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In Britain, unprofitable fracking is green energy

Renewable energy is usually presented as the sensible alternative to domestic (fracking) gas.  However, in Britain at least, the two are essential components of the same suite of technologies.  This is because of the poor choices made by the UK government that force solar and wind energy to go hand in hand with fracking in the short to medium term.

In political and media discussions, the baseload problem is usually presented as the need to move electricity from times when it is generated to times when it is needed.  How, for example, do we save the solar energy we generate during the day so that we can use it during the evening peak?  The answer, for the time being, is that we don’t.  Rather, we continue to operate nuclear, coal, wood and (especially) gas power stations that can be ramped up and down in response to the amount of renewable energy being generated and the amount of demand from households and businesses.  That is, during the day when the wind is blowing, we ramp down the electricity generated from fossil fuels, but during the evening when the wind is still and demand is high, we ramp up our fossil fuel generation.

In the future, assuming the energy market and government policy are grounded in reality, some combination of batteries, pumped hydro, compressed air, kinetic devices and household heating could be used to store excess renewable electricity so that, when coupled to a smart grid, a far greater amount of wind and solar electricity will be generated.

But this is the (relatively) easy baseload problem.  The much greater problem involves millisecond by millisecond fluctuations (frequency and voltage) in supply and demand.  Electricity moves at almost the speed of light.  So the power I am using to run the computer to write this article was generated at a power station many miles away just a moment ago.  It is important to me, however, that the electricity arriving at my desk moment by moment is constant.  If it were not, it would damage the computer and cause the lights to flicker.  More importantly, power fluctuations can amplify across the electricity grid, causing power cuts, blackouts and damage to the grid infrastructure.  As one US power utility engineer puts it:

“An electric power system is very complex and must operate within narrow parameters while balancing loads and resources and supporting synchronism.

“Conventional rotating machinery such as coal, nuclear, and gas plants as well as hydro generation provide a lot of support to the system. This includes reactive power (vars), inertia, regulation of the system frequency and the capability to ramping up and down as the load varies. Most renewable resources lack these important capabilities and furthermore are only intermittently available (not dependable). Since wind turbines must rotate at variable speeds their rotational energy cannot be used to support the system…

“When these resources only make up a small percentage of the generation on the system, it is not a big deal. The system is strong enough that utilities are ok with letting a small percentage of solar lean on the system. But as the penetration of solar and wind energy increases the system robustness will degrade and reliability will be compromised without costly improvements.”

In short, without some – yet to be invented – means of second to second balancing of the output from renewables and the demand from consumers, adding additional renewables to an electricity grid designed to run on fossil fuels risks breaking the grid itself (together with a large number of the computers that we increasingly depend upon).

Irrespective of its stated aims, in practice, the UK government has chosen to resolve this issue in the short to medium term using a combination of nuclear and gas generated electricity to maintain the essential reliability services within the system.  For the time being, the cost of adding more wind and solar to the system will be a commensurate addition of nuclear and (especially) gas generation to balance it.  However – and this is where Britain’s real headaches begin – both gas and nuclear have reliability problems of their own.

Many of Britain’s old nuclear power plants are already past their original working lives, and will have to be decommissioned in the next few years.  Coal, too, is being phased out by 2025; with many operators closing early rather than incur further maintenance costs.  Meanwhile, new nuclear is beginning to look like a mirage.  The Hinkley Point C centrepiece of UK energy policy is already behind schedule and billions of pounds over-budget.  Meanwhile, the world’s three nuclear power construction corporations – EDF, Hitachi and Toshiba – are experiencing financial difficulties which, in the very likely event of another global recession, could see them go out of business long before the UK’s new nuclear power plants have been completed.

According to Dr Jenifer Baxter from the Institution of Mechanical Engineers, the nuclear problems will force Britain to become even more heavily dependent upon gas:

“The UK is facing significant challenges in energy supply.  With new technologies coming online, UK population growth and likely increases in the use of electricity in transport and heating to help meet carbon reduction targets, it looks almost certain that the electricity demand profile be ever more challenging over the next 10 years.  Extra energy demand may have to be filled by fossil fuel-burning plants.”

One reason for this is simply that there has been little investment in storage and buffering technologies that would allow a much higher proportion of renewables onto the Grid.  As the US engineer cited above points out:

“Renewables could be supported with batteries, other stored energy resources and technologies allowing advanced control of load demand. This may well be the grid of the future, but would have extremely high costs based on today’s projections. These costs should be well understood and shared before embarking upon such a future. Certainly we should be adding wind and solar whenever it can be justified and also for research benefits, but becoming too ambitious could have dire consequences for system reliability, cost and performance.”

This brings us back to gas.  The UK already generates half of its electricity from gas.  With coal and nuclear shutting down, delays (and possibly cancellations) with new nuclear, coupled to the baseload problem with renewables, the existing gas infrastructure will have to be maintained and added to in future.  But this sends the UK careering into another crisis that has recently deepened – it is one thing to possess gas power stations, it is an entirely different matter to obtain the gas to fuel them.

Traditionally, Britain was able to rely on its North Sea resources to provide more than enough gas.  But North Sea gas production has fallen by more than 60 percent since it peaked in 1999.  Since then the UK has depended on supplies of gas from Norway and to a lesser extent Qatar and Russia.  This has left the country vulnerable to interruption of supply and to increased price volatility in the global wholesale gas market.  To make matters worse, the closure of the Rough storage facility of the Yorkshire coast means that Britain has lost 70 percent of its gas storage capacity, which had allowed energy companies to buy and store gas when it is cheap to provide for additional demand when gas is expensive.  As Andrew Ward in the Financial Times reports:

“Advocates of fracking seized on the loss of Rough to press the case for exploiting UK shale gas resources. ‘The solution for the UK in the medium term cannot be to transport gas across oceans and continents,’ said Ken Cronin, chief executive of UK Onshore Oil & Gas, an industry group.”

This is probably correct on cost grounds, provided (and this is far from certain) that shale gas can be obtained in commercial volumes at a lower price than imported gas from Norway and Russia (pumped) or Qatar and the USA (LNG).  We should, however, at least entertain an alternative possibility – one that has a greater than 50:50 chance of being correct – that the cost of producing domestic shale gas will be greater than UK energy consumers are able to afford.  With household incomes failing like a stone, even as the cost of living rises, millions of the lowest paid households may simply not be able to afford UK shale gas.  This problem is exacerbated by the various pricing arrangements used to cope with electricity over-supply and under-supply problems.  In winter, big industries agree to be disconnected at times of low-supply.  At the same time, generators are paid to maintain excess capacity which can be brought on stream when demand is high.  These costs are then loaded onto consumers’ bills.  Recently, the rise in renewable capacity has led to an opposite scheme having to operate in summer.  Big industries are paid to use more electricity, while energy generators are paid to lower their output.  Again, the costs are lumped onto consumers’ bills.

While government policy simply assumes that UK consumers – households and businesses – will always be able to meet the cost of energy, evidence from the USA suggests the very opposite.  Every time oil prices (which gas prices follow) rise toward $50 per barrel, the fracking industry dusts off its equipment in anticipation of prices continuing to rise.  But every time, the outcome is that hard pressed consumers simply lower their consumption, causing over-supply and a drop in prices.  It is likely that the problem will be much worse in Britain, where the cost of fracking will inevitably be much higher.

The very real risk that Britain now faces is a worst of all possible energy outcomes:  The absence of storage and alternative baseload capacity limits the amount of additional renewable capacity that can be deployed; the nuclear industry fails to deliver the intended 20 percent baseload; coal capacity disappears; dependence upon gas increases just as we discover – as they have in the USA – that fracking is little more than a Ponzi scheme that never had any serious prospect of powering our economy.  While we might all hope that this proves pessimistic, at the very least, we need a serious (and engineering/physics-based) discussion of the options available to us before it is too late.

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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