Britain 'facing energy shortfall'

Monday, January 28, 2008

By Richard Black
Environment correspondent, BBC News website

Britain is likely to face a shortfall in electricity generation within five to seven years, a report concludes. Energy and environment consultancy firm Inenco says that the number of nuclear and coal plants coming out of service over the period makes shortages likely.

Old coal plants, whose operating hours are limited under European legislation, have been running more than expected because of higher gas prices.

But other analysts say new plants can be built quickly and shortages avoided.

Earlier this month, the government announced it was prepared to approve applications to build new nuclear reactors, but anticipates it would be 10 years before they came on stream.

"With the recent announcement about new nuclear stations, there seemed to be a collective sigh of relief," said Inenco's deputy managing director Michael Abbott.

"We believe that demand overtakes supply somewhere between 2012 and 2015, creating a serious 'generation gap'."

In its report, to be released later this week, Inenco warns that in the extreme case, shortages could materialise around the time of the London Olympics in 2012.

Burning hours

By that time, the last of the ageing fleet of Magnox nuclear reactors will have closed.

More importantly, a number of older coal-fired stations may also have closed.

Under the European Large Combustion Plants Directive (LCPD), aimed at curbing pollutants such as sulphur dioxide, power units built before 1987 must either be modified with modern emissions control equipment, or operate only for a total of 20,000 hours between 2008 and 2015, when they must come out of service completely.

When the legislation was drawn up in 2001, it was assumed that the old, unmodified plants would operate only at times of high demand.

But recent rapid hikes in the price of gas have induced companies to run them for longer periods.

Government figures show a 25% rise in coal burning for electricity generation between 2000 and 2006.

If the trend continues, the unmodified plants are likely to use up their permitted hours much sooner than expected, and have to close.

Inenco calculates that the capacity of coal and nuclear units likely to come out of service before 2012 totals more than 10 gigawatts (GW).

That would eliminate about one-seventh of Britain's total capacity. The first closures of Britain's second generation of nuclear stations, the advanced gas-cooled reactors (AGRs), and the demise of the remaining large oil-fired stations would be due within a further three years.

Small options

The most obvious way to fill this "energy gap" would be to build new gas-fired power stations; but Inenco doubts this will happen quickly enough.

"For the plants to be operational by 2012, they would have to be given the go-ahead immediately and suffer no delays - a highly unlikely scenario considering we would need between eight and 10 of them," said Mr Abbott.

"The other point to consider is that it is unlikely energy producers will be keen to invest in a technology that they know is going to be second best when the new nuclear plants come on line."

Rob Gross from Imperial College London, head of policy and technology assessment at the UK Energy Research Centre (UKERC), believes Inenco is presenting a worst-case scenario.

"For black-outs to occur, pretty much everything would have to go wrong," he said.

"It's important to remember that during the 'dash for gas', between around 1992 and 2000, around 25GW of new capacity was built, so there is no reason to expect that new gas plant cannot be constructed quickly."

Currently, he said, gas plants with a combined capacity of about 7GW are going through the consent procedure. About 6GW of wind capacity is either in construction or approved, according to the British Wind Energy Association (BWEA).

"Perhaps studies such as this will help issue a 'wake up' call that makes new build and other measures happen more quickly," observed Dr Gross.

Other options for filling the energy gap would include making greater use of the large number of small generators that the National Grid can call on in time of shortage, and extending the use of contracts that allow the grid to interrupt supply to industrial customers at peak periods.

Even if the gap is plugged, Inenco predicts the price of electricity in the years ahead will be higher and more variable than at present.

Posted in |