically expensive but which can in no way be guaranteed to supply all the electricity we need.
What are the hard facts?
Between now and 2015 we shall lose 40 per cent of the generating capacity we currently require to meet maximum demand (still rising), due to the phasing out of almost all our obsolescent nuclear reactors and the closure of nine of our major coal- and oil-fired power stations under an EU “anti-pollution” directive.
Gordon Brown talks about building a new generation of nuclear power plants, for which we would have to rely on the French - having two years ago sold off Westinghouse, the only British-owned firm capable of constructing them.
But even if the French play ball, which seems less likely since the collapse of Brown’s plan to sell off British Energy to France’s EDF, the new plants could still not be built in time to plug the gap.
The only short-term remedy will be to build yet more gas-fired stations, at a time when we are fast running out of our own gas supplies and when gas prices are shooting through the roof, reducing us to dependence on countries such as Mr Putin’s Russia or Qatar, both of which have recently announced caps on future exports.
Our best bet might seem to invest urgently in a dozen more coal-fired power stations, which still supply more than a third of our electricity.
But own coal industry is so run down - though we still have more than 100 years of reserves - that barely a quarter of the 62 million tons of coal we used last year was British.The rest had to be imported, including 22 million tons from Russia and 12 million tons from South Africa.
At a time when rocketing world demand for coal has already doubled prices in a year, we should again be dependent on unreliable foreign sources, to generate electricity by means which excite almost as much fury from environmentalists as nuclear power - as we saw with last week’s demonstrations against plans by German-owned E.On to build a new “clean coal” station at Kingsnorth in Kent.
With this colossal crisis fast approaching, our ministers are still lost in the cloudcuckooland of Mr Brown’s £100 billion “green energy” plan, to meet our EU target of generating a third of our electricity from renewables by 2020.
Not an energy expert in the country says this is remotely feasible. Our present 2,000 wind turbines supply just 1.5 per cent of our power, and even if Mr Brown’s 7,000 additional turbines could in practice be built, we would still be more than 200 per cent short of our EU target.
Worse still is the fact that our electricity investment market is now so skewed by the various subsidy and “carbon savings” schemes adopted to meet our various EU targets that these are now uselessly soaking up more than £5 billion a year which should otherwise be urgently invested in proper generating capacity.
Our major power companies can now make so much money from “renewables” subsidies and other “planet saving” schemes that they have much less incentive to risk capital on those which might keep our lights on.
Our energy policy is now so constrained and distorted by EU requirements that, even if we had a government with the knowhow and will to sort out the mess, we should soon be breaking EU laws all over the place.
Tragically, no one seems to remain in more blissful ignorance of all these harsh realities than our Conservative opposition which, when the crisis arrives, may well be in power.
Not only will those at the top of the Tory party, on present showing, have no idea why the lights are going out, but they will have even less idea of what to do about it - because by then it will be too late.
Source: The Telegraph
After years of dereliction, when only a crash programme of measures could keep our lights on and our economy functioning, our policy has become so skewed by blinkered environmentalism and diktats from the EU that we are fast heading for the worst of all worlds - a near-total dependence on foreign sources of energy which will not only be astronomically expensive but which can in no way be guaranteed to supply all the electricity we need.
What are the hard facts?
Between now and 2015 we shall lose 40 per cent of the generating capacity we currently require to meet maximum demand (still rising), due to the phasing out of almost all our obsolescent nuclear reactors and the closure of nine of our major coal- and oil-fired power stations under an EU “anti-pollution” directive.
Gordon Brown talks about building a new generation of nuclear power plants, for which we would have to rely on the French - having two years ago sold off Westinghouse, the only British-owned firm capable of constructing them.
But even if the French play ball, which seems less likely since the collapse of Brown’s plan to sell off British Energy to France’s EDF, the new plants could still not be built in time to plug the gap.
The only short-term remedy will be to build yet more gas-fired stations, at a time when we are fast running out of our own gas supplies and when gas prices are shooting through the roof, reducing us to dependence on countries such as Mr Putin’s Russia or Qatar, both of which have recently announced caps on future exports.
Our best bet might seem to invest urgently in a dozen more coal-fired power stations, which still supply more than a third of our electricity.
But own coal industry is so run down - though we still have more than 100 years of reserves - that barely a quarter of the 62 million tons of coal we used last year was British.The rest had to be imported, including 22 million tons from Russia and 12 million tons from South Africa.
At a time when rocketing world demand for coal has already doubled prices in a year, we should again be dependent on unreliable foreign sources, to generate electricity by means which excite almost as much fury from environmentalists as nuclear power - as we saw with last week’s demonstrations against plans by German-owned E.On to build a new “clean coal” station at Kingsnorth in Kent.
With this colossal crisis fast approaching, our ministers are still lost in the cloudcuckooland of Mr Brown’s £100 billion “green energy” plan, to meet our EU target of generating a third of our electricity from renewables by 2020.
Not an energy expert in the country says this is remotely feasible. Our present 2,000 wind turbines supply just 1.5 per cent of our power, and even if Mr Brown’s 7,000 additional turbines could in practice be built, we would still be more than 200 per cent short of our EU target.
Worse still is the fact that our electricity investment market is now so skewed by the various subsidy and “carbon savings” schemes adopted to meet our various EU targets that these are now uselessly soaking up more than £5 billion a year which should otherwise be urgently invested in proper generating capacity.
Our major power companies can now make so much money from “renewables” subsidies and other “planet saving” schemes that they have much less incentive to risk capital on those which might keep our lights on.
Our energy policy is now so constrained and distorted by EU requirements that, even if we had a government with the knowhow and will to sort out the mess, we should soon be breaking EU laws all over the place.
Tragically, no one seems to remain in more blissful ignorance of all these harsh realities than our Conservative opposition which, when the crisis arrives, may well be in power.
Not only will those at the top of the Tory party, on present showing, have no idea why the lights are going out, but they will have even less idea of what to do about it - because by then it will be too late.
Source: The Telegraph
Saturday, 14 June 2008
Oil price to hit $250 in 2009 - Gazprom
The Russians undermined Opec’s attempts to talk down the oil market yesterday by warning that crude prices could almost double to $250 a barrel within 18 months.
The prediction from Alexey Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 a barrel even though Opec insisted everyone was already “panicking” unnecessarily and stressed there were no shortages.
The soaring value of crude yesterday pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills, while the current price of motor diesel has already reached £1.30 a litre.
Gazprom said the higher crude prices it expected would drag gas values up too. “We think it [oil] will reach $250 a barrel in the foreseeable future,” said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.
The comments came 24 hours after Tony Hayward, the BP chief executive, said supply constraints were partly responsible for the very high crude prices so far.
A spokesman for Gazprom, which is also one of Russia’s largest crude producers, expected the price to hit $250 some time in 2009. The company exports gas to Europe at prices linked to oil products for historic reasons and Miller said the current gas price was $410 per 1,000 cubic metres.
Analysts said the latest Russian energy estimates were hard to support and noted they were not backed up with specified research data. “It’s crazy… maybe they know something we don’t,” said one. Abdullah al-Badri, the secretary general of Opec, had earlier appealed for calm. “Really we need some calm. We are panicking too much,” Badri told a global energy summit. “The situation is unbearable as far as we are concerned. I want to say, there is no shortage now and in the future.”
Saudi Arabia said on Monday it would soon call for a meeting to discuss what it called unjustified rises in prices.
Badri supported holding such a meeting, which he said might happen before the next scheduled Opec gathering on September 9. He hoped that measures could be taken to curb speculation in the oil market, a factor Opec believes is inflating prices to levels not justified by supply and demand.
“We are not happy with the current level of price for one reason. It has nothing to do with the fundamentals,” he said.
“Speculators are playing a big role in high oil prices. Also there are other considerations, the value of the dollar and the geopolitical situation.”
Source - The Guardian
The prediction from Alexey Miller, chairman of Gazprom, came as the price of oil leaped $2.75 to $137.10 a barrel even though Opec insisted everyone was already “panicking” unnecessarily and stressed there were no shortages.
The soaring value of crude yesterday pushed British wholesale gas prices to new record highs of 100.75p per therm for next winter deliveries. This will put pressure on domestic heating bills, while the current price of motor diesel has already reached £1.30 a litre.
Gazprom said the higher crude prices it expected would drag gas values up too. “We think it [oil] will reach $250 a barrel in the foreseeable future,” said Miller, insisting that high demand rather than financial speculation was the primary factor, an argument that runs counter to that put forward by Opec.
The comments came 24 hours after Tony Hayward, the BP chief executive, said supply constraints were partly responsible for the very high crude prices so far.
A spokesman for Gazprom, which is also one of Russia’s largest crude producers, expected the price to hit $250 some time in 2009. The company exports gas to Europe at prices linked to oil products for historic reasons and Miller said the current gas price was $410 per 1,000 cubic metres.
Analysts said the latest Russian energy estimates were hard to support and noted they were not backed up with specified research data. “It’s crazy… maybe they know something we don’t,” said one. Abdullah al-Badri, the secretary general of Opec, had earlier appealed for calm. “Really we need some calm. We are panicking too much,” Badri told a global energy summit. “The situation is unbearable as far as we are concerned. I want to say, there is no shortage now and in the future.”
Saudi Arabia said on Monday it would soon call for a meeting to discuss what it called unjustified rises in prices.
Badri supported holding such a meeting, which he said might happen before the next scheduled Opec gathering on September 9. He hoped that measures could be taken to curb speculation in the oil market, a factor Opec believes is inflating prices to levels not justified by supply and demand.
“We are not happy with the current level of price for one reason. It has nothing to do with the fundamentals,” he said.
“Speculators are playing a big role in high oil prices. Also there are other considerations, the value of the dollar and the geopolitical situation.”
Source - The Guardian
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