The UK Climate Change Act & Its Implications For Energy Supply

By Paul Homewood

 

 

I have previously looked at the potential costs of the Climate Change Act, for instance here. But now I want to look at its potential impact on energy supply.

Let’s start with the basic targets that have been set for emissions reduction. The Act commits to reducing greenhouse gas emissions by 80% from 1990 levels, by 2050. Five Year Carbon Budgets are set to plan in more detail how this is to be achieved, and currently these are in force for up to 2027.

Although the First Budget for 2008-12 already shows a saving of 23%, most of this occurred long before the Act, partly because of a mass switch from coal to gas fired electricity during the 1990’s, and partly because of the decline of manufacturing in the UK. The Fourth Budget demands a further reduction of 35% from 2008-12 levels.

 

 

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/47614/3751-carbon-plan-executive-summary-dec-2011.pdf

 

In this post, I will be concentrating on electricity generation. I will be looking at the implications for heating and transport in a future post. Let’s then look at how the UK’s power is generated at the moment.

 

 

UK Electricity Generation – 2012

	TWh
Coal	143
Oil	4
Gas	100
Nuclear	71
Hydro	5
Wind	19
Solar	1
Bio	15
Others	5
Total	363

https://www.gov.uk/government/publications/electricity-section-5-energy-trends

It is worthwhile noting at this stage that, although CO2 emissions have been going down since 1990, electricity supply has been going up. Since 1990, demand for power has increased by 44 TWh, or 14%. All of the increase has been from domestic consumers, as the use of labour saving devices, computers and electronic equipment have soared. As population is forecast to increase substantially in coming decades, it seems highly unlikely that demand for electricity won’t continue to grow, despite government hopes for energy saving.

However, leaving this “little” problem aside, let’s look at how the power generation sector might look by 2030, based on government scenarios.

[A note here – the government have made clear that there are various scenarios, and they are not committed to any particular one. Therefore their, and my, numbers are by necessity ballpark. All my calculations, though, are based on the government’s own assumptions]

 

For the latest Fourth Carbon Budget, the government has set several targets of what needs to happen by 2027. There are also certain changes, which have already been set in motion. In summary:-

 

• Approximately half of the coal fired capacity will have closed by 2015, because of the Large Combustion Plants Directive. Given the governments’ stated objective of reducing emissions in 2023-27 period to 16% of 2009 levels, it seems highly unlikely there will be any scope for coal fired generation by 2027, (unless with CCS).
• The above also applies to oil.
• Out of the nine nuclear power stations currently operating, only one, Sizewell B, is scheduled to still be operational after 2030. The others are all due to shut by 2023, or earlier.
• The planned switch from conventional heating and transport, into “low carbon” alternatives,(i.e. electric cars, heat pumps etc) will significantly increase demand for electricity. The Committee on Climate Change estimates an increase of 30% between 2020 and 2030. This would imply an increase from 363 TWh to 472 TWh p.a.
• The demand for low carbon heat, in particular, will mainly impact at times of peak demand, i.e. winter months and daytime hours. By 2050, DECC have estimated we may need as much as double today’s electricity capacity to deal with peak demand.
• Government plans assume that Carbon Storage, CCS, could provide 10GW by 2030, about a quarter of current supply. However, the technology for this still has not got off the ground, and planned pilot projects have not yet materialised. It is therefore extremely unsafe to rely on this technology.
• Plans also assume that 15GW of nuclear capacity will come on stream, which represents about ten reactors. The government is currently in negotiations with EDF to build two of these, but these have been bogged down for sometime now. There is no guarantee that they will be successful, or whether the price will be affordable. Given the long lead time in building nuclear, it looks increasingly unlikely whether all ten reactors can be built, on satisfactory terms, in time for the Fourth Carbon Budget.
• Gas produces about half the CO2 as coal does, so currently contributes about 25% of emissions. The Carbon Plan aims for a reduction in emissions from total electricity generation of between 75% and 84%. In other words, based on the lower number, gas can continue to contribute its current level of 100TWh. On the higher target, it would need to be reduced to to 74TWh.

 

So, taking account of these factors, I have laid out below how the UK’s electricity supply arrangements might look by 2030. There are two scenarios:-

1) BEST –  based on the government’s key assumptions.

2) LIKELY – what I would regard as the most likely outcome, and certainly the only one that could safely be used for planning purposes.

 

Projected UK Electricity Generation  TWh – 2030

	BEST	LIKELY
Coal	0	0
Oil	0	0
Gas	100	100
Nuclear	131	50
Hydro	5	5
Bio	30	30
Others	5	5
CCS	80	0
Sub Total	351	190
Balance To Fill	121	282
TOTAL REQUIRED	472	472

 

So even under the best case, there is a hole of 121 TWh to fill, about a third of the electricity currently generated, and logically this can only come from wind/solar.

Solar can be ignored, as it makes such a small contribution currently, and simply is not reliable. But what about wind?

To produce 121 TWh from wind, even on the best scenario, would be a sixfold increase on current levels, an increase of 102 TWh. In the last three years, wind generation has increased by 3TWh per year, so at this rate, it would take 34 years to build up to 121 TWh. On the “most likely case”, we would need an extra 16TWh added each year, something that appears to be totally unrealistic.

Then, of course, there is the question of backup capacity. Wind often operates at less than 10% of it’s nameplate capacity, so, in practice, most of the 121 TWh, (or 282 TWh), will need to be matched by an equivalent amount of backup capacity. In other words, gas.

Unless we are prepared for the spare capacity on the grid to be cut to dangerous levels, there would need to be at least a doubling of gas capacity, all to be left idly spinning when the wind blows. And all of this assumes the best case.

Under the most likely scenario, we appear to be entering La La Land. Energy from wind would need to multiply 19-fold, and all in the space of 10 years or so. And to back it up, we would need to quadruple the current capacity of gas fired power stations.

Generators will not be prepared to put down this capacity without being generously paid for the privilege, and the Energy Bill includes provision for a Capacity Market mechanism, which will offer compensation to suppliers, to be paid for by consumers. Whether even that will be enough to procure the long term investment required remains doubtful.

Either way, consumers can look forward to massively increased bills and energy rationing.

 

 

References

1) Electricity Statistics from DECC

https://www.gov.uk/government/publications/electricity-section-5-energy-trends

 

2) The Carbon Plan

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/47614/3751-carbon-plan-executive-summary-dec-2011.pdf

 

3) Committee on Climate Change Executive Summary

http://archive.theccc.org.uk/aws2/4th%20Budget/4th-Budget_Exec%20Summary.pdf