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Gas Fired Power Stations In Crisis

October 15, 2015

By Paul Homewood 

 

 

 

Gas fired power generation is facing economic pressures in the UK, as well as across much of Europe. In part, this is due to competition from cheaper coal, but probably most of the problems come from competition with subsidised renewables.

In particular, this has the effect of reducing utilisation of gas plants. A look at the DECC statistics shows just how severe this problem has become.

 

 

Capacity of gas fired power stations has changed little since 2010, still standing at just under 32 GW. Over the same period, however, output has shrunk from 161 to 88 TWh. This translates to a fall in capacity utilisation from 58% to 31%. (Based on CCGT major producers).  

 

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These numbers, of course, cover a wide variety of individual circumstances. Some plants may be operating at much higher utilisation, perhaps because they are more efficient, but also I suspect because they are old with low capital costs to cover. At the other extreme, some plants may be mothballed, or only switched on in winter months.

There has been a slight rise in utilisation since 2012, but this is solely because 1.2 GW of capacity has been taken out.

All in all though, it is a far from healthy position for the gas fired sector to find itself in. 

 

Currently, the UK has total generating capacity of 82 GW, though some of this may be mothballed, or planned for closure in the near future. Realistically, the UK probably needs at least 70 GW of high quality and reliable capacity.

As the chart below shows, 73% of capacity comes from fossil fuels.

 

 

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More to the point though, wind and solar cannot be provide dispatchable capacity, ie power that can be provided at the request of the grid. Excluding these, we find that we are left with only 77 GW.

With coal capacity in rapid decline, and suggestions that it will be totally phased out within the next decade, we clearly need to not only keep the existing gas capacity, but to virtually double it.

But who is going to build new capacity just to see it sit around idle for most of the time?

 

 

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Sources

https://www.gov.uk/government/statistics/electricity-chapter-5-digest-of-united-kingdom-energy-statistics-dukes

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

11 Comments
  1. Joe Public permalink
    October 15, 2015 4:30 pm

    Why ‘waste’ a premium fuel by burning it to make electricity, when it can be utilised in homes, factories & elsewhere for its heat content at at least 30% greater efficiency, and so reducing its CO2 emissions by 30% per kWh of useful heat.

  2. Graeme No.3 permalink
    October 15, 2015 5:53 pm

    The problem is the variability of supply by wind. When there is plenty it is “dumped” onto the grid and something has to be shut down, usually gas as it is more costly than coal. The fixed costs of gas operation are now spread over less MWh so the cost goes up.

    As the amount of wind capacity increases the problem gets worse, as in Germany where new gas plants are being dismantled and moved to other countries, and some coal fired stations are being run at a loss. So no conventional method, coal, gas or nuclear can survive the ravages of wind madness, but have to be kept going because renewables can’t be relied on.

    The greens are delighted, forcing the cost of conventional generation up makes renewables look less costly. The public faced with ever rising bills may not be so happy. We should change the name from “renewables” to “costly un-reliables”.

  3. October 15, 2015 6:07 pm

    One solution would be to pay the full cost of construction up-front, then separately pay for operation, maintenance and fuel.

    If “green” political parties want gas power station workers to be paid to do nothing, so that renewables are used instead (pushing up electricity bills) then no doubt most of the electorate would take appropriate action.

  4. October 15, 2015 6:10 pm

    When we’ve had Miliband, Huhne and Davey in charge for many years (and about 12 equally incompetent Labour ministers in the 12 years before Miliband), this comes as no surprise to anybody who understands power generation. Only UKIP seems to have understood that this was bound to be the outcome of successive Government policy of subsidising unreliables.

  5. A C Osborn permalink
    October 15, 2015 6:15 pm

    The quickest way to bring reality to both the government and the public is to close all of the Coal Plants and half of the Gas Plants for “long term maintenance”.
    They will soon see how useless their precious “Windmills” & Solar energy are.
    What a total waste of tax payers money.

    • October 16, 2015 3:56 pm

      Agreed. I have long advocated the power suppliers to simply cut off coal and gas produced electricity now. Why wait until the plants are closed? The greens think renewables are a perfect solution, so let’s start now. Shut down 90% of electrical generation and throw up more of the bird cuisinarts and fryers. It shouldn’t be a problem, should it?

  6. S Allnutt permalink
    October 15, 2015 6:26 pm

    Gas fired generation has the highest thermal efficiency since it is burnt directly in the turbine rather than being used to make steam, although the exhaust gases can be used for that as well. It is the cheapest to build and the fastest to start. Only the madness of the green lobby is holding it back.

  7. October 15, 2015 7:20 pm

    Thanks, Paul. Good to look to look at data.
    I wonder what other “unintended” consequences there might be from the “green” madness?
    One is clear to me: No research on natural causes for climate change.

  8. rwoollaston permalink
    October 15, 2015 7:35 pm

    It’s ironic that the one power source that can easily provide flexible baseload capacity to accommodate the variability in solar and wind sources – gas turbine plants – are made uneconomic by the same policy framework that has encouraged renewable sources.

  9. John Peter permalink
    October 15, 2015 8:13 pm

    Don’t forget that the Tories are no better than Miliband/Davey and Huhne. Cameron & Osborne could change this at a stroke and ban any further installation of wind/solar and ensure we had at least 10Gw of excess capacity. I would have thought that if they wanted to they could simply ignore EU and have whatever gas/coal capacity they require to keep the lights on at the lowest cost. They don’t have the guts. Who will get the blame when the lights go our? The current government surely. Add UK government control over energy to the EU negotiations demand and the Poles will support us.

  10. October 16, 2015 9:21 am

    They admit the sole purpose of new gas plants is to be switched on and off at peak/non-peak times.

    ‘Both sites will operate as ‘peaking’ plants; providing electricity when there is a surge in demand, or where there is a sudden drop in power being generated from other power plants.’
    http://www.gov.uk/government/news/two-new-gas-power-stations-given-green-light

    Then they wonder why investors say ‘no thanks’, walk away, and the plants never get built.

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