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Power Station by Martin Kelly
Power Station by Martin Kelly

It’s lights out for the UK

Government energy policy has been called into question in a new report from the Institute of Mechanical Engineers.

Recent government policy changes have done a great deal to lower energy supply.  With the North Sea gas fields in terminal decline, the UK already imports, more than 40 percent of its gas.  And with the end of the Green Deal, the closure of the remaining coal-fired power stations and the end of subsidies for renewables, the situation can only get worse.  According to the report, in the best case scenario the UK will need to import a staggering 40-55 percent of its electricity within a decade:

“The Government has made suggestions that greater use of interconnectors could be made increasing the levels of electricity brought in from other parts of Europe and Scandinavia, such as France, the Netherlands, Ireland, Iceland and Norway. While it may relieve the initial energy gap, this contribution is dependent on generation and supply costs set by those nations, sustainability of supply and ensuring that the UK is not cut off when electricity is in high demand. This model of relying on other nations for meeting the electricity gap could potentially be less secure than the current system and reduce affordability. The generation technologies used to produce this electricity may also be less sustainable and out of the control of the UK Government and citizens.”

The report also takes issue with Energy Secretary Amber Rudd’s proposal to meet the UK’s energy needs from a new fleet of combined cycle gas turbine (CCGT) fired power stations.  These will either require even greater gas imports or a vast new supply of fracked gas from UK shale deposits.  However, the report argues that without a reversal of policy, the UK has neither the time, money nor the expertise to keep the lights on:

“Given electricity demand is also almost certainly set to increase, due to, among other things, population growth and the greater use of electric vehicles, the conclusion is that we have neither the time, resources, nor the sufficient number of skilled people to build enough CCGTs to plug this gap.”

In light of recent developments elsewhere, the government’s own worst case scenario for keeping the lights on looks recklessly over-optimistic:

“’Business as Usual’ with no added incentive for renewables and Hinkley C being only partially built and new CCGT power appearing at current rates (most likely without CHP and CCS). In this case, supply can only be secured by granting an extension to existing coal fired power stations.”

But recent shareholder unrest over EDF’s involvement in the proposed new Hinkley C reactor and with the Chinese economy experiencing serious difficulties, the project may never happen.  Nor are the owners and investors in coal-fired power stations bound to stay the course.  Now that their fate has been officially sealed, there is little incentive for further investment.  And some are already running down capacity.  SSE, for example, has announced the closure of its Fiddler’s Ferry station in Cheshire; reneging on a government subsidy contract that was meant to keep the plant open until at least the winter of 2018/19.

In truth, not all of the blame for this sorry state of affairs can be laid at the feet of the current government.  Given the lead-in time for constructing new generating capacity, the UK should have been commissioning additional capacity from the early 1990s if not earlier.  Nevertheless, by recklessly staking all on fracking and new gas turbines, the current government has guaranteed that the UK economy will collapse for want of energy in the very near future.

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Let us not forget that beyond hard-pressed bill-payers are thousands more who can no longer afford electricity at all