REVOLT News 149

24/08/2003

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 REVOLT News 149

1. From Western Morning News 15.8.03, among reports of a number of renewable generation projects in Devon: Britain's first ever dung-fired power station has been supplying "green" electricity to the National Grid for six months in Holsworthy. The 7 million Holsworthy Biogas plant converts raw slurry collected from local farms into a biofertiliser, employs ten people and produces around six megawatts of electricity a day, enough to power about 6,000 homes.

2. The collapse of the eastern USA power system this week (15.8.03) has prompted much speculation of such power failure in England, possibly this coming winter when demand is at its peak. NG is reported as having warned that the system will be vulnerable for several weeks. There are three key factors exacerbating this problem, two of them rarely recognised but with potential remedies. First, there is the well- aired factor of the shortfall of reserve generation capacity. Second, the lack of regional balance of generation and demand leads to grid overloads and domino-effect failures as in the US. In UK the problem appears in the build up of surplus generation in the north to serve excess demand in the south. Third, government policy to develop wind power on a large scale ignores its severely intermittent nature (averaging only a third of its capacity) and the consequent severe diseconomy this forces on conventional generation required to back it up. The remedies to the first factor lie in regulation and market stability, not easy! The second factor would be more easily remedied by regulation to reflect the full effect of location of generation, plus added incentives and penalties - such as a region-to-region electricity import/export tax, together with policies to control consents for new power stations and to promote distributed generation more effectively. The third factor requires new wind projects (on- or off-shore) firstly to be located in regions of net demand and secondly to be accompanied by back-up generation purchasing deals in the same regions. The ultimate solution for wind power would be to have wind farms produce hydrogen which can be piped to distributed continuous generation units.

3. For more comment on the implications for UK in the wake of the US blackouts, see APPENDIX 1 for pieces from Times Online kindly circulated by Angela Kelly of Country Guardian.

4. This year's Revolt AGM will be held at the Methodist Church Hall, Sowerby, at 7.30 p.m. on Thursday 2nd October 2003.

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APPENDIX 1 - notes from Times Online re. power failure risk.

Times online

August 17, 2003 Britain heads for US-style blackouts Gareth Walsh and Nicholas Hellen HOUSEHOLDERS could face regular power blackouts unless the government bails out the ailing energy industry, one of Britain's biggest electricity generators warned yesterday.

Powergen, which generates 15% of the country's electricity, urged the government to intervene to save power stations from closure.

Electricity producers embarked on a closure of power plants in the past three years because of a 40% slump in wholesale prices, sparked by a government shake-up of the industry.

The move has cut spare capacity, bringing Britain close to blackouts. During this summer's heatwave, spare capacity shrank to 8% as businesses turned up their air conditioning.

The crisis in the industry has been forced into the spotlight following last week's blackout when 50m American and Canadian customers lost supplies.

Yesterday a Powergen spokesman said: "We want some mechanism to ensure capacity is able to come on line to avoid price shocks and blackouts. We are not sure that really exists." He predicted blackouts in the next two years unless the government injected extra cash to prevent mothballing of plants.

Mike Calviou, a director National Grid Transco which runs Britain's network of power lines, said: "There are risks of disruption this winter. Sufficient plant is not currently available to meet operational requirements."

Generators have been negotiating with ministers to reintroduce a system of "capacity payments" - subsidies to maintain power stations in an idle state ready to meet sudden rises in demand, such as during cold snaps in the winter.

The payments were phased out in April 2001 under a new electricity trading system and generating companies have failed to persuade ministers that they should be reintroduced.

Professor Ian Fells, of Newcastle University, a government energy adviser who believes there is a one-in-five chance of blackouts this winter, said the threats of power cuts showed government policy had failed.

"This means that driving down the wholesale price of electricity has been counterproductive and the price of electricity is going to rise," he said.

"As far as customers are concerned, you have to pay for insurance and the government's simplistic policy of just driving prices down has not worked.

"Planning in the energy business is long term. Government economists do not understand that (building) a dam or power station and even large wind farms takes at least 10 years."

Brian Wilson, who was energy minister until the reshuffle in June, said the government would have to intervene. "Throughout my time as energy minister I was highly sceptical of the priority given by the regulator to driving down the generator price of electricity," he said.

"Apart from anything else, by driving producers out of the market it became inevitable that the price would rise later so any political gain is short term.

"Government has to some extent abdicated its power in this area by creating an independent regulator."

The Institution of Civil Engineers warned last month that the energy industry was at "its lowest ebb since privatisation" with many generators in "serious financial difficulty" and little investment in new generation.

Although the Department of Trade and Industry has been anxious to play down the problem, it is running out of options. It has already had to bail out British Energy, which runs most nuclear power stations, while Drax in Yorkshire, the largest coal-fired plant in Europe, is in administration.

Electricity retailers have been accused of profiteering from the new system by failing to pass on cheaper wholesale prices to consumers.

Ofgem, the industry regulator, insisted that the market was coping well. A spokesman said wholesale prices rose and fell in accordance with demand.

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Times online

August 19, 2003 Planning secure energy supplies >From Lord Ezra Sir, I agree with Professor Ian Fells (report, August 16) that blackouts are possible here as in North America. Electricity is now as basic a commodity as food and water. But whereas the latter can be stored to meet surges in demand, electricity cannot. We can only cope by maintaining a substantial reserve of generating capacity. Unfortunately, in Britain this has been drastically reduced - from 28 per cent to 16 per cent or less - as a result of many years of falling wholesale electricity prices, which has led to generating companies taking out plant altogether or mothballing it.

So we do now risk being unable to meet unexpected surges in demand. In the short term there is probably little that can be done other than to shed load in a way that causes least disruption and to persuade generating companies to bring back mothballed plant.

There can be a more effective solution in the longer term. This is by stimulating the distributed or localised generation of electricity, normally in the form of small-scale plant. The widespread development of distributed generation could have many advantages: it could reduce the pressure on the national grid; it could make use of the waste heat, which is not possible in practical terms from large-scale plant; and it could thereby achieve efficiencies almost double those of conventional power stations, thus emitting much less CO2 into the atmosphere.

In order to bring this about, "very substantial changes will be needed in the way in which our distribution networks are designed, organised and financed", according to the Government's Energy White Paper of February this year. Ofgem, the gas and electricity regulatory body, which supports these changes, has described them as the equivalent of "rewiring Britain".

We must proceed urgently with the rewiring of Britain.

Yours faithfully, DEREK EZRA (Chairman, Micropower Ltd), House of Lords. August 18.

>From the President of The Combustion Engineering Association

Sir, Britain is heading for a crisis in power supplies to which no amount of preferential treatment for renewable energy sources can do more than make a peripheral contribution for decades to come.

To provide secure, sustainable, affordable energy in the future requires decisions to be made now, based on clean fossil fuels with carbon capture (ie, causing no harmful emissions) and on nuclear power.

This is the art of the possible, not the cloud-cuckoo-land of wishful thinking which was over-promoted in the recent Energy White Paper.

Britain should stop subsidising windmills (only building them to the extent that they are commercially viable) and instead encourage more clean projects such as Coalpower's proposed integrated gasification plant (Business, August 6) - again, no harmful emissions. We should try vigorously to remove the perceived statutory obstacles to underground storage of carbon dioxide beneath the North Sea: enormous strides in the necessary technology are being taken in Europe and North America.

We ought to promote development of the cleaner use of coal, especially by gasifying it as a substitute for natural gas. We should be planning now the type of nuclear station which could best replace the first- generation plants which will be closed over the next decade.

Yours faithfully, KENNETH J. FERGUSSON, President, The Combustion Engineering Association, 1a Clarke Street, Ely Bridge, Cardiff CF5 5AL. August 16.

------------------------------------------------------------------------ Times online

August 20, 2003 Powergen to bring Kent unit out of mothballs By Angela Jameson, Industrial correspondent POWERGEN, one of the UK's biggest electricity generators, is to bring part of a mothballed power plant back on stream in anticipation of steeply rising power prices this winter.

The move underlines concerns, which reached a peak last week, that the UK could fall short of power when the weather turns cold.

Paul Golby, chief executive of Powergen, said that one unit at the oil- fired power station at Grain in Kent would be restarted next month, providing 650 MW of power to the national grid, enough for half a million homes.

Two units at the plant were mothballed last spring because of overcapacity and low power prices, but Powergen will restart only one unit. Two other units at the plant have been out of action for far longer but there are no plans to bring these back on stream.

Mr Golby said: "We've taken this step to provide more power this winter, when demand is at its highest and wholesale prices are at a level that potentially make it economic to generate from this unit."

He added: "We keep the economics of our plant under review and have no immediate plans to restart other mothballed plant."

It costs Powergen 40 per MW hour to produce power from Grain, compared with forward power prices for this winter of 23 per MW hour. Consequently Powergen is expected to keep the plant on standby for when demand peaks and prices spike.

The Grain unit represents less than 10 per cent of total British power plant that is currently in mothballs. According to a spokesman for National Grid Transco, 7,500 MW of generating capacity is now in mothballs, while there is 65,000 MW of available capacity. However, even in the most severe winter weather only 55,306 MW of power is needed.

The decision to restart one unit at Grain comes after prices for this winter rose sharply in recent months after mothballing trimmed oversupply. National Grid Transco was forced to issue seven warnings in recent weeks that its cushion of spare capacity to deal with unexpected breakdowns or surges was running dangerously low. Spot prices in the UK and across Europe have also soared as the heatwave has stretched supply.

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-- Mike O'Carroll

 

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