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Jillian Ambrose Shows Her Ignorance About Micro Gas Plants

May 9, 2018
tags: ,

By Paul Homewood

 

Jillian Ambrose embarrasses herself with her obvious lack of understanding of the energy sector one again:

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Some of the UK’s biggest banks have agreed to invest £100m in a fleet of eleven micro gas-fired power plants across England to offer the national grid fast-starting power options.

Lloyd’s commercial banking division, HSBC and NIBC have agreed to finance Green Frog Power’s plans for 220MW of gas-fired power capacity across sites from Plymouth to Newcastle.

The £100m loan could be stretched by a further £50m to allow Green Frog to build another 110MW worth of gas-fired power in the next few years.

Together the flurry of small gas plants represent the equivalent of one large gas-fired power unit, which could compete for contracts with National Grid to help balance the energy system as old coal-plants are shut down.

https://www.telegraph.co.uk/business/2018/05/06/banks-plough-100m-micro-gas-power-plants/

In fact, small gas plants have long been an essential part of the UK electricity sector. They are generically known as “small scale peakers”.  (Note for Jillian – the clue is in the name).

Peakers have the advantage of flexibility and low capital costs per unit (but not though per MW). They, however, have the disadvantage of being much more expensive to run than large CCGT plants.

The chart from BEIS’ Electricity Generation Costs report from 2016 shows just how expensive they actually are:

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https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/566567/BEIS_Electricity_Generation_Cost_Report.pdf

 

Focussing on small OCGT and and 1200 MW CCGT:

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Capital and fixed costs per MWh are much higher for OCGT, simply because the figures are based a load factor of 6%. This reflects the fact that they are not designed to provide regular, large amounts of power, but instead simply help to top up the grid at times of peak demand.

Significantly though, fuel costs are also much higher for OCGTs, as they are much less efficient generators. At £52/MWh for fuel alone, they would not be able to run economically during most of the year when the market price is less.

Energy Consultants, Timera Energy, noted in a report on peakers last year:

A major transformation is underway in European power markets. Ageing coal, gas and nuclear plants are retiring and being replaced to a significant extent by renewable capacity. Loss of existing flexible plants and the inherent intermittency of wind and solar output is driving a requirement for substantial investment in new flexibility.

Investment in flexible thermal capacity over the last 3 decades has been dominated by large grid connected CCGTs. But investment in distribution connected peakers has surged over the last 3 years, particularly as a source of new capacity in the UK power market (with 3.5GW successful in UK capacity auctions to date).

Peaker investment is now focused on gas-fired technologies, particularly distribution connected reciprocating engines. These units represent a relatively cheap source of low load factor flexibility. However there are a number of different types of technology in play and an important trade-off between cost & efficiency.

Gas engines have a capital cost advantage over CCGTs (400-450 $/kW vs 650-700 $/kW). Fixed costs of CCGTs (around 25 $/kW) can be more than 50% higher than those of gas engines. Engines are significantly more flexible than CCGTs and have lower start costs. Peaker economic lives are also shorter than for CCGTs (e.g. 15 vs 25 years) which reduces the risk of assets becoming uneconomic or stranded in later life.

https://www.timera-energy.com/investment-in-flexibility-gas-peakers/

 

Small scale gas plants can only be viable by qualifying for capacity market payments, which essentially cover all of their fixed and capital costs.

 

As Timera noted in another post on the latest Capacity Market auction earlier this year, peakers can only afford to run at times of peak prices:

The replacement of mid-merit with peaking plants, accelerates a trend established in the previous three auctions.  While it fulfils the government’s goals in a capacity accounting sense, it will have some important implications for wholesale market pricing dynamics.

Changing stack shape is set to support super peak prices.  The removal of coal units means prices will more often need to rise to bring on gas engines during periods of high net system demand. 

https://www.timera-energy.com/implications-of-uk-capacity-auction-results/

 

Indeed, as Timera also explain, most of the profit for peakers arises from hedging operations (see here). In essence, bets or hedges are made on future prices. If prices are higher, operators take the profit margin. If prices are lower, they take the hedge. (The actual market is much more complex than I can explain here, as the Timera piece details).

 

But going back to Ambrose’s article, there is no possibility of peakers replacing the need for large gas plants, which she implies. You might just as well argue that diesel engines could replace Hinkley Point.

Given the intermittency of renewable energy, there will still be a need for large amounts of reliable and flexible baseload capacity, which small gas plants are not capable of supplying. They certainly won’t do anything to balance the energy system as old coal-plants are shut down, as she claims.

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32 Comments
  1. waterside4 permalink
    May 9, 2018 1:16 pm

    Like when most town’s had their own little gas works bobbing up and down as demand fluctuated?

  2. May 9, 2018 1:54 pm

    “Jillian Ambrose Shows Her Ignorance About Micro Gas Plants.” From what I have learned about Ms. Ambrose though this blog, I would say you could put a period after “Ignorance.”

  3. Harry Passfield permalink
    May 9, 2018 2:08 pm

    I bet she’s shilling for Claire Perry. Protecting her patron by taking any flak for a half-baked idea.

  4. Jack Broughton permalink
    May 9, 2018 2:13 pm

    Firstly, these are by no means micro-turbines (micro-turbines are usually well below 1 MW each);these are probably be aero-derived gas turbines, such as the RR range, up to 80 MWe / unit . The aero-derived units are actually pretty efficient, well in the 40s anyway in simple cycle mode and can give full load from cold in minutes. The sales pitch for gas engines is a bit dubious as gas engines are far smaller and less efficient (a few MW each usually) and need far more maintenance.

    Most power stations have gas turbines for “black-start” use but these were virtually never used, because of the prohibitive fuel related costs. Money doesn’t matter when one is saving the world from toxic CO2 though, and one is happy to destroy UK industry.

  5. Athelstan permalink
    May 9, 2018 3:12 pm

    Aye and all of this to fix a problem we didn’t have in the first place to cure a non existent, the mythological alarmunist chimera.

    total bolloks – it’s all governmentally inspired nonsense and of course which is, draining the life blood (via taxes and consumer imposition of high energy tariffs) of the economy,

    Indeed, fuckwitted doesn’t quite cut it – does it? Suffice to say it but Gilly (like Loulou before her and potatoED, RED ED, Buffhuhne, Amber Crudd, now that FoE loony claire perry will never get it, an industry WHOLLY reliant on public subsidy only – is a suicidal drag on the economy. why can’t they all get it through their thick skulls, the ‘green agenda’ it drags the whole shebang down?

    Some years ago, it was calculated that, in Spain for every ‘green job’ created, by a ratio of 1:3 – yes the equivalent of THREE jobs were lost in the real economy.

    Are we mental, our government is and most of you must be if you continue to vote liblavtory.

    • Harry Passfield permalink
      May 9, 2018 6:45 pm

      One of you better posts, Athelstan (they are all very readable) and I just wish the loonies in BEIS – especially the IQ-lite Perry – could read, and even, understand what it is they are doing that is so wrong.
      In passing, I actually had someone tell my wife that they had a SmartMeter installed and it was the best thing they’d ever done: saved them loads of money on their bills because now they could see where they were wasting money/power. Gullible idiots!

      • Athelstan permalink
        May 9, 2018 11:58 pm

        Indeed we are all metered, if you require to check your usage, what’s stopping you – you don’t need a ‘smart’ meter.

        Perry is one of those ‘know it all lasses’ who is a confusion of puddlement, her level is a tad below the teacake lady, but in today’s society she is rated as ‘clever’, may the Lord preserve us from busybody know-nowts with bonnets a buzzing with imaginery bees.

        Where did all the engineers go to?

      • Gerry, England permalink
        May 10, 2018 12:46 pm

        It may take a bit of time to write the spreadsheet but once done, entering weekly gas and electricity readings just takes a few minutes on a Saturday morning over tea and toast. And it makes it easy to get quotes as I always know my last 12 months usage.

  6. May 9, 2018 4:05 pm

    Paul: There’s more from Silly Jillie in today’s Telegraph. Two big troughers, Mark Sharrock, the boss of Tidal Lagoon Power and Dale Vince, the boss of Ecotricity, are fighting over who should get big consumer subsidies for their mad schemes. Of course Jillie does not mention all the intermittency problems, environmental damage and costs to consumers associated with tidal lagoons.
    https://www.telegraph.co.uk/business/2018/05/08/row-swansea-tidal-power-plans-set-reignite/

    • Jack Broughton permalink
      May 9, 2018 6:10 pm

      Is it not tragic that no reporter (apart from Booker of course) ever criticises these mad-schemes. The Greenies certainly have almost complete control over the media, and it is almost impossible to even get letters published that criticise the green establishment.

      • Harry Passfield permalink
        May 9, 2018 6:51 pm

        …or get them read by Minsters in the control of the Blob. We need to drain the Green swamp.

      • Athelstan permalink
        May 10, 2018 12:03 am

        Soon, it’s coming we won’t be able to make critcism, even if it is valid, measured and relevant, TPTB they don’t want you, me to make public to know that, all their mad schemes are worse than useless……oops sorry ‘the ruinable industry/green agenda’ that’s why they were so designed and they certainly don’t want that pointing out.

        As I’ve said elsewhere the preferred model is the PRC, no questions later and a time in the cooler if you continue.

    • Gerry, England permalink
      May 10, 2018 12:48 pm

      I was really disappointed Vince’s team Forest Green Rovers didn’t get relegated from the football league.

  7. Joe Public permalink
    May 9, 2018 8:39 pm

    “Significantly though, fuel costs are also much higher for OCGTs, as they are much less efficient generators.”

    The major difference in fuel costs isn’t so much because they are less efficient, but because they are much smaller annual load, and more importantly, because they have an atrocious (gas) load factor that is for the most part concurrent with gas’s annual peak demand.

    • Athelstan permalink
      May 10, 2018 12:08 am

      x 1000 – my thoughts entirely.

  8. Bruce of Newcastle permalink
    May 9, 2018 10:52 pm

    The problem of course with micro gas plants, and any gas plants be they OCGTs or CCGTs, is you have to have gas to put in them. Which isn’t much addressed by the climatistas.

    I saw this article a couple days ago – it illuminates the issue quite well.

    Why Russian Gas Is Critical For The UK (8 May)

    The article is pro-Russian, but shows quite well how the EU and the UK is captured by Russian gas politics. And if pipeline gas falls short the swing source for imported LNG appears from the article to be Russia’s Yamal LNG.

    Even then should the UK wish to import LNG from a non-Russian source the biggest alternative is Qatar – which is closely linked to Iran via their shared and vulnerable gas fields in the Gulf. And as we know Iran is allied to Russia in the Syrian mess.

    I wonder what would happen if political shenanigans cause a global crisis?

    • Athelstan permalink
      May 10, 2018 12:07 am

      “I wonder what would happen if political shenanigans cause a global crisis?”

      I hate to say it – really I do, the world is a bad enough place as it is, we all have our own ills and life can be so harsh and unforgiving.

      But in ref’ to your (above) quote, I’ve a very bad feeling that, we won’t have to wait too long to find out.

      • RogerJC permalink
        May 10, 2018 2:33 pm

        You have started me thinking about the UK in about 2050 when the ICE is banned and we have a spot of “bother”. How will the Army move it’s troops? Electric Trucks and Electric Tanks with long trailing leads for when they run out of power? Electric Planes? Electric Warships? The more you think about it the dafter it becomes.

  9. Geoff Sherrington permalink
    May 10, 2018 3:01 am

    Are these tiny units considered acceptable by the pc crowd, over a single large unit, because of a promise that they are only for the transition period to all renewable, after which they can be packed up and sold to poor nations? Geoff.

  10. malcolm bell permalink
    May 10, 2018 7:18 am

    Yes, good in principle, anything to keep the lights on. But, must be followed through with atomic ones.

    Critically however is that they must be made in the UK not imported from EU or far east. The money and jobs must stay in the UK.

  11. mikewaite permalink
    May 10, 2018 6:48 pm

    Just noticed this from “pat” at Jonova – truly frightening:

    -“Britain lobbies for right to host 2020 climate meeting
    Financial Times 9 May 2018
    Theresa May’s government is lobbying for the right to host a crucial climate meeting in 2020, in a sign of the prime minister’s determination to highlight the Conservative party’s green credentials. Claire Perry, the energy minister, said on Wednesday that the UK planned to put its name in the ring for the UN’s main annual climate change conference in 2020…”-

    • May 10, 2018 9:14 pm

      Oh just wonderful, can’t wait…..

  12. Graeme No.3 permalink
    May 11, 2018 4:07 am

    Is Jillian Ambrose a micro gas plant?

    Paul, have you considered bundling copies of your articles about Jillian the Unready and despatching them to the Editor at The Telegraph? Or possibly just the headlines if you tink he won’t read much.

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