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UK ‘need not fear electricity blackouts’ says ex-National Grid boss–But it will cost you £3bn

January 30, 2017

By Paul Homewood

 

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http://www.bbc.co.uk/news/business-38791572

 

Roger Harrabin, who is apparently now an energy analyst as well as an environmental one, writes:

 

The UK has enough energy capacity to meet demand – even on the coldest days when demand is highest, says Steve Holliday, the man who ran National Grid for a decade.

He said news stories raising fears about blackouts should stop.

His optimism is based on the government’s latest auction of capacity for power generation, which starts later today.

Firms will bid for subsidies to provide back-up power when needed.

The stand-by plants will run for a few days a year during extreme conditions.

Much of the back-up will be provided by old gas and coal plants that would otherwise be scrapped. Funded by the bill-payer, they will offer a sort of power insurance policy.

Mr Holliday told BBC News: "It’s time for the headline of Blackout Britain to end – it’s simply wrong. We’ve been talking about blackouts for 15 years every time it gets cold, but it’s a scare story.

"The lights haven’t gone out yet and thanks to the measures the government is putting in place this week they definitely won’t go out in future. The UK has one of the most stable supplies of electricity in Europe."

Concern over price

The head of the Energy Intensive Users Group (EIUG), which represents companies that use a lot of energy, Jeremy Nicholson, has previously voiced fears about energy security but agrees the capacity auctions will secure supplies.

He told BBC News: "The power industry makes a lot of noise about tight generating margins but somehow manages to provide plenty of capacity when it’s needed.

"The capacity issue is sorted now – frankly it should have happened 5-10 years ago. Our bigger concern now is the possibility that when margins are tight, the price will shoot through the roof."

A spokesman for Energy UK, the body that represents power generators, was also confident about security of supply, saying: "We fully support the Capacity Market and we believe it will keep the lights on in Great Britain."

The capacity auctions were originally due to supply back-up from 2018, but the government brought the scheme forward to cover next winter.

Successful bidders in the auctions will receive a payment for keeping power stations available between November and February whether or not they are generating.

Flexible electricity

Coal, gas and nuclear stations can bid for the availability payment, along with demand reduction suppliers and interconnectors. National Grid juggles what’s needed and when.

The capacity auction is expected to cost £2-3bn a year.

A government spokesman said securing capacity to back up intermittent forms of energy like solar and wind might cost about £7 per year per household at first, shrinking to £2 over the long term. He said power shortages resulting in price spikes would be much more expensive.

Generating margins were forecast to be tight for this winter, but there has been no problem, despite a long cold windless spell during which wind energy has produced around 1% of electricity demand. The highest daily percentage of wind power was over 20%.

 

Mr Holliday, who was chief executive of National Grid until July 2016, forecasts that all future talk of blackouts will be made redundant by a revolution in flexible electricity, with customers using power when it is cheapest.

One current weapon at National Grid’s disposal is a contract for flexible supply with firms which don’t manufacture continuously.

The firms get compensated if they are asked to stop consuming power for a while during, say, a windless spell.

Stories in the media have reported this as risky for UK Plc. But the EIUG disagrees.

Mr Nicholson told BBC News: "Clearly firms can benefit from being incentivised to turn down their energy use if it doesn’t affect their production. Firms needing continuous production don’t turn off their power."

http://www.bbc.co.uk/news/business-38791572

 

As usual, Harrabin misses the point. The only way we can keep the lights on is to keep our good old fossil fuel plants on standby, something that even he admits will cost £2 to 3bn a year.

He says this equates to £7 per household, but I suggest he buys a new calculator. Based on about 27 million households in the UK, the total cost works out at £74 to £111 each.

Much of this will feed through as higher prices of goods and services, taxation and fares. But even the direct cost on electricity bills would be about £30.

 

If we take the Capacity Market auction for 2020/21 for instance, we can see that 71% of the capacity will be provided by CCGT, coal/biomass, hydro and nuclear, nearly all of which is existing plant.

 

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https://www.emrdeliverybody.com/cm/home.aspx

 

Perhaps he might explain what will happen when we have shut down all of the gas and coal capacity under decarbonisation plans? No amount of “smart energy” will resolve that conundrum.

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28 Comments
  1. AlecM permalink
    January 30, 2017 11:27 am

    This sounds to me as a putative attempt to doge the blame for te power cuts when we get the really cold weather in a week or so.

    Put the guy on the Corporate Manslaughter charge list.

  2. January 30, 2017 11:27 am

    As I posted on the previous thread, Cardinal Harrabin on the BBC News had the gall to claim that wind power was “virtually free”. Talk about propaganda or as the BBC would put it:
    – Fracking is hugely controversial.
    – Wind power is virtually free.
    With the BBC the main source of information, it’s no wonder the general public seem to love wind power and to hate shale gas.

    • January 30, 2017 2:42 pm

      Depends on what one means by “virtually”. What wind is is a great source of extra income for politicians as they make sure the useless wind companies get contracts. Of course, the politicians are never affected by their choices—only the poor and voiceless are.

  3. A C Osborn permalink
    January 30, 2017 11:29 am

    Here is a novel thought.
    If as the promoters of wind & solar insist that they are free, why are we paying exorbitant prices for them.
    Only the original outlay & maintenance should be paid for, with something like a 10% profit built in, spread over the suggested life time of the equipment.
    No need for any subsidies.

    Except as we all know backup is issential and they could not actually exist without subsidies.

  4. Harry Passfield permalink
    January 30, 2017 11:56 am

    From Wiki: “Holliday viewed the concept of baseload as “outdated”, as microgrids would become the primary means of production, and large powerplants relegated to supply the remainder”

    Seems there’s no democracy in the most important utility there is. And now that Holliday has persuaded the PTB to go for his idiotic microgrid concept, he’s off to pastures new. I wonder where he will turn up next…as chairman of one of the companies paid handsomely for stand-by contingency?

    BTW, On R4 TODAY I thought I caught mention of the fact that he was something to do with Dick Black’s new institute (EIU??)…..could be wrong.

  5. Ian permalink
    January 30, 2017 11:56 am

    What I’d like to know is whether the cost/household includes the predicted £1billion bill for RHI, the £268m wasted on sequestration projects, the £who-knows-how-many-billion wasted on smart meters, the £18billion on the unworkable Cardiff Bay scheme, and so on, just to name a few recent;y-exposed scandals.

    They also failed to mention the increase in CO2 emissions resulting from their emergency actions.

  6. spetzer86 permalink
    January 30, 2017 12:27 pm

    After sitting silent for the better part of a year, how many of these “older” facilities will fire up properly or will they continue sitting silently waiting for an obscure part?

    • ghostwhowalksnz permalink
      January 31, 2017 8:31 pm

      Ask South Australia how their backup plan worked.

  7. January 30, 2017 12:42 pm

    Since when were interconnectors classed as firm capacity, and when did nameplate capacity become guaranteed capacity? 52.4 GW of nameplate capacity (including interconnectors) could easily provide a lot less than 50 GW, given the inevitable breakdowns and continental supply shortages.

    The National Grid’s assumption for wind contributions to peak demand are wrong, they (unlike their Eirgrid neighbours) seem unaware of the 98% rule: at some times in a winter, conventional sources will be required to provide around 98% of the peak demand in that winter:

    https://climanrecon.wordpress.com/2016/11/19/the-98-demand-rule-in-gb-and-ireland/

  8. January 30, 2017 1:22 pm

    Reblogged this on Tallbloke's Talkshop and commented:
    It’s OK ‘says ex-National Grid boss’. Well, let’s hear that from the current boss, and if it turns out he’s wrong he can be the next ex-boss.

  9. January 30, 2017 1:53 pm

    Has anyone asked under the Freedom of Information Act what the total cost of the Climate Change Act has been to date?
    What needs to be known is: Total subsidies paid to date, Current total rate of payment per annum, projected rate of payments in the future. Preferably split in terms capital (grants) and revenue.
    Obviously the questions need to be carefully worded to avoid wriggle responses.

    • January 30, 2017 2:45 pm

      I believe that would be futile. Even President Trump can’t get a breakdown of where money is spent and who works in what job. A FOIA request would be laughed off.

  10. Gerry, England permalink
    January 30, 2017 1:55 pm

    I note the use of the word ‘yet’ as regards blackouts. Each year the margin has been getting tighter but with more coal due to go and presumably flattened at lightning speed like Didcot to prevent reuse, where is this back up coming from?

    This also supposes that generators receive subsidies that make it economic for them to keep plants gathering dust for at least 9 months of the year.

    And we see the plan to make use tied to cost mentioned – ‘smart’ meters. The cost of which Ofgem has said is not a tax but an operating cost that can’t be included in price rises by the Big Six.

    Still, if we end up with May’s ‘just walk away’ Brexit, the economic crash will be so great there will be loads of spare capacity, if anyone has the money to pay for it.

    • January 30, 2017 5:59 pm

      ‘where is this back up coming from?’ – this is the wrong question.

      The right question nowadays is – ‘what’s the best way to choke off demand at peak times’?

  11. January 30, 2017 2:10 pm

    Same story different spin.
    “Old coal, gas and nuclear power stations are to receive subsidy contracts worth hundreds of millions of pounds this week, under government plans to ensure the lights stay on next winter.

    The subsidies, which will be levied on energy bills, are to be awarded through the “capacity market” to companies that can guarantee their plants will be available when needed on winter weekday evenings. Analysts estimate that the scheme could cost from £650 million to £1.5 billion, leading to questions about whether it is value for money.”
    http://www.thetimes.co.uk/article/old-power-plants-in-line-for-millions-in-subsidies-nstpqhcpd
    Emily Gosden @emilygosden
    Energy editor for The Times. Previously at the Telegraph. emily.gosden@thetimes.co.uk

    • January 30, 2017 5:08 pm

      4 Feb 2016 – Steve Holliday will become the lead non-executive at the Department for the Environment, Food and Rural Affairs

      and From
      http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/8012144/Power-man-caught-between-Ofgem-and-investors.html
      ” his US business which has been caught up in an expenses row. It allowed the transatlantic shipping”

      He said “We need to balance demand for energy with supply. That gets into smart metering so if we need to interrupt power supply for a few hours during the day when you’re not at home that’s okay.”

      • January 30, 2017 6:35 pm

        Not OK if you’re retired and at home nearly every day.

      • Gerry, England permalink
        January 30, 2017 8:56 pm

        Has he not heard of working from home either?

      • John Palmer permalink
        January 31, 2017 6:37 pm

        There you have it. Don’t allow a ‘Smart Meter’ anywhere near your house.
        The only realistic way that they can do these ‘few hours a day cuts when it doesn’t matter’ is via the bureaucrats pal, the Smart Meter.
        Our BG Service guy the other day said – after I’d refused one, ‘you must have one soon, it’s the law.
        My reply contained two LL’s and one X (at least, I think that’s how you spell it)
        He left immediately.

  12. Wellers permalink
    January 30, 2017 2:11 pm

    Steve Holliday used to be a manager at Esso’s Fawley Refinery in the 1980s. He had something of a reputation for being an ace bull****ter – plenty of words, but little of substance. I would have liked to have heard contrasting viewpoints from experts in the field such as Professor Dieter Helm, Peter Atherton (formerly of National Grid) or Fritz Varenholt. But this balance-free BBC piece comes from their puppet master in chief Roger Harrabin of course, so we can forget about hearing anything that complies with the BBC’s charter.

    • John Palmer permalink
      January 31, 2017 9:36 am

      Any money on when the ‘gong’ arrives?

  13. January 30, 2017 3:26 pm

    Euan Mearns has a good article on why we should fear the outcome of all this renewable electricity. http://euanmearns.com/green-mythology-adding-different-types-of-renewables-smooths-output/#comment-26421

  14. Brian Vaux permalink
    January 30, 2017 4:34 pm

    The item that followed R.H.’s announcement that all will now be well in the world was on ‘Fake News’. This must have been coincidental or was it?

  15. Athelstan permalink
    January 30, 2017 6:06 pm

    Said Paul:

    UK ‘need not fear electricity blackouts’ says ex-National Grid boss–But it will cost you £3bn

    And the rest mate.

    There is some pretty malevolent sleight going on here, not only are Harrabin and Holiday doctoring butchering and hacking to bits – the truth but the subtext is even more sinister…
    Though, what Holiday and Harrabin so adroitly missed out, yeah “cheap” electricity will be available……………hmm er well actually “cheap” is a relative term, innit? OK, it’s cheap if you can afford it and a tariff system with smart meters will mean you can and will be rationed to using lecky at night on a Saturday/Sunday morn. The Sky is the LIMIT!! and they will be able to do as they please, even pay per view TV will include the cost of the electricity and only tickets via some firm cowboys selling secondary tickets at 20-100xs the face value – but hey that’s how it works these days – sonny! Evidently, we are on the brink of a major breakdown in supply and this is just the start – “micro grids” my arse.

    To be frank, UK energy policy, the grid………….really I often wonder how it has all held together thus far, that egregious clown Holiday is just getting in his excuses in and washing his hands with a very unhelpful sound bite or two………… before it all goes tits up.

  16. Malcolm permalink
    January 31, 2017 8:56 am

    Paul, I have never heard your name mentioned on any BBC feed. If it is that you cannot muscle your way in to the Harrabin falsification then despite all your research and undoubted intellect your efforts will only reflect the lost tribe of deniers, their strange rites and beliefs. You have to find some pretext or other to ingratiate your views upon the national media otherwise all this is just a conversation amongst the like minded, partisan and largely irrelevant.

    • Athelstan permalink
      January 31, 2017 10:20 am

      Thanks Malc’ that was very helpful, now do run along and btw – you…..in you infinite wisdom do drift over here to….

      “reflect the lost tribe of deniers, their strange rites and beliefs”

      It seems clear then, that among the most holier than even thou – deigning to educate themselves….mmm if it were at all possible! Those idiots like Harrabin, even the Wet Office archpriests of green do read this ere blog, now I ever so politely do suggest that, you stick that up your umfrau and wobble to wax long on it.

    • January 31, 2017 10:26 am

      I think not.
      One day soon, the lights WILL go out, that is just a rather obvious consequence of “Their” actions.
      At this point the Politicians will fill their pants and say it’s not their fault, honest.
      People will look around for a reason, and sites like this will simple point out the facts, no politics involved, no lobbying, no integration with the MSM.
      Their castles are built on sand, they will not prevail.

      RS

    • Gerry, England permalink
      January 31, 2017 1:58 pm

      BBC policy decided at the 28Gate meeting is to preach global warming and ignore anything to the contrary. There is no chance of Paul getting a look in. The few chinks of light in the legacy media help such as Booker, Rose and Delingpole but you are up against a wall of denial of the truth. Bitter experience is the only way they will understand – the same as the arrival of the grid blackouts.

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