The latest official estimates show that Britain will not face power cuts or gas shortages in the near future but concerns remain in the longer term.
In particular, the Government has admitted that the timetable for replacement nuclear capacity has slipped.
It is now estimating that new plant won't come online until "around 2025", following the electricity market reforms.
Only two years ago, 2020 was the official estimate.
The revelation comes in the latest Statutory Security of Supply Report (SSSR), published today by Energy Minister Charles Hendry, which has been produced jointly with Ofgem with input from National Grid.
The schedule slippage is in line with recent pull-outs by some nuclear power developers following events in Fukushima, and delays in construction of Areva's plant in Finland, the completion of which was put further back yesterday to 2014.
This Olkiluoto plant, which is of the European Pressurised Reactor type expected to be built in the UK, is now five years behind its original schedule.
Any new nuclear plant therefore could also not help the UK to meet its 2020 target for carbon emission reductions.
The Report reaffirms Ofgem's estimate last year that together the gas and electricity markets need £200 billion of investment between now and 2020 to meet the challenge of keeping the lights on while reducing emissions.
Electricity
The Report quotes National Grid projections that peak electricity demand will remain relatively stable at around 60 gigawatts (GW), although there is "a range of sensitivities around this central case".
How does this pan out? At the end of 2010, the UK as a whole had a total of 90.2 GW of electricity generating capacity of various kinds. This breaks down to:
Coal: 26%
Oil: 4%
Other Conventional Steam: 11%
Gas: 38%
Nuclear: 12%
Hydro Natural Flow: 2%
Hydro Pumped Storage: 3%
Wind: 3%
Other Renewables: 2%
About a third of generated electricity is lost in transmission, so the balance of generation capacity and supply is adequate but vulnerable to situations were a lot of capacity might be offline at once.
(It's worth putting this in context, and remembering that electricity is only 17.5% of the UK's total final consumption by fuel.)
However, the Large Combustion Plant Directive will lead to closure of around 12 GW of coal and oil-fired generation by the end of 2015 at the latest.
The Industrial Emissions Directive could also lead to further closures by 2023.
In addition, according to current timetables, up to 7.1 GW of existing nuclear generating capacity is reaching the end of its operational life and will have closed by 2020.
This means that a total of 19.1 GW of generation capacity could be lost by 2020, with further closures by 2023.
Meeting the gap
Where will the required capacity come from? The answer given in the Report is: from gas and renewables in about equal measure.
The Security of Supply Report says that in addition to the 7.3GW of renewables projects that will connect to the National Grid that are either under construction or consented, there is a further 5.7 GW of projects that have submitted planning applications.
These are predominantly offshore and onshore wind and biomass generation projects, with the majority of the capacity being over 50 MW.
That totals 13GW.
Furthermore, 4.3 GW of new gas-fired plant is already being built, and a further 8.7 GW has planning permission, also totalling 13 GW.
The total of new and consented plant is 21.5 GW. Adding the submitted renewable capacity gives a total potential of 26 GW, certainly exceeding that which is expected to be lost, without the need for new nuclear.
Gas supplies
DECC has published a risk assessment on gas security of supply, as required by the EU Regulation on Security of Gas Supply, and Chris Huhne has asked Ofgem to examine security issues "to ensure that medium to long-term gas supplies for consumers remain secure”.
The wholesale gas market in Britain has a good track record in attracting significant private investment, but Ofgem's Chief Executive, Alistair Buchanan, observes that Britain has a "growing exposure to a volatile global gas market".
"We have seen this recently where political instability in the Middle East and the impact of Fukushima have helped push up wholesale gas prices for this winter by 40%," he said.
Therefore Ofgem is considering imposing incentives on the gas industry of £20 per therm for domestic users when they fail to balance their gas supplies to and off-takes from the system, in order to improve security of supplies.
Additional measures could include forcing suppliers to store fixed amounts of gas and publish more transparently details of their holdings and supply contracts.
These proposals have been published today in a consultation and are based on modelling by Redpoint.
This shows that under current conditions the domestic market should on average only experience disruption once every 16 years, and the non-domestic market once every 122 years.
This is in line with National Grid’s Gone Green scenario that expects demand to fall beyond 2012. Net imports were 26.2% in 2008 and have declined since then.
However if new gas plant is built to meet the electricity capacity gap then this will create more demand.
However, it is estimated that up to 20% of this could be supplied from renewable sources by 2020.
Oil supply
Despite the plans to introduce more electric vehicles onto our roads, oil will continue to be the main fuel for transport.
The Security of Supply report does not envisage significant reductions in oil demand over the next 20 years.
Although the consumption of petrol in the UK is expected to fall, diesel and aviation fuel are expected to show significant growth.
The UK will therefore remain vulnerable to oil price increases, and oil will proportionately increase as a source of the country's total carbon emissions, which it will find stubbornly hard to reduce..
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