Christopher Pincher is Member of Parliament for Tamworth. Follow Chris on Twitter.
This week power outages swept across northern India as three grids covering 20 states and 600 million people failed to cope with demand. Transport and water systems ground to a halt. Hospitals were plunged in darkness. Miners were trapped below ground. India, in a word, endured havoc. With a flick of a switch everything went off. The disruption to life, leisure and national output of the world’s second largest nation is massive. It is a sobering reminder to all in Britain concerned with our strategy to deliver cheap, clean and secure energy of what can go wrong if we fail to get our investment decisions right.
Traversing the tightrope of investment in our energy mix, and the signals made to the industry and its investors, requires careful balance. For many years the darling of the renewable sector has been on-shore wind; it is a mature, tested product, is developed at scale and has an established supply chain. In the past it has received clear support from the Treasury which must make difficult choices about the use of tax-payers’ money. Yet recently a more detailed critique (such as that provided by Dutch physicist Fred Udo) of on-shore wind has raised serious questions about its ability to generate the power we need when we need it, its green credentials and its value to the tax payer and to the consumer. This closer look has given the Treasury and many in the Department for Energy and Climate Change cause for pause.
Wind, naturally, is unpredictable. When it fails to blow other generator capacity, largely gas, must step into the gap left by the windmills and dial up to meet demand. The duplication of capacity is a known downside of wind. What is less understood is the impact this duplication has on our gas power stations. Gas fired generators are at their most efficient when they hum along at a constant, high rate of output, like a car on a motorway. Yet keeping them on standby to dial up then dial down at the caprice of the elements is akin to thraping your engine from a cold start. It is more inefficient and more wearing as it uses more fuel and reduces significantly the life-span of the gas generator. The overall impact of wind power in reducing CO2 emissions is much less striking than some would have us believe.
Of course, sweeteners paid to generators are not new nor are they exclusive to wind power. Tax payers support solar and nuclear too. Indeed, to paraphrase Jane Austen, it is a truth universally acknowledged that a single energy source in possession of a good investor, must be in want of a subsidy. However, I think we should take more pride in our domestic renewable industry and be a little more prejudiced in its favour. Our nascent marine sector (tidal stream) has the potential to supply up to 20% of our current electricity demand and is a more predictable source of energy than wind. The United Kingdom is the world leader in the development of tidal technology – the Energy & Climate Change Select Committee made this point in its report on the future of British marine renewables. And only this week Energy Minister Greg Barker extolled the exciting opportunities offered by marine technology in the pages of ConHome. If we are to achieve the goal of clean energy which does not require duplicated back-up and which develops home-grown products which can be sold around the world, we might pay less attention to turbines in the air and more to turbines under water.
Sensibly, the government is reasserting the balance in our renewable sector by reducing the level of subsidised support for on-shore wind by 10% until at least 2014. And it has pledged to re-assess industry costs for on-shore wind and will consider further changes beyond 2014. As the industry costs of this mature technology are falling continuously, I trust that ministers will reduce progressively the subsidy that developers receive so that the wind continues to blow in the direction of the consumer.
At the same time, we need to recognise other opportunities to develop clean energy. The shale gale raging across the United States has changed the energy game in North America. Shale now contributes one third of US gas supplies. And there is something like 37 trillion cubic metres of the stuff still recoverable – enough to meet current US demand for a century according to energy entrepreneur Robert Hefner III. As fracking technology pioneered by George Mitchell continues to develop (dry fracking is now being piloted by the US Department of Energy pathfinder ARPA-E), access to even greater reserves is on the cards. So can Britain do more than just cook on (imported) gas? The answer is yes. There are significant shale, coal bed methane and tight gas reserves in the Boland field in Lancashire not to mention plays across Northern Europe, Poland, Romania and Bulgaria. The exploitation of these reserves could reduce dependence on imports, especially imports into to Eastern Europe from petro-powers such as Russia that use their hydrocarbon assets as weapons as much as tradable commodities. They can also help clean up our carbon footprint. With the development of carbon capture & storage, which we must get off the drawing board, colourless gas can become green.
Allied to unconventional gas is the question of gas storage. The government is making the right moves but we do need to provide a substantial home for our gas whilst it waits to be used. Currently the United Kingdom imports 73% of the gas we burn from Norway. Yet as our demand increases and our domestic conventional reserves deplete, there is no guarantee that our needs will always be met largely by our friends. Faced with this scenario, storage becomes increasingly important. Right now we have storage capacity to meet about 19 days’ demand. Compare that with Germany whose annual gas demand is lower than ours but whose storage capacity exceeds 100 days. In fact, Britain has the highest annual gas demand in Western Europe (100 billion cubic metres) but the least stored reserves. We have committed to double our capacity (assuming all current plans are realised) but that will still mean that the United Kingdom’s total storage availability will be less than the increase in German capacity in the last three years. As energy security ticks up the global agenda and as our own security analysis sharpens in focus, the claims of the storage industry for closer attention will grow.
The point? As we consider more closely about our energy needs, and as the government draws together the strands of policy into a comprehensive approach, we should think beyond on-shore wind as the best and only means of developing a clean energy base. British marine technology and home-hewn shale deposits must be given greater emphasis in our supply mix. What is more our near and medium term reliance on gas must incorporate a strategy to expand gas storage which wins the confidence of the sector. And that is without mentioning the new nuclear programme which for now seems to be ”on a break.”
The opportunity to fashion and fix a comprehensive energy strategy fit for the new century has never been greater. The challenge of providing cheap power which is also clean power has never been so apparent. The risk to our energy security, and of the lights going out for trading partners on the continent, has never been so stark. Ministers are right to be brave. We must focus firmly on a truly diversified clean energy base, face down unreasonable Feed-In Tariffs and champion the consumer.