Despite government commitments to nuclear power, the proposed new plant at Hinkley Point is still some way off. This matters as new nuclear plants could have a critical role in providing the UK with low carbon electricity, while maintaining secure supplies.
Once complete, the new Hinkley plant alone should provide around 7% of the UK’s electricity. However further delays could pose a threat to the security of the UK’s electricity supplies. So is the country facing a looming “power gap” in the early 2020s?
Old coal and gas plants will be under increasing pressure to close in the next decade due to the UK’s domestic climate change commitments as well as European air pollution regulations. The EU’s Industrial Emissions Directive (IED) essentially forces plants that don’t meet its standards on emissions to choose between fitting clean-up technologies to remove harmful air pollutants, or accepting strict limits on their operation before a final closure by the end of 2023. This latter option is known as the “limited life derogation”.
The full effect of the IED is not yet clear. However, according to Reuters, the UK plants which are currently expected to close before the end of 2023 as a result of the directive represent around 12,000MW of capacity. This is equivalent to around 20% of the country’s peak electricity demand.
The major attractions of new nuclear plants in this context are their “baseload” – or unfluctuating – output, along with their sheer size: the planned Hinkley plant’s output is 3,200 MW. For comparison, the UK’s largest existing offshore wind farm, the London Array, weighs in at 630MW. With Chinese investors showing interest, the government clearly feels nuclear offers the most direct route for filling the gap and thereby avoiding the lights going out.
However, with the completion of Hinkley Point by its scheduled 2023 finish date now unlikely, and with firm final investment decisions for other mooted UK nuclear projects not yet taken, the country needs additional solutions.
Filling the ‘power gap’
By 2030, nuclear could play a significant role in a heavily decarbonised UK electricity system. However its prospects for the more medium-term horizon of the early 2020s remain uncertain.
Although individual renewable projects are small in comparison to nuclear power stations, the renewable industry as a whole is showing that it can deliver substantial amounts of capacity at a rate of megawatts-per-year that is starting to put nuclear planning timsecales firmly in the shade. The longer we wait for nuclear, the more the current government’s “mixed messages” about renewables may themselves seem a threat to security of supply.
Public objections to wind and other renewables have been much publicised; however, there is evidence that innovative approaches to ownership and distribution of benefits within local communities could substantially increase support.
Renewables alone won’t be enough
Yet even with lots more wind, solar and tidal power in place the UK may still need more conventional capacity by the early 2020s, as the scale of IED closures becomes clearer – not least because variable weather makes it hard for renewables to guarantee full availability at peak times.
It may be that as the European regulations begin to bite, there will be some requirement for new, cleaner gas plants, which could be built relatively quickly. However these plants would have an increasingly intermittent operating schedule, getting called into action only to meet peak demands, or to cover weather-related drops in solar or wind output.
The commercial case for building such rarely-operating plants would be dependent on them being able to make enough money back from this style of occasional operation. The government’s current approach – the “capacity mechanism” – is to pay a retainer fee to generators in return for guaranteeing their availability if called upon at short notice.
Don’t forget demand
Faced with a possible shortage of supply, we’ve so far looked at ways to generate more electricity – but, clearly, another is to reduce demand. This could take the form of reductions in the overall level of demand, for example due to increased efficiency – better technologies, switching off lights, and so on.
However, just as effective could be shifting electricity usage to avoid coinciding with “peak demand”, the point at which the system is under greatest stress. People or organisations who take part in such arrangements should rightly be rewarded, for example with lower electricity tariffs for providing a useful service to the system and helping to reduce overall costs.
While such innovations are sometimes castigated with headlines invoking the three day week of the 1970s, or “third world” electricity systems, in fact they constitute an economically rational approach to the problem of supply and demand, under which both users and suppliers stand to benefit.
The question of security of supply itself could also benefit from some more sober analysis. Any story which raises the spectre of the lights going out implies it is the responsibility of the government, National Grid, or the energy suppliers to guarantee a system which never fails.
This is not the case. As with all aspects of life, risk is inherent, and the expectation of zero-risk is not reasonable. Rather, the question should be: how much are we willing to spend on reducing risk any further? For example, the capacity mechanism will reduce the risk of supply shortages, in part by guaranteeing back-up plants; however these guarantees cost money, and these costs fall on consumers through their bills.
The more secure we want our system to be, the more we will have to pay for it. It’s time for a more constructive debate on the balance between security and cost, including innovative demand-side responses, in the context of our transforming electricity system.