Where yesterday’s talks focused very much on traditional, or conventional, energy sources such as coal, gas and oil, today’s presentations covered topics on the opportunities (or not) to transition away from high carbon electricity to sources such as nuclear and renewables, and the challenges they face. Day 2 (theme: The Future of the Electricity System), again, covered many interesting subjects although it was a shame that there was not time allowed to question the speakers in between presentations.
Starting with the keynote again, Dr. Jeremy Legget sold us a good story on how the big energy, big capital, institutionally supported “incumbents” wield so much power and influence compared with the “insurgent” small energy, small capital, people/community-led initiatives, to wit: a cultural coherence (few whistle-blowers); skilled storytelling (oil and gas is infinite, etc.); influence through lobbying (vastly outnumber green lobbyists); and the incumbency occupies the default position in the media, perhaps even to the point of influencing and using propaganda as strongly implied by Jeremy. Where the insurgency fails, it is because of the exact opposite reasons i.e. incoherent (solar “vs” wind), poor storytelling, lack of influence and “lack of synergy with natural allies”.
The backdrop to this ‘struggle’ between the incumbents and the insurgency are the energy market risk bubbles:
- Financial – availability of capital for future electricity system due to economic crisis.
- Climate – action restricted by policy.
- Carbon bubble – the environmental value of incumbent fossil fuels currently too low, Figure 1.
- Oil depletion – economic stability of those dependent on oil income as peak oil is met (see Day 1).
- Shale gas boom – flash-in-the-pan or long-term viability?
Many of these risks are tribal, for example belief/denial of climate change, the fossil fuel industry vs. renewables. Jeremy invoked some neuroscience theory to explain that we irrationally defend our belief systems, but also that we are naturally optimistic and gravitate (personally and societally) toward empathic and pro-social narratives. Because of this, the insurgency can gain ground by engaging at smaller scale, local/community levels where, effectively, people can be involved in their electricity generation.
For me, though, the most interesting talk of the day was the first to kick off “the Viability of Nuclear Power” session which, unfortunately for the the three speakers who followed, blew apart the idea of new nuclear power in the UK. I will admit to previously being a reluctant supporter of nuclear energy. Few truly serious accidents have occurred and it provides cheap low-CO2 baseload electricity – the real kick in the teeth being the waste legacy, but this is something I believe will eventually be cracked (e.g. Gen. IV reactors, see Dr. Richard Stainsby’s presentation for more info.). However, after listening to Prof. Steven Thomas’s talk on the failure of policy to deliver on the promise of cheap electricity, I think I have changed my mind.
According to Prof. Thomas, the costs of building and operating new nuclear plants in the UK have at least tripled from those envisaged in 2008: from “no subsidies” to a 40 year contract with unknown government prop-ups; from £31-44/MWh to £95-100/MWh; from £2bn to £7bn per reactor. This would leave us with only 2 of the 10 reactors sought, producing 3.2GW instead of 16GW. If the UK were to go for 10 reactors, we (the consumer) would be commited to £500bn of spending for electricity that will be double the current wholesale cost, and delayed until at least 2023. Prof. Thomas was very critical of the failure of successive UK governments to secure a good deal, and asked what’s in it for EDF (the developers). Not only does the consumer get lumped with the development cost, but we as a society lose out on the opportunity cost of spending the same cash on renewables and energy efficiency, which are arguably much greener and cheaper options.
David Shropshire also recognises the challenges of developing the next generation of nuclear energy, for example the drop in gas prices has resulted in a switch to gas-fired electricity generation, and the rise of renewables, which have both eroded the market for nuclear. The “Fukushima factor” has had a demonstrable impact in some countries (e.g. Germany), however many countries have re-affirmed their commitment to nuclear (e.g. UK…and look how well that’s going). Uranium is cheap at the moment, though, and at current consumption from conventional resources, there is over 100 years of fuel left. High capital costs are probably the elephant in the room (there was no discussion of the waste issue, unsurprisingly), but new and innovative ways of financing could overcome this obstacle.
The second half of the day explored “the challenges of a renewables based electricity grid”, and was kicked off by Dr. Nicola McEwen on the subject of energy policy in Scotland in the event of independence. Scotland is on target to meet the devolved Holyrood government’s commitment to 100% equivalent renewable supply by 2020, being already at 19% in 2010 and 27% in 2011, Figure 2.
Independence is a political hot potato though, and not wanting to be drawn into either side side of the debate, Dr. McEwen concluded that independence could both benefit Scottish energy policy through increased legislative powers and the ability to export electricity (as is currently the case, mind you), as well as be constrained due to the renewable industry in Scotland currently benefiting from GB-wide subsidies. What is more likely, in her opinion, is that a removal of the UK from the EU would probably be significantly more detrimental than Scottish independence from the UK, since EU market integration benefits the UK market, and hence affects whatever route Scotland ultimately goes down as the UK would be Scotland’s largest market for electricity export.
Up until Dr. Ulrike Lehr’s talk, I wondered whether anyone was going to include environmental costs within their assessments of commercial viability or the economics of energy sources – something which is usually forgotten about, or from more a cynical perspective, brushed under the carpet. It was good to see, therefore, some consideration of the costs and benefits of renewable energy, in this case in Germany. I’m not going to pretend to understand all of the analysis by Dr. Lehr (you can check out his slides, and his report if you want to interrogate it further), but his ultimate conclusion is that – so far – the avoided environmental costs (benefits) of implementing renewable energy supply in Germany are outweighed by the additional costs of doing so. The cost-benefit analysis for 2012 gives total additional costs at €12.6bn and benefits of €10.1bn. This is important because until the benefits outweigh the costs, then there is no or little incentive to invest in renewable energy, as I understand it. The cost to the environment has to be above the cost to invest, in order to make it worthwhile avoiding. Crucially in Germany’s case, 50% of the additional costs come from installation of solar PV, but produces only 5% of Germany’s electricity (this will be explored further in Day 3), therefore reductions in solar PV costs will have a large effect on overall additional costs (which is already happening).
Now, I do a disservice to Andrew Hiorns of the National Grid, by summarising his entire talk as: it should be possible to build and manage an interconnected grid across Europe to cope with future electricity supplies being intermittent and variable (i.e. renewables), and inflexible compared with current fossil fuel generation. His slides are worth a look through for more detail and I’m going to use one of his figures, below (Figure 3) just to show the anticipated UK generation mix up to 2035. The talking points of the graph are the anticipated large uptake in wind generation, an increase in generation from gas, and a significant reduction in coal (although somewhat offset by CCS from 2030).
The final two presentation of the day covered the topic of electricity storage. Previously I thought that electricity storage on a large scale was – so far – impossible, however my eyes were opened by Friedrich Schulte and Dr. David Fermin! For example, I hadn’t considered pumped hydro as a storage option (duh!), but then there were technologies I’d never heard of such as compressed air storage (similar idea to hydro, but with air), and power-to-gas, which uses energy (e.g. solar or wind) at times of low demand to convert CO2 or water to hydrogen or methane – these gasses can be stored and used in a traditional gas turbine when required. Where local generation is concerned, for example micro-generated solar and wind, then batteries are an option, but their uptake will be limited by the economics (i.e. avoided electricity purchasing costs).
So, all-in-all, a fascinating day covering incumbents fossil fuel industry vs the insurgent alternatives, how expensive nuclear energy is, energy policy in an independent Scotland, the costs and benefits of renewables, and the challenges of electricity distribution and storage! Only one more day to go…