REVOLT News 153

2/11/2003

Text Version 

 REVOLT News 153

1. Passed on from Country Guardian (the wind-farm group) - excerpt from letter to editor, Times 13.10.2003 : IN JAPANESE cities, state- of-the-art furnaces burn refuse, without pollution, and generate power of around 25,000kW. -- Ian Beckett, Alton, Hampshire

2. Also passed on by Country Guardian, a piece from Times on-line claiming utilities mergers and take-overs have lost billions. See APPENDIX 1 below.

3. And a further piece from the Telegraph on NG and blackouts (APPENDIX 2 below).

4. On the subject of blackouts, Anne McIntosh MP raised further Parliamentary Questions on 14.10.03 and wrote to NG. Replies identify normal energy losses on the transmission (high voltage) grid at about 1.5% and on the local distribution grid about 7%. Transmission failures on the National Grid are rare, just 10 in the year to 30.9.03, due to lightning and protection operations and two due to incidents (one construction and one an aircraft crash!). Losses due to transmission failure are only 0.0001 %, underlining the case that more reinforcement is not generally needed. There is ample grid providing generation policy is sensible. But it isn't, and that's where the problem lies. My comments are at APPENDIX 3 below.

5. Another piece on blackouts, from the Guardian, is at APPENDIX 4. Minister Geoff Rooker is reported as opening the door to retaining nuclear power.

6. More from Country Guardian: a paper from Ofgem suggests a billion pounds may be spent to upgrade the grid to cope with renewable energy (mainly for wind farms). See APPENDIX 5. For more about Country Guardian and wind farms see <http://www.wind-farm.org>.

7. More on blackouts, from Times on line, at APPENDIX 6.

8. Angela Ovenston's selections on fuel cells and other energy news from news@all-energy are at APPENDIX 7. She says: Lots of interesting developments worldwide now, though I dread to think what some of this will do to the landscape...could be worse than pylons!!

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APPENDIX 1 Times online 14.10.2003

Acquisition frenzy conducted by Europe‚s biggest utility groups has destroyed more than •80 billion (£57 billion) of value between 1999 to 2002, according to research by UBS and Deloitte.

European Commission is to issue guidelines to prompt EU governments to ensure a constant flow of electricity so as to avoid crippling blackouts in an increasingly liberalised market.

National Grid Transco has said that Britain faces its tightest electricity squeeze for 13 years this winter, with spare capacity of just 15 per cent.

Edited by Neelam Verjee

Times online

October 14, 2003 buying sprees 'cost investors billions' Angela Jameson, Industrial Correspondent acquisition frenzy that engulfed Europe?s biggest utility groups destroyed more than ¬80 billion (£57 billion) of shareholder value between 1999 and 2002, according to new research by UBS and Deloitte.

The study shows that the trend in the utilties sector for companies to conduct cross-border raids in an attempt to boost short-term performance, led to a lower return on invested capital for most of Europe?s water and power groups.

Five companies ? RWE, E.ON, Enel, Endesa and Suez ? account for more than 90 per cent of the amount destroyed annually, the report said. The revelation exposes the myth fostered by utilities companies over the past five years that growth can be achieved only through scale.

?With 12 of the 14 European companies analysed by us demonstrating clear value destruction in the past five years, this is an industry that is dying and where the largest companies have destroyed a significant proportion of their shareholders? interests in this timeframe,? Pat Breen, a consultant at Deloitte and one of the report?s authors, said.

Two utilities that have managed to create value over the past three years are Centrica, which owns British Gas and the AA, and Scottish & Southern, the electricity generator and retailer.

Three of the five companies to have destroyed the most value have spent billions of pounds in the UK. Suez, the French water giant, was one of the first continental utilities to arrive and bought Northumbrian Water, which it has since disposed of.

RWE, the German electricity group, paid £4.3 billion for Thames Water in 2000 and £3.5 billion for Innogy, the power generator in 2002.

E.ON, RWE?s German rival, bought Powergen for £5.1 billion in 2002 and is now attempting to buy Midlands Electricity, the electricity distribution company.

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APPENDIX 2. From the Telegraph 12.10.03

National Grid acts to avert blackouts By Mary Fagan (Filed: 12/10/2003)

Emergency measures to prevent power cuts this winter have been drawn up by National Grid Transco, which runs the UK's energy networks.

Within the next few weeks, NGT will launch a drive to buy extra "reserve" electricity from power generators to ensure that the lights do not go out over the coming months.

This week Ofgem, the energy watchdog, is expected to publish figures showing that the UK's electricity safety buffer (the margin between generating capacity and average peak winter demand) still falls short of NGT's target of around 20 per cent. The power group hopes to encourage generators to take more stations out of mothballs to fill the gap.

The threat of blackouts has risen to the top of the political agenda since power cuts in parts of London plunged the capital into chaos in August. The recent widespread power failure in Italy has further heightened ministerial fears.

The UK's safety margin has shrunk because a collapse in wholesale power prices over the past two years forced generators to close or mothball plants. NGT and Ofgem have been encouraging companies to bring plant back on line, but the safety margin is still 17.7 per cent, compared with about 25 per cent two years ago.

The security of supply issue will be highlighted on Thursday at a conference held by Amicus, the power workers' union, and attended by Patricia Hewitt, the trade secretary. Amicus is warning that stringent regulation of the industry could cause lack of investment and staffing shortages, which could lead to power cuts.

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APPENDIX 3 Comments in response to Parliamentary Questions and Answers of 14.10.03.

There are different sorts of "losses": (a) losses of power and energy due to heating, with a resulting "leakage" in the working grid, firstly in the high voltage transmission system (the National Grid) and secondly in the low voltage distribution system (regional grids); (b) losses due to grid outages, i.e. when a system fails, such as transmission failures when power lines are broken or out of action; (c) losses due to insufficient generation to meet demand, which could be precipitated by power station failure or a failure of gas supply, or could be caused simply by demand peaking beyond the scope of reserve generation; (d) compound (b) + (c) failures, e.g. where transmission failures cut off generation for which there is not appropriately located reserve, or where one generation failure triggers a grid failure cutting off further generation. These compound risks are heightened when reserve generation is barely adequate and/or badly located.

In engineering, the term "loss" usually means loss of energy of type (a). The other two types are failures rather than energy losses.

However, all four types will be exacerbated by dependence on remote generation (in the north) and bulk transmission (to the south). The cost of type (a) losses is very large - we estimate such losses (from both generation and transmission) associated with the new Yorkshire 400kV line, compared with an equivalent amount of distributed CHP, to be in the region of half a billion pounds per year at wholesale prices.

Type (b) failures are very rare in transmission. That underlines our argument that the transmission grid is very secure and does not need major new lines like the Yorkshire line. But building up dependence on remote generation and bulk transmission would threaten the whole system. The short power failures most of us experience every year are local failures in the distribution system, on the smaller lines typically on wooden poles.

The interesting large multinational power failures in the last year or so have been of type (d). For example, Italy depended on imports from Switzerland which were cut off by a combination of failures and were not replaceable by appropriately located available reserve in Italy. Something similar happened between USA and Canada. These events illustrate how dependence on remote generation and bulk transmission can exacerbate both the risk and the scale of failures.

UK energy policy is ambiguous - it promotes distributed generation and CHP on the one hand, while the promotion of more surplus generation in the far north, whether by gas or imports or wind, works to the opposite effect on the other hand. This latter tendency is what threatens major failures of types (b) and (c) compounded together.

Further, the relentless but unrealistic pursuit of wind power creates a large-scale dependency on conventional back-up generation which is forced into the diseconomy of part-time operation. That is a disincentive to back-up generators, yet the unreliability of wind further exacerbates the risk of such compound failures.

I accept that underground cables are not a practical solution to these problems. The solution lies in promoting distributed generation and regional balance of generation with demand, and by reducing remote generation and bulk long-distance transmission. Government policy in practice implies more grid, more remote generation, less reliable generation, uneconomic back-up and disincentives for reserve generation.

Unfortunately the government has not grasped the either nature of type (d) failures or the solution as explained in the previous paragraph.

MJOC 28.10.03

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APPENDIX 4 From the Guardian 22.10.03.

Blackout risk forces nuclear rethink: Planning minister argues that Kyoto targets will be missed without an energy policy u turn Terry Macalister. The Guardian. Manchester UK, p. 22

Copyright, Guardian Newspapers Limited, Oct 22, 2003)

A government minister has made clear that nuclear power is back near the top of the energy agenda after the recent bout of electricity blackouts in Britain, mainland Europe and North America.

The comments from planning minister Lord Rooker come ahead of a report today saying the government is in danger of missing its targets to increase energy efficiency as part of its attempt to cut greenhouse gas emissions.

The new interest in the atomic power sector was spelled out in a parliamentary debate and has delighted a nuclear sector which looked all but doomed by a negative energy review last spring.

Answering a question from Lord Monro of Langholm calling for a halt to the construction of wind farms, Lord Rooker said: "Those who do not want fossil fuel generation must accept non-fossil generation which causes no pollution to the atmosphere - which could be wind farms, waves or even nuclear energy."

He added: "People cannot have it both ways. When people in this country put the light switch on in 20 or so years time, they expect the lights to go on, but they will not if we make the wrong decision now, and our generation will rightly get the blame."

The Nuclear Industry Association, which represents British Energy and others engaged in the atomic sector, said it was delighted to see the government was coming round to its way of thinking.

"The nuclear industry has always called for a sensible mix of electricity generating sources, including nuclear and renewables. As the only large scale greenhouse gas-free electricity source currently in the market, it is vital that nuclear power's output is maintained so the UK can meet its Kyoto commitments," said NIA chief executive Keith Parker.

The government's energy review did not completely close the door to nuclear but made clear that it would not be sanctioning a new generation of plants, at least for the time being.

That was a severe blow to an industry which had argued it needed to start planning immediately so it would be ready for the designs and capability to build modern plant as the present generation came to the end of their natural life cycle, between now and 2020.

Official publication of the white paper was preceded by the resignation of Norman Askew as chief executive of British Nuclear Fuels Ltd.

This was seen as a signal that the nuclear industry had given up any hopes of a renaissance, even though the government said it would revisit the issue in 2006.

The last few months has brought a spate of power outages which have concentrated politicians' minds across the developed world on the important role played by energy.

The British government has promised to reduce carbon emissions at a time when renewable energy such as wind is struggling to establish itself as a credible industry.

New research from the University of East Anglia sponsored by Powergen argues that the government must do much more if it is to meet its goals in reducing carbon emissions through energy efficiency.

"Lord Rooker's comments only make public what was obvious at the Labour party conference and elsewhere recently. The government is terrified of the lights going out.

"It's probably not going to happen this winter, but Tony Blair and others are looking beyond a successful next election," said one industry expert.

guardian.co.uk/nuclear

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APPENDIX 5 Ofgem consultation on grid reinforcement

UK: October 29, 2003

LONDON - British energy regulator Ofgem said this week it was looking at ways for network operators to finance the upgrade of the electricity grid to cope with more green power, a programme estimated to cost over a billion pounds by 2010.

In a consultation document, Ofgem said meeting the government's green energy targets may require significant investment which will have to be paid for ultimately by consumers. Wind farms, which will supply most of the green power, often have to be built in remote areas to avoid planning problems but these sites have poor grid links which will need to be upgraded. Many schemes are expected to be built in Scotland, far from centres of demand.

"We are seeking views on how to allow transmission companies to start efficiently investing in the transmission network," said Boaz Moselle, Ofgem's managing director of competition and trading arrangements. "We must make sure the investment is there to meet demand from renewable generators, but equally we do not want customers paying for wires where they are not needed." The government has a target of providing 10 percent of the UK's power from renewable sources by 2010, up from three percent today. Ofgem regulates the prices for the three operators in Britain - National Grid Transco (NGT.L: Quote, Profile, Research) , which owns the grid in England and Wales and two Scottish operators, Scottish Hydro Electric Transmission Limited and SP Transmission Limited. Ofgem said options included waiting until the next price control review, re-opening the price controls for all three companies or adjusting existing controls to cover with investment linked to renewable energy. The regulator has proposed extending the price controls for the Scottish companies by a year so they expire at the same time as the National Grid's in March 2006. A recent report commissioned by the government said it could cost as much as 1.12 billion pounds ($1.9 billion) by 2010 to upgrade the grid to cope with up to six gigawatts of wind power in England and Wales and two gigawatts in Scotland.

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APPENDIX 6 Times online October 30, 2003

Power chiefs warn that UK faces widespread blackouts By Angela Jameson, Industrial Correspondent THE UK faces widespread blackouts within four years unless the Government intervenes to encourage generators to build power stations.

Electricity shortages of the sort that hit California in 2000, causing prices in the state to double, could become a regular occurrence, according to Ian Russell, chief executive of ScottishPower, the energy group.

Mr Russell is one of several power chiefs who are predicting a crisis within the next few years as nuclear power stations and older coal-fired plants come to the end of their useful lives, just as green legislation is being introduced.

The boss of ScottishPower, which was operating in California during the state?s power crisis, added that he was not prepared to invest in building plants in Britain now because electricity prices were too low.

Mr Russell called on Stephen Timms, the Energy Minister, to reconsider the Department of Trade and Industry?s hard line against intervention in the electricity market, which was reformed just two years ago as part of a Labour manifesto commitment to deliver lower electricity prices.

?We need something to ensure there is enough generation over the long term,? Mr Russell said.

However, the industry is divided over the best way to handle the looming power crisis. ScottishPower and Powergen want the Government to provide incentives for generating companies to keep operating their least efficient plants.

They favour the reintroduction of a capacity payment, which would encourage power companies to make plants available to the National Grid. Such payments were scrapped with the demise of the old Electricity Pool in 2001.

Innogy favours a market-based approach. Andrew Duff, chief executive of RWE Innogy, said: ?We would not support any hasty decisions that undermine the market. Return to capacity payments is not the solution although we would support creating a market for reserve capacity.? French-owned EDF is also against a return to capacity payments.

DTI officials and Ofgem, the energy regulator, are believed to be sympathetic to market mechanisms but are against capacity payments. However, electricity industry experts say that any near miss this winter could cause Mr Timms to reconsider.

ScottishPower is concerned by the Large Combustion Plants Directive, which comes into force in 2007 and will lead to the phasing out of coal-fired stations. Under the new rules, the output from coal plants will be severely restricted unless generators fit expensive environmental equipment.

That could lead to a severe shortage of capacity, the generators fear. Andrew Wright, an analyst at UBS, confirmed that there were few signs that plants would be built until at least 2007.

The call for capacity payments comes as DTI ministers are braced for a testing winter, in which the electricity system will be pushed to its limits.

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APPENDIX 7 Selected fuel cell news and energy news.

1) Fuelcells selection for Oct 2003

L.A. Adds Fuel Cell to Power Grid. The City of Los Angeles added a FuelCell Energy 250-kilowatt Direct FuelCell(r) power plant its power grid that will operate with biogas fuel generated by the Terminal Island Treatment Plant in San Pedro. The fuel cell will produce enough power to serve about 250 households and uses up to 50 percent less fuel per kilowatt-hour than the average conventional power plant. http://biz.yahoo.com/bw/030919/195082_1.html

"Large Stationary Fuel Cell Markets Quantified," a new survey from Fuel Cell Today, analyses recent developments in large-scale stationary applications, including the rate of adoption, region of development and funding. It reveals that fuel cells in this field continue to advance as power sources at a wide range of sites including hospitals, hotels, waste-water treatment plants and schools. http://www.fuelcelltoday.com/surveys

Industry Analysis. "Fuel Cell Industry Competitive Analysis: Assessment of Major Players, Global Markets and Technologies," a new report from Allied Business Intelligence, provides an overview of fuel cell technology and markets with an emphasis in detailing the present efforts of key fuel cell players. The study provides growth projections by market through 2013, as well as potential revenues both in dollars and in unit shipments. http://www.abiresearch.com/reports/FCIP.html

UK Fuel Cell Vision Launched. The UK Fuel Cell Vision was be launched by the Department of Trade and Industry (DTI) to guide industry, academia and government on the way to developing a world-class fuel cell industry in the UK. http://www.dti.gov.uk

2) Extracts from News@All-Energy 20.10.03

"Now is the time to ensure adequate investment in energy efficiency, renewable sources and the UK energy infrastructure" says Dr Catherine Mitchell of Warwick Business School www.newsandevents.warwick.ac.uk/index.cfm?page=pressrelease&id=1362

The UK's Independent reports Uppsala University's findings that world oil and gas supplies are heading for a "production crunch" sometime between 2010 and 2020 because new forecasts show global reserves are 80 per cent smaller than previously estimated www.clean-vehicles.com/cgi-bin/cleanv/news/article.pl?file=03-10-09-worl d_oil_and_gas_running_out_mu.htm&edition=current&date=%0A09%20October%20 2003

The North East of England's growing reputation in new and renewable energy attracted a delegation from the Canadian Government led by the Minister of Energy and Mines for British Columbia www.onenortheast.co.uk/newscentre/#611

The Financial Times says the most original proposal for the Blue Circle Cement works is for part of it to become a renewable energy centre, exploiting wind, hydro, solar, biomass and geothermal sources http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullSto ry&c=StoryFT&cid=1059480567679

"Britain's green revolution is an experiment in power generation that will change the face of our most treasured landscapes, as the Government attempts to transform the way we shall get our electricity" www.guardian.co.uk/renewable/Story/0,2763,1056345,00.html

Jonathon Porritt blasted the Ministry of Defence over needlessly digging in its heels to block the vital development of offshore wind power, and he was critical of the Nimby attitude to windfarms by the general public www.manchesteronline.co.uk/business/general/stories/Detail_LinkStory=696 15.html

Extra funding for 12 renewable energy projects across the UK totalling £1.65 million was announced by Energy Minister Stephen Timms. The funding is part of the DTI's £20m major PV demonstration programme www.gnn.gov.uk/gnn/national.nsf/TI/D514E626D4F7B4D580256DA90047D3E8?open document

"Solar Thermal Strategy for Europe" was the first step in a dialogue between the industry and the EC aimed at the realisation of the large potential of renewable heating/cooling in Europe www.estif.org/index.php?id=46&backPID=2&pS=1&tt_news=12

One NorthEast, DEFRA and others are backing a project promoting energy crops and encouraging farmers to grow willow trees as a fuel source http://www.onenortheast.co.uk/page/newscentre/index.cfm#595

The world's largest biodiesel producing complex is to be built in Tees Valley, creating 75 direct new jobs. The £25m-complex will develop renewable/greener fuels from crops such as oil-seed-rape www.onenortheast.co.uk/newscentre/#601 A British technology innovation promises to boost the power available from fuel cells, and bring down the manufacturing costs. Power increases of 16 per cent have been achieved, and there's more to come www.morganfuelcell.com/article_default_view.fcm?articleid=2188&subsite=6 73

A Scottish business, GeoThermal, is aiming to follow Iceland in tapping the power of geothermal energy by installing the equipment at Eskmills in Musselburgh http://news.bbc.co.uk/1/hi/scotland/3116564.stm

Consultation document: Process for handling disputes under the SO-TO Code under BETTA 118/03 (go to BETTA General); Conclusion letter: Scotland-England Interconnector: Request for approval of reservation of capacity from 1 April 2003 119/03 (go to BETTA Scottish admin prices) www.ofgem.gov.uk. Ofgem/DTI conclusions and consultation on the text of a GB Grid Code and consultation on change coordination between the STC and user- facing industry codes can be found on the BETTA section of the Ofgem website www.ofgem.gov.uk/ofgem/work/index.jsp?section=/areasofwork/betta00 and more press releases at www.ofgem.gov.uk/ofgem/press/pressrelease-list.jsp

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-- Mike O'Carroll

 

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