Britain’s energy industry is dying. That’s the stark conclusion reached by Ambrose Evans-Pritchard in the Telegraph:
“We have let matters drift for so long that half of our nuclear reactors will be phased out over the next nine years with nothing ready to replace them. North Sea oil and gas is a spent reserve. Britain’s dependency on imported fuels and electricity has jumped from 17pc to 46pc since 2000.
“Energy is becoming a corrosive element in Britain’s current account deficit, now 6.9pc of GDP, and the scale of vulnerability has been masked by the slump in world energy prices.”
In future, Britain risks being stuck in an energy trap in which the cost of imported energy prevents further economic growth and risks any further inward investment. Evans-Pritchard’s solution is for Teresa May’s new government to take advantage of low interest rates to finance an all-out push for an alternative energy mix:
“There is no shortage of funds. Britain can borrow at 1.47pc for half a century, and it should do so without compunction as an investment stimulus to carry the country through the post-Brexit storm.
“My heterodox mix will satisfy nobody: it includes fracking a l’outrance [to the utmost], micro-nuclear and molten-salt reactors, more off-shore wind, a Norwegian-style push for electric vehicles by 2030, and a grand plan for carbon capture and storage to take advantage of Britain’s unique competitive advantage in this field and revitalize Northern industries.”
The most obvious problem with Evans-Pritchard’s prescription is that parts of it are based on magic thinking. Neither molten salt reactors nor carbon capture and storage are possible today. Certainly they are much closer than the fool’s paradise that is nuclear fusion. Indeed, it is doubtful that carbon capture and storage can ever be profitable. Liquid Thorium (molten) Salt Reactors are much more promising. This is because the fuel is abundant and the potential energy return is vast. Nevertheless, the materials needed to prevent corrosive molten salt from eating the reactor do not currently exist. Scientists and engineers – notably in China – are working on the problem. But the technology is unlikely to put in an appearance in the timescale required.
Electric vehicles (EVs) are not going to solve the problem either. In Norway, the introduction of electric vehicles has resulted in an increase in petroleum vehicles too. Even if this had not been the case, it is doubtful that even a pro-EV country like Norway could expand the EV fleet fast enough to head off the kind of energy crunch that faces UK mororists.
Fracking might emerge as a bridging fuel to meet the gap in energy as we shift from fossil fuels to a mix of renewables and nuclear. The problem is that this is a very big might. As Evans-Pritchard acknowledges:
“Bob Gatliff from the British Geological Survey (BGS) says nobody knows how much recoverable shale there really is in the key fields: ‘We haven’t got a clue, and we won’t know until they have have drilled hundreds of wells,’ he said. Tectonic shocks over the last 300 million years may have caused the gas to lose pressure.”
The entire British ‘dash for gas’ is based solely on the British Geological Survey’s estimate of rock formations that potentially contain hydrocarbons. Nobody knows if they actually do; still less if they can be brought to the surface commercially:
“Whether drilling in the Bowland [the UK’s biggest shale deposit] will ever be viable depends on flow rates and on whether LNG prices rise above $5 (per MMBtu). The spot price of natural gas in the US is $2.70, but the February 2017 contracts are $3.35.”
While we cannot rule out fracking in Britain’s future energy mix, investing in this unproven industry is a very big gamble. If a combination of geology and economics resulted in shale gas proving to be unprofitable, we would be left with a fleet of expensive new gas power stations that would leave us even more dependent upon imported gas (maybe now would be a good time to restore our friendship with Mr Putin?).
Small modular nuclear plants are undoubtedly a better option than the proposed white elephant at Hinkley Point; but continue to have some serious problems with waste. Moreover, as the rest of the developed world seeks to shift from coal to nuclear, supplies of uranium are going to get expensive. As with fracking, they might offer a bridging energy source while we shift to something more sustainable. However, in their own way they too are something of a gamble.
Wind power is a sensible option for a country with a large, Atlantic-facing coastline. However, this is far from the only renewable resource that the UK could deploy. The Severn estuary tidal range is the second largest on earth. A series of tidal lagoons and/or tidal barrages will easily generate the energy equivalent of three or four coal or nuclear plants. And unlike the wind, tides are entirely predictable. Nor is the Severn estuary the only section of the UK coastline where tidal races offer the prospect of cheap energy for centuries to come.
Solar is more problematic due to our high latitude. That said, treat rooftop solar (both pv and thermal) as a form of energy-saving – allowing households to use their own energy rather than drawing on the Grid – and it can take a role as central to our future energy conservation as attic and cavity wall insulation.
The question facing the new Energy Minister is which of these technologies to gamble on. Get it right, and we can have a thriving economy for decades to come. Get it wrong and we face an energy system similar to that of South Africa, and an economic crisis that will make 2008 look like a picnic.