Posted on September 15th, 2015 No comments
Regular as clockwork, almost, somebody wonders if Britain’s insane drive to build new nuclear power plants is linked to Britain’s “deterrent” nuclear weapons :-
“Query over UK’s civil and military nuclear links : By Paul Brown : Experts are asking whether the UK government’s determination to build more nuclear power stations is linked to its wish to maintain its nuclear deterrent : 13 September, 2015 : Electricity from proposed new nuclear stations in the UK will be more expensive than from any other nuclear reactors in the world, yet the government is pressing ahead with its plan to build 11 new installations, despite mounting criticism. […] The strange mismatch between Europe’s two largest economies, Germany and the UK, is puzzling experts, especially since the International Energy Agency and the OECD Nuclear Energy Agency say in the 2015 Projected Costs of Generating Electricity report that Britain’s plans will make its nuclear electricity the most expensive in the world. […] The Conservative government, elected in May, lacks a coherent energy policy after cutting subsidies for on-shore wind and solar, but sticks to its line that nuclear power is essential for turning Britain into a low-carbon economy. […] Britain has much better renewable resources, yet has decided to opt for nuclear power, even though it is more expensive than on-shore wind or solar. Phil Johnstone and Andy Stirling, University of Sussex research experts in the nuclear policy area, have put forward the suggestion that the UK needs to continue to build and run civilian nuclear power stations to maintain enough nuclear expertise in the country to run its nuclear submarines independently, and so keep its status as a nuclear weapons state. This possible link between civil and military nuclear power has never been debated in public, although the British government has repeatedly drawn attention to the lack of young people entering the nuclear industry, and has spent millions of pounds on training programmes to attract them. Its declared position is that nuclear power is needed to combat climate change, and that there is no link between civil and military needs […]”
Several campaign groups have in fact regularly publicly aired the possibility of this very link between the UK’s military nuclear capability and its civil power programme. The Campaign for Nuclear Disarmament (CND) suggests that the UK needs to keep its civilian nuclear power programme in order to provide tritium for the Trident warheads (e. g. http://www.banthebomb.org/archives/trisaf/ch1.htm; http://www.cnduk.org/index2.php?option=com_content&task=view&id=93&pop=1&page=0&Itemid=159). This would be an important consideration if the UK “divorced” itself from the “special relationship” with the United States at some point in the near future, owing to differences over waging unnecessary and disproportionately vindictive warfare. In the past the UK has imported tritium from the USA, but would be unlikely to do so if military ties were cut, especially if there were questions about the UK’s continued full membership of NATO. In addition, even if the UK-US relationship were to continue, nuclear power plants capable of producing tritium on both sides of the Atlantic Ocean could all be decommissioned within something like 20 years, so without new nuclear power plant builds, the tritium necessary for Trident warhead propellant would simply not be available.
After over a decade of disagreement, the International Atomic Energy Agency (IAEA) has signed an agreement with Kazakhstan for a nuclear material repository :-
At the current time this is only intended to be for LEU – low-enriched uranium – and would be used as a “third party” in the supply of “sensitive” states with the nuclear fuel needed for their civilian nuclear power programmes. Countries such as Iran…
However, if the repository in Kazakhstan became a global repository for nuclear waste and waste nuclear fuel as well as uranium fuel, then the UK might well wish to avail itself of this facility, as it is finding it expensive to manage the re-processing, storing and disposing of uranium, plutonium, mixed nuclear fuels, both spent and reprocessed, and vast barrel-loads of nuclear power programme irradiated waste :-
Even if DECC’s nuclear decommissioning and depository budget can be pared down, there remains the issue of the management of the nuclear warhead fissile material. Already the Office for Nuclear Regulation and the Ministry of Defence are agreeing responsibility dividing lines :-
Without a significant new civilian nuclear power programme in the UK, nuclear physicists and nuclear engineers might need to be imported – leading to various national security questions. However, the most important problem would be in the maintenance and decommissioning of the Trident “independent” nuclear deterrent. It could become very costly indeed. The best option is to scrap it. We don’t need it anyway.
Posted on August 4th, 2015 No comments
During my meeting with boffins last week, when I raised the thorny problem of how many new power generation plants the UK would need to build if all home heating and personal transport were shifted to electricity – and then how they would be left idle for most of the year – my conversational correspondent said it really wasn’t a problem – gas-fired power plants are cheap to build, and they wouldn’t be consuming gas when they’re resting. I found this position untenable – as it could well mean gross inefficiencies in the use of energy, besides locking capital up in unused and unsuable plant. The person asked whether I was after optimising cost or efficiency in energy systems, and my reply was “both”.
After putting together a basic power consumption profile, I realised I needed to build a basic heat model as well, in order to test various simple options of how to meet demand. This proved even harder than the electricity model, as I couldn’t find representative heat demand data of any quality – or at least, I haven’t found any yet. I had to invent a seasonal/weekly half-hourly heat demand profile in order to be able to compare gas demand data to electricity demand data. I must admit, it was extremely basic. I then calculated half-hourly non-industrial heating demand and half-hourly industrial gas demand for 2014. The industrial gas demand would partly be used for generating electricity, as can be seen in the rise and fall in demand maxima when charted alongside power consumption – however this chart is poor, as it slips into the negative, showing that I don’t have any data for half-hourly gross gas demand in the UK, and I’m just using a daily figure divided equally into 48 segments, which is clearly not good enough.
I need to improve this model and then test various options for supplying heat demand.
Some examples of efficiency issues :-
1. Converting primary energy to energy as supplied to consumers
Much centralised power generation in future will be gas-fired, and this is something like 60% efficient – 40% of the energy in the gas is lost as heat.
2. Delivering supplied energy to consumers
I don’t know good figures, but is likely that transmission losses for electricity are much higher than for gas.
3. Gas-fired central heating compared to heat pump heating
Heat pumps that take their input energy from supplied electricity may be on average far more efficient than gas-fired central heating, but heat pumps that rely on gas as the input energy might be a better option.
4. Centralised gas-fired power generation compared to localised Combined Heat and Power (CHP)
By far the most important source of potential future energy efficiency is the relocation of centralised power generation to the local area where the heat may be used for District Heating (DH). Heat demand is currently roughly an order of magnitude larger than power demand. There are many options for developing the use of CHP/DH, in combination with other heating options, such as heat pumps, thermal stores and manufactured Renewable Gas (as an energy store). It remains to be seen if it would be more efficient to run CHP plant to cater for most of the large heat demand and supply the byproduct electricity to manufacture gas, or heat pumps for the rest of the heat; or run the CHP plant only for small local electrical power needs (where there are not many heat pumps), and use the byproduct heat for storage in thermal stores (the DH pipeline network, for example).
The reason why efficiency is absolutely crucial is that within 30 years’ time there could well be problems with guaranteeing reliable and ample supplies of Natural Gas. If gas options for energy are generally more efficient than power options – and especially if gas will be the source of much electricity – we will need to have gas-heavy technology choices, and develop indigenous supplies of manufactured and biological Renewable Gas.
Posted on August 2nd, 2015 No comments
Recently, I was in a meeting with some proper boffins, and I was dismayed when one of them articulated their belief in what I call “electrificandum” – the imperative to convert all UK heating and transport to electrical energy. They said that electrical heating of homes had the potential to be highly efficient – they meant, of course, through the adoption of heat pumps. “How could you think that ?” I mused to myself, “Don’t you realised the awkward implications for power generation ?” Leaving aside the question of how the British people could be persuaded to ditch their liquid fuel cars for BEVs (battery electric vehicles) for the moment, I set about searching for a simple model of the UK electricity system. And spent nearly a week finding useful data. It really shouldn’t be this hard, but data on power is an absolute minefield loaded with caveats and lacking clarification. I have averaged, assumed, checked, modelled and massaged what I could find without paying for specialist data services, and worked them into an Excel spreadsheet. And my results astonish even me. The implications for the total generation capacity required for the peak in demand in the late afternoon and evening in 2050 put to bed the notion that nuclear power can help in any way – nuclear power being fairly steady in output. It also negates the assumption that electrical heating can be efficient : although electrical heating from heat pumps can be efficient from the consumer side, from the generator side it’s going to require huge adaptations and lead to gross wastage – partly because of the total gigawatts of power needed during the peak, and partly because of the speed at which it will need to become available. Even for a UK partway-electrified by 2030, the implications for the power sector are huge. The UK will need to adopt a mixed gas-and-power approach to the low carbon energy future. And because Natural Gas supplies could well become tight in the 2030s, and the development of shale gas will not prevent this, the UK needs to develop resources of Renewable Gas.
The problem with climate change “deniers” and low carbon energy “sceptics” is that they cannot read.
She writes, “The ambit claims know no bounds. Who else would ask for $89,000,000,000,000? If the evil “more developed” nations pay for their carbon sins, the bill for those 1.3 billion people works out at $70,000 per person by 2030 (babies included).”
A simple little diagram from the actual report and a little text, shows she is entirely wrong :-
From Section 2.1 “Infrastructure investment and global growth” :-
“The global economy will require substantial investments in infrastructure as the population and the middle class grow. An estimated US$89 trillion of infrastructure investment will be required through 2030, based on data from the International Energy Agency (IEA), the Organisation for Economic Co-operation and Development (OECD), and analysis for the Commission (see Figure 1). This is chiefly investment in energy and cities. This estimate for the required investment is before accounting for actions to combat climate change.”
That’s before accounting for actions to combat climate change, Ms Nova. Before. I know it’s probably clanging against your internal cognitive fences, but the fact is, the world needs to spend a heap of capital in the next 20 to 30 years reviving, replacing and renewing energy systems infrastructure. That spending has to happen regardless of whether it’s low carbon spending.
And let’s read the note on Figure 1 more carefully :-
“INCLUDING OPERATING EXPENDITURES WOULD MAKE A LOW-CARBON TRANSITION EVEN MORE FAVOURABLE LEADING TO A FURTHER REDUCTION OF US$5 TRILLION, FOR OVERALL POTENTIAL SAVINGS OF US$1 TRILLION”
So, Jo Nova, the world will actually be better off if it decides to make all new energy expenditure low carbon.
Jo Nova, when will you be updating your web post ?Academic Freedom, Artistic Licence, Assets not Liabilities, Bait & Switch, Big Number, Energy Calculation, Energy Change, Energy Crunch, Energy Denial, Energy Insecurity, Energy Revival, Feed the World, Green Investment, Growth Paradigm, Human Nurture, Incalculable Disaster, Libertarian Liberalism, Low Carbon Life, Mad Mad World, Marvellous Wonderful, Modern Myths, Money Sings, Optimistic Generation, Orwells, Paradigm Shapeshifter, Price Control, Protest & Survive, Solution City, Stirring Stuff, Sustainable Deferment, The Data, The Science of Communitagion, The War on Error, Toxic Hazard, Unqualified Opinion, Unsolicited Advice & Guidance, Unutterably Useless, Utter Futility, Zero Net
So I met somebody last week, at their invitation, to talk a little bit about my research into Renewable Gas.
I can’t say who it was, as I didn’t get their permission to do so. I can probably (caveat emptor) safely say that they are a fairly significant player in the energy engineering sector.
I think they were trying to assess whether my work was a bankable asset yet, but I think they quickly realised that I am nowhere near a full proposal for a Renewable Gas system.
Although there were some technologies and options over which we had a meeting of minds, I was quite disappointed by their opinions in connection with a number of energy projects in the United Kingdom.Academic Freedom, Alchemical, Assets not Liabilities, Baseload is History, Be Prepared, Big Number, Big Picture, Bioeffigy, Biofools, Biomess, British Biogas, Burning Money, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Coal Hell, Corporate Pressure, Cost Effective, Design Matters, Direction of Travel, Dreamworld Economics, Efficiency is King, Electrificandum, Emissions Impossible, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Energy Socialism, Engineering Marvel, Foreign Investment, Fossilised Fuels, Gamechanger, Gas Storage, Geogingerneering, Green Gas, Green Investment, Green Power, Grid Netmare, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Insulation, Low Carbon Life, Marine Gas, Methane Management, National Energy, National Power, Natural Gas, Nuclear Nuisance, Nuclear Shambles, Oil Change, Optimistic Generation, Paradigm Shapeshifter, Peak Natural Gas, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Gas, Shale Game, Solar Sunrise, Solution City, Technofix, Technomess, The Power of Intention, The Price of Gas, The Right Chemistry, Tree Family, Unconventional Foul, Ungreen Development, Unnatural Gas, Wasted Resource, Wind of Fortune, Zero Net
Out of the blue, I got an invitation to a meeting in Whitehall.
I was to join industrial developers and academic researchers at the Department of Energy and Climate Change (DECC) in a meeting of the “Green Hydrogen Standard Working Group”.
The date was 12th June 2015. The weather was sunny and hot and merited a fine Italian lemonade, fizzing with carbon dioxide. The venue was an air-conditioned grey bunker, but it wasn’t an unfriendly dungeon, particularly as I already knew about half the people in the room.
The subject of the get-together was Green Hydrogen, and the work of the group is to formulate a policy for a Green Hydrogen standard, navigating a number of issues, including the intersection with other policy, and drawing in a very wide range of chemical engineers in the private sector.
My reputation for not putting up with any piffle clearly preceded me, as somebody at the meeting said he expected I would be quite critical. I said that I would not be saying anything, but that I would be listening carefully. Having said I wouldn’t speak, I must admit I laughed at all the right places in the discussion, and wrote copious notes, and participated frequently in the way of non-verbal communication, so as usual, I was very present. At the end I was asked for my opinion about the group’s work and I was politely congratulational on progress.
So, good. I behaved myself. And I got invited back for the next meeting. But what was it all about ?
Most of what it is necessary to communicate is that at the current time, most hydrogen production is either accidental output from the chemical industry, or made from fossil fuels – the main two being coal and Natural Gas.
Hydrogen is used extensively in the petroleum refinery industry, but there are bold plans to bring hydrogen to transport mobility through a variety of applications, for example, hydrogen for fuel cell vehicles.
Clearly, the Green Hydrogen standard has to be such that it lowers the bar on carbon dioxide (CO2) emissions – and it could turn out that the consensus converges on any technologies that have a net CO2 emissions profile lower than steam methane reforming (SMR), or the steam reforming of methane (SRM), of Natural Gas.
[ It’s at this very moment that I need to point out the “acronym conflict” in the use of “SMR” – which is confusingly being also used for “Small Modular Reactors” of the nuclear fission kind. In the context of what I am writing here, though, it is used in the context of turning methane into syngas – a product high in hydrogen content. ]
Some numbers about Carbon Capture and Storage (CCS) used in the manufacture of hydrogen were presented in the meeting, including the impact this would have on CO2 emissions, and these were very intriguing.
I had some good and useful conversations with people before and after the meeting, and left thinking that this process is going to be very useful to engage with – a kind of dragnet pulling key players into low carbon gas production.
Here follow my notes from the meeting. They are, of course, not to be taken verbatim. I have permission to recount aspects of the discussion, in gist, as it was an industrial liaison group, not an internal DECC meeting. However, I should not say who said what, or which companies or organisations they are working with or for.Academic Freedom, Alchemical, Assets not Liabilities, Baseload is History, Big Number, Big Picture, Bioeffigy, Biofools, Biomess, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Change Management, Corporate Pressure, Demoticratica, Direction of Travel, Efficiency is King, Electrificandum, Energy Autonomy, Energy Calculation, Energy Change, Energy Revival, Engineering Marvel, Fossilised Fuels, Gamechanger, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Major Shift, Marvellous Wonderful, Methane Management, National Energy, National Power, Natural Gas, Nuclear Nuisance, Nuclear Shambles, Oil Change, Optimistic Generation, Peak Emissions, Peak Natural Gas, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Revolving Door, Social Capital, Social Change, Social Democracy, Solution City, Tarred Sands, Technofix, The Data, The Myth of Innovation, The Power of Intention, The Price of Gas, The Right Chemistry, Transport of Delight, Tree Family, Ungreen Development, Unnatural Gas, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on June 23rd, 2015 No comments
The British Government do not have an energy policy. They may think they have one, and they may regularly tell us that they have one, but in reality, they don’t. There are a number of elements of regulatory work and market intervention that they are engaged with, but none of these by itself is significant enough to count as a policy for energy. Moreover, all of these elements taken together do not add up to energy security, energy efficiency, decarbonisation and affordable energy.
What it takes to have an energy policy is a clear understanding of what is a realistic strategy for reinvestment in energy after the dry years of privatisation, and a focus on energy efficiency, and getting sufficient low carbon energy built to meet the Carbon Budget on time. Current British Government ambitions on energy are not realistic, will not attract sufficient investment, will not promote increased energy efficiency and will not achieve the right scale and speed of decarbonisation.
I’m going to break down my critique into a series of small chunks. The first one is a quick look at the numbers and outcomes arising from the British Government’s obsessive promotion of nuclear power, a fantasy science fiction that is out of reach, not least because the industry is dog-tired and motheaten.Academic Freedom, Alchemical, Artistic Licence, Assets not Liabilities, Bait & Switch, Baseload is History, Big Number, Big Picture, British Biogas, Burning Money, Carbon Recycling, Change Management, Cost Effective, Dead End, Design Matters, Direction of Travel, Disturbing Trends, Dreamworld Economics, Efficiency is King, Electrificandum, Emissions Impossible, Energy Autonomy, Energy Calculation, Energy Change, Energy Insecurity, Energy Revival, Engineering Marvel, Gamechanger, Gas Storage, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Nuclear Nuisance, Nuclear Shambles, Optimistic Generation, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Renewable Gas, Solar Sunrise, Solution City, Technofix, Technological Fallacy, Technological Sideshow, The Data, The Power of Intention, The Right Chemistry, The War on Error, Wasted Resource, Wind of Fortune, Zero Net
Posted on June 15th, 2015 No comments
I went to a fascinating meeting on Monday 8th June 2015, hosted by PricewaterhouseCooper (PwC) in London, and organised by the Solar Trade Association, and starring Mr Sunshine himself, Greg Barker, who was on top form, and exceptionally good value, as always.
We had very interesting presentations from a number of key actors in solar photovoltaic energy, including the newly rebranded Solar Power Europe. James Watson, Solar Power Europe‘s CEO, expressed a view to the effect that it could seem like a waste of time, effort and money for Europe to be spending half its Energy Union budget on reforming the EU Emissions Trading Scheme, when so much could be achieved instead through a recasting of the Renewable Energy Directive. Amendments are due in a new Renewable Energy package in 2017, as confirmed by Commissioner Arias Cañete in March 2015. These amendments would usefully tackle the risk of the European Capacity Mechanism being used to support coal-fired power in Germany – as the parallel policy has been in the UK.
The Energy Union is taking forward the open and free market principles of “harmonisation” of the electricity and gas trade in the geographical envelope of the Eurozone, which includes countries that have not taken the Euro currency, such as the UK, and countries that are in the European Economic Area but are not full members of the European Union, principally Norway. A key part of the Energy Union is a physical enactment of guarantees for market access – focusing on standards in gas and power products, and the interconnectors that make cross-border trade possible. It is in the interests of all the private energy companies, public energy companies, invididual producers and network operators in the region to take part in this project, as the outcomes will include not only free, open and fair trade, they will also increase energy security in the region, particularly as the level of renewable energy production increases. Renewable electricity is intermittent and variable at all time slices, and strongly seasonal and weather-related, and so international trade within the European region is essential.
Most commentators on the Energy Union narrow in on the electricity grids, but union also includes the gas grids. The legal framework for gas market harmonisation includes work on gas quality standards and also what kinds of gas can be transmitted through the pipelines, issues covered in the 2009 Energy Package, which permitted unconstrained access for alternative gases as long as they meet the gas protocols. This would permit gas grid injection of biomethane, and potentially other biogases or Renewable Gas varieties.
One of the main contributors to new power production in the Eurozone is renewable electricity, with growth that has continued throughout the recession in the economy. Although barriers to increased renewable power in the electricity grids have been by and large vaulted, through a combination of regulatory progress and subsidies, as the landscape has changed, so has the need for re-assessment of policy. For example, in the UK, the solar Feed-in Tariff has been strongly criticised as costing too much (although it is a minnow in terms of the total socialised energy budget), and has had to be “degressed” – or stepped down in stages. In Germany, all electricity consumers have been taxed in order to pay for the renewable energy budget – and there has even been a tax on “self-consumption” for solar power producers – and this has been strongly contested. Plans to manufacture low carbon gas from excess solar and wind power would be badly affected by this. It does seem strange that producer-consumers of virtually cost-less and zero carbon power should be taxed, especially when centralised producers are forced to sell power for virtually nothing when there is oversupply – for example on a sunny day.
What is more likely to hold back European solar expansion, according to Solar Power Europe, is the Minimum Import Price, or MIP. Solar Power Europe will are lobbying for an end to both the MIP and German solar tax. The MIP, according to their analysis, is making solar power in Europe too costly, compared to other regions. Roughly 60% to 70% of the MIP subsidy is going to support Chinese manufacturers, yet China’s solar power industry is becoming very successful in its own right, and doesn’t need this support. Solar Power Europe are concerned that there is gaming of the market going on to decrease the costs of solar panels in Europe – for example, panels made in China are being routed through countries where exports don’t come under the MIP rules. In effect, Solar Power Europe wants policy to change to stop subsidising China and iron out counter-productive internal policies.
Solar Power Europe have published their “Global Market Outlook : 2015 – 2019” this week, and clearly, there are sunny times ahead, especially since Greg Barker has a key role in delivering solar power in London.
Greg Barker came to the podium to give his summary of solar power in the UK. He reminded the solar power industry, that although they were becoming a serious sector, that they would continue to remain dependent on subsidies. He said that the major reduction in unit costs was probably over; and barring some improvements in underlying technology, such as revolutions in semiconductor devices, I think I’d probably agree with him. Greg Barker said that to promote the market, there was still a need to sweep away unintended obstacles – he said he didn’t understand why solar power was still cheaper in Germany. He said that the development in solar power was incredible – he said that when he had first taken office in the previous Coalition Government, when he had talked about his ambition for solar power, officials had “fallen off their chairs, laughing”, at his parrotting as Minister, but that now there was a risk of over-development under the Levy Control Framework – the policy that caps subsidy spending on energy. Greg Barker said that he regretted that the EMR bids from solar power (bidding into the Contracts for Difference auction instituted as part of the Electricity Market Reform) may now not get built. He said that the solar industry would be “gutted that Eric Pickles has gone”, and that with the new majority Conservative Government rooftop solar would get support from the Department for Communities and Local Government from their new Minister Greg Clark. Greg Barker said that Camilla Cavendish, appointed in David Cameron’s Policy Unit, is a real ally of renewable energy. Greg Barker warned the room that there would be no additions to the levy budget for solar power, and told the solar industry not to go asking for increases as the regulatory environment would be harsh. He said the solar power developers should aim to drive down their costs and dive into a far more centralised market. He said that he expected that there would be “insurgent companies” making significant progress on solar power – something that the Big Six electricity providers would be unable to do. He warned the solar industry to he “hardheaded and realistic” and urged them to work with the Government.
Greg Barker told us about his new appointment to the London Sustainable Development Commission. He said that when Boris Johnson had called him about this, he hadn’t heard of it. Greg Barker said that the population of London is growing by 100,000 a year, and that London has growing technology companies – so much so that clean tech in London is better than California. He said that he accepted the appointment to the London SDC on the basis that he would get carte blanche to reform it, to “shift the dial”. He said that “much as I love city farms, and bees“, that he wanted to create more focus. He said that he wanted to get the London SDC working to three criteria on solar power, firstly scalability. He wants to see solar power initiatives that are scalable – which I took to mean not just large unrepeatable projects, or small bespoke projects. Greg Barker said that solar power policy should have genuine additionality – not just producing more reports. The third criteria he wants to apply is that of replicability – as until now, the record of solar power in London was not very good. He said we should remember the aesthetics of solar power, and that big blue panels sitting proud of a red clay roof was not particularly appealing. He mentioned Amber Rudd, who has been given the post of Secretary of State for the Department of Energy and Climate Change, and how she has been talking about the aesthetics of nuclear power. He said this issue was not ephemeral and that it was important to have good design for the London “semi” – semi-detached house. He said that local policy changes could help – such as eliminating the Congestion Charge for solar power companies having to drive and park in London for installations. Greg Barker said that Ed Davey, the Secretary of State for Energy and Climate Change in the previous Government, was too narrow in his views on organisations that should be enabled to do solar projects. Greg Barker said that we needed not only co-operatives, but also charities, and local authority level alliances, to be enabled to do solar projects. He said that policy needed to be revisited as regards the mid-sector rooftop solar band. He said that if the solar industry and builders get together and propose a change in regulation, Greg Clark would listen. Greg Barker said that Government should be regulating for outcome and not process in order to make progress. Greg Barker said that he wanted solar power to be a key policy issue in the upcoming mayoral election (for the Mayor of London). He said that when he had sat down with Boris Johnson the issues that had surfaced were a need for policy to deal with the circular economy, and how to develop London’s clean tech cluster, and the need for a solar group.
Greg Barker finished with some good advice. He told the solar power industry to be “persuasive rather than loud”. He said that the solar industry need to understand that a good deal of subsidy has to be focused on the offshore wind power priority, and that this cannot be changed. He said that the solar power industry could “pick up the slack from onshore wind”. He reminded the solar industry to focus on aesthetics and to sell this along with the idea of energy efficiency and return on investment. He said that the Green Deal has shown that we are still a long way from a market in energy efficiency. He asked if the Feed-in Tariff would survive, as solar power continues in its march towards grid parity.
Later on in the day, over snacks and a couple of beers, I was shown worrying-looking maps of the state of the National Grid by somebody looking at the “constraints” being imposed by Western Power Distribution (WPD), for example, in the South West of England. A summary that could be drawn from the maps was that there are difficulties with adding new power generators into large parts of the grid network. For the proposed Hinkley Point C nuclear power plant and the new Seabank 3 gas-fired power plant, an entirely new piece of grid will be needed – which will increase the lead time to these projects being able to contribute power to the network. If modifications for major projects are going to take up all the attention of National Grid, they won’t be able to advance the upgrades to the grid needed for small, decentralised projects – perhaps for years – and this is worrying as it imposes limitations on the amount of new renewable electricity that can be added in the near future. Some will see this as excellent news, as it will cap the rollout of windfarms and solar parks. However, this will create a drag on low carbon transition. It seems that large amounts of new renewables will only be possible in localised grids – so emphasis on developing solar power in London is useful.
Posted on June 9th, 2015 No comments
The three pillars of future energy systems will be : efficiency, renewable electricity and energy storage. Efficiency in energy systems will be strongly dependent on balancing supply and demand, not only moment by moment, but also intra-day and intra-week – coping with peaks and troughs. With increasing amounts of renewable electricity generation, balancing becomes ever more important, even down to the hour-by-hour scale. In addition, besides fine grain issues, there will be climate and weather variations in demand for energy, and also seasonal variation. At the present time, there is a significant disparity between summer and winter gas demand for many developed, industrialised countries. This divergence between seasons is not so pronounced in power demand, unless there is strong demand for electrical heating in winter. That power demand does not have as wide a seasonal swing as that for Natural Gas is a good thing – as it means that nations do not need to build electricity generation plant that remains idle for most of the year. With the anticipated exit from coal-fired power generation, countries are likely to want to turn to gas-fired power plants, which will increase gas demand year-round, but will not reduce the inter-seasonal demand disparity.
Energy system efficiency being dependent on balancing services where there are high levels of renewable power generation in the grid networks means that there will be a growing need for inter-seasonal energy storage. There is likely to be an excess of renewable electricity generation in summer, as is already being seen in Germany. Solid state energy storage, such as large scale batteries – whether chemical, thermal or potential energy – are likely to remain suitable for short cycle load balancing, but may not be able to stretch to time periods longer than a few weeks. Other options for energy storage are in development, but Germany and other countries have already decided to go for low carbon gas to store summer solar and other renewable power excess. Germany’s dena agency plans gas grid injection of a low volume of “Power to Gas” Renewable Hydrogen and a higher volume of synthetic methane. It is important to note that the scale of production possible for low carbon industrially manufactured gas is an order of magnitude greater than for biogas (made from biomass by microbiological processing).
Work to strengthen energy security will help with choosing manufactured gas for energy balancing between seasons. The UK and other countries are improving and increasing Natural Gas storage facilities, and work to manufacture methane-rich gas can make use of this provision. A shift towards low carbon manufactured gas over the next few decades will help meet tightening carbon budgets, as the use of Natural Gas will become subject to constraint, because Carbon Capture and Storage will not be developed rapidly.
The total amount of gas demand is likely to remain high. Despite the fact that over the next few decades, increasing building insulation rates will strongly reduce strong winter demand for gas, gas is going to be increasingly used in mobility solutions – for example compressed gas inter-city heavy good vehicles, shipping and trains. This will make gas demand more uniform throughout the year, so inter-seasonal gas storage will not be so vital. However, there will still be cold, wind-less, dark winter days when gas will be important, even if it’s only for power generation.
To make Renewable Gas viable in the short-term, it is vital to have as much solar power and wind power as possible, to put into “Power to Gas” systems. As time goes by, new methods to make Renewable Hydrogen will emerge, complementing the electrolysis used for today’s Renewable Hydrogen production. Interestingly enough, these advances could come from within the petrorefinery sector, where there is growing demand for hydrogen for clean refinery processing. It makes no sense to compete with other gas users by making all this new hydrogen from Natural Gas – sooner or later Shell and BP will turn to making Renewable Hydrogen in large volumes.
Low carbon manufactured gas – both Renewable Hydrogen and synthetic methane – can help the oil and gas companies survive, if they follow a strategy to first of all transition out of crude petroleum oil to Natural Gas, and then transition to Renewable Gas. The use of Natural Gas will decline, and the use of low carbon gas will increase, reducing the risk of economic discontinuity from the collapse of “big oil and gas”.
Posted on June 8th, 2015 No comments
Today, I attended a very enlightening event organised by the British Solar Trade Association, titled “Does the new government mean business for solar ?”. The answer to this question was “perhaps”, but with several caveats.
The Electricity Market Reform of the Energy Act enacted in the last parliament included a facility for “Contracts for Difference” (CfD), an auction for government subsidies. Solar photovoltaic projects bid successfully, but the generation capacity was low, and today I learned that some of these projects could be at risk of non-completion.
The CfD auction is for large solar schemes. Smaller schemes, such as those for residential housing, still have the Feed in Tariff to support them – however the meeting considered the impact on growth in this area owing to step change degression in this subsidy support.
If the failure of the CfD and FiT to stimulate wider uptake of solar power wasn’t concerning enough, the meeting looked at issues with grid connection for new renewable energy projects. This was shown to be the result of a “perfect storm” of low ambition in government, underestimates of growth, long lead times for connection processes, uncertainties in guarantees for connection, and the long turnaround time for pushing through technological changes.
Several people that I spoke to in the breaks highlighted physical problems in the grid network that mean that the power grid is “full” through large parts of the South West of England, the Midlands and southern Wales. One person ventured that the problem could easily be getting worse in Scotland, where enormous wind power projects have begun to saturate the grid connections to England. And the view held by some was that this problem has a four year lead time to fix.
If the Conservative Government wants to grow solar power, besides managing the massively complex web of actors in the solar power industry, it’s going to need to show more oversight of this vital physical barrier – the electricity grid is in sore need of major improvement and expansion, and without this, solar will be going nowhere.
tag: @thesolartrade @ECIU_UK #NewGovernmentSolar
Posted on June 8th, 2015 No comments
Later on this morning, I shall attend the shiniest, brightest, sunniest event of the whole year so far : by the invitation of the Solar Trade Association, I shall attend a day of presentations named “Does the new government mean business for solar ?”. If I were a journalist, I would probably assume that the answer to that question is the default “no”, but I’m hoping some of the attendees will claim otherwise. And here below is a related press release about a publication released today : “Solar Independence Plan for Britain”, outlining exciting opportunities for solar photovoltaic farms in the UK. I shall be smiling all day, I can tell. The UK solar future’s so bright, I’ll need to wear PV shades.
‘Solar Independence’ is opportunity for Britain
Media Release : Embargoed to: 00:01 Monday 8 June 2015
Commenting on the publication of the ‘Solar Independence Plan for Britain’ by the Solar Trade Association , Guy Smith, Vice President of the National Farmers Union, highlighted the opportunity that solar power presents to British farmers.
Guy Smith said: “We’re pleased to see the fast-maturing solar industry calling for a responsible tapering-off in the level of public support it requires. Solar farmers are proud to be contributing renewable electricity into the British grid and the NFU is firmly in favour of using subsidies as efficiently as possible.”
“Our advice to government would be that as many farmers are finding, solar farms can easily be managed to support additional biodiversity such as bees and birds. The government is asking farmers to meet targets on biodiversity, and so we’d urge ministers to support solar farms as part of the solution.”
“Farm economists seem agreed that in the future farm-gate prices will become more volatile. Increased weather volatility is a key factor in this. To help manage this volatility farmers need to spread risk across a number of diverse income streams, and solar power and the other land-based renewables are an excellent way of doing this thus helping secure a robust rural economy.”
Catherine Mitchell, Professor of Energy Policy at the University of Exeter , said that smart policies could support the development of the solar industry in the UK.
Catherine Mitchell said: “We are seeing a profound global transformation in how we think about and build energy systems, and solar is the technology that is leading it.”
“Where governments enact good policy, healthy industries emerge and costs fall. Citizens become entrepreneurs.”
“As the Solar Independence Plan shows, Britain is potentially just five years away from a tipping point in this transformation, and I’d certainly urge ministers to encourage the inevitable rather than fighting it.”
Notes to editors:
1. The ‘Solar Independence Plan for Britain’ by the Solar Trade Association is published on Monday 8 June.
2. Guy Smith and Catherine Mitchell sit on the Advisory Board of the Energy and Climate Intelligence Unit: http://eciu.net/about/advisory-board
3. The Solar Trade Association is holding an event on 8th June 2015 titled “Does the new government mean business for solar ?”
For more information:
Richard Black, director, ECIU, Tel: 07912 583 328, email: richard . black @ eciu . net
George Smeeton, head of communications, ECIU, Tel: 07894 571 153, email: george . smeeton @ eciu . net
The Energy and Climate Intelligence Unit is a non-profit organisation supporting informed debate on energy and climate change issues in the UK. Britain faces important choices on energy and on responding to climate change, and we believe it is vital that debates on these issues are underpinned by evidence and set in their proper context.
We support journalists and other communicators with accurate and accessible briefings on key issues, and help connect individuals and organisations in the field with the national conversation.
Our Advisory Board reflects the breadth of society’s interest in energy and climate issues. It includes climate scientists, energy policy experts and economists, as well as a range of other stakeholders including MPs and Peers.
All of our funding comes from philanthropic foundations. We gratefully acknowledge the support of the European Climate Foundation the Grantham Foundation for the Protection of the Environment, and the Tellus Mater Foundation.
For more information or to receive our daily newsletter, please visit our website: http://eciu.net/
Posted on June 4th, 2015 No comments
It may not be immediately obvious that significant change is underway in the energy sector. Heavily-capitalised and strongly-invested petroleum oil and gas companies stride the lands and seas, seeking what still fruitful part of the Earth’s lithosphere they may devour. Billions of overweight road and air vehicles incessantly burr and rattle, draining the carbon lifeblood from geological time. Yet, still, change is a-coming in.
You wouldn’t know it from the public discourse on energy futures that the debate has shifted anywhere away from the 1980s or the 1990s. Major oil and gas companies still tout the benefits of pricing negative emissions, as if ordinary people still believe what economists and financiers claim. Shell and BP still sell the merits of Carbon Capture and Storage, not that there’s much of this, nor will there be, principally because the technologies proposed are sub-sectoral, will cost a lot to deploy, and won’t capture all the carbon dioxide, anyway. The Laws of Thermodynamics mitigate against the effectiveness of Carbon Capture and Storage – in some cases it could take more energy to bury carbon than dig it up in the first place, and that’s not going to be a winner. But, even though the hydrocarbon hegemony hasn’t brought its arguments up-to-the-minute, change is still taking place.
There are maybe twenty good years to effect a transition out of fossil fuels into manufactured low carbon fuels. The reasons why this needs to happen are : climate change, air quality, Peak Sweet and Peak Easy. Climate change, caused by global warming, caused principally by the burning of fossil fuels and the release of carbon dioxide emissions to the atmosphere. Air quality is an issue of liveability, as the world’s population clusters ever more into urban environments, cities cannot support coal-burning for power, nor diesel-burning for transport. Peak Sweet is the geological fact : the major pools of hydrocarbons light in sulphur compounds are being depleted so rapidly, that it might come about that the only economic resources left to exploit are sour – with both high levels of sulphur and carbon dioxide. Peak Easy is also a geological fact : remaining hydrocarbon resources that are economic to mine, drill and pump are depleting, and so fossil fuel production is going to get increasingly complex and risky. The oil spills and accidental gas venting of the past could be dwarfed by spills and accidental venting of the future.
Of this list, Peak Sweet and Peak Easy are the reasons why the oil and gas industry will change, even though the position of Civil Society still rests in the territory of climate change and air quality. How to get these positions to marry, to build a unifying narrative ?
Let me propose Shell and BP a public relations pitch for free, no consultancy fees : big up your plans for the low carbon transition – tell the people that you are going to stop digging up climate-destroying carbon for a living, and you are going to focus on manufacturing low carbon gases and oils. I mean, Shell and BP are going to need to do this anyway if they want to stay in business – Peak Sweet and Peak Easy could finish off their rates of return – so why don’t they communicate the positive benefits of the low carbon transition and win friends and investors everywhere ?
What would I write if I wrote them a letter ? “Dear Shell and BP, stop alienating people with tired and failed narratives about carbon pricing and Carbon Capture and Storage. You know these strategies will fail to address the core problems of climate change and air quality. But you also know that these strategies will fail to address Peak Sweet and Peak Easy. It’s time to come clean and publish your strategies for decarbonising your energy products. No, it’s not your natural inclination to go massive on wind power or solar power, so why not go with Renewable Gas – Renewable Methane and Renewable Hydrogen ? This is within your core chemistry capabilities, and ramping up Renewable Gas will prevent you losing market share to third parties like Siemens, GE, Alstom and Schlumberger as they develop Renewable Gas options. You want to remain in business, don’t you ? All of your shareholders count on you. And they won’t accept living with the risk of a massive carbon bubble forever. You have maybe twenty years to prove you can really change, stop digging up ancient climate-disturbing carbon, and transition to low carbon energy products. If you use all your public relations skill, you could sell this transition as a truly valuable change (which it is), and keep friends and influence. The next generation could still respect you if you go public with your need to decarbonise. Shell and BP, save yourselves ! Yours sincerely, etc”
The thing is, Shell and BP can transition to low carbon energy gases and fuels. They can, and they will – they just need to crack on with it faster if they want to survive climate change, disinvestment, divestment and Peak Oil. The world will reinvest in energy : Shell and BP need to get on board the low carbon train or be left to shrink and sink.
Posted on June 3rd, 2015 No comments
Shell, BP and some of their confederates in the European oil and gas industry have inched, or perhaps “centimetred”, forward in their narrative on climate change. Previously, the major oil and gas companies were regularly outed as deniers of climate change science; either because of their own public statements, or because of secretive support of organisations active in denying climate change science. It does seem, finally, that Shell in particular has decided to drop this counter-productive “playing of both sides”. Not that there are any “sides” to climate change science. The science on climate change is unequivocal : changes are taking place across the world, and recent global warming is unprecedented, and has almost definitely been attributed to the burning of fossil fuels and land use change.
So Shell and BP have finally realised that they need to shed the mantle of subtle or not-so-subtle denial, although they cling to the shreds of dispute when they utter doubts about the actual numbers or impacts of global warming (for example : http://www.joabbess.com/2015/06/01/shells-public-relations-offensive/). However, we have to grant them a little leeway on that, because although petrogeologists need to understand the science of global warming in order to know where to prospect for oil and gas, their corporate superiors in the organisation may not be scientists at all, and have no understanding of the global carbon cycle and why it’s so disruptive to dig up all that oil and gas hydrocarbon and burn it into the sky. So we should cut the CEOs of Shell and BP a little slack on where they plump for in the spectrum of climate change narrative – from “utter outright doom” to “trifling perturbation”. The central point is that they have stopped denying climate change. In fact, they’re being open that climate change is happening. It’s a miracle ! They have seen the light !
But not that much light, though. Shell and BP’s former position of “scepticism” of the gravity and actuality of global warming and climate change was deployed to great effect in delaying any major change in their business strategies. Obviously, it would have been unseemly to attempt to transmogrify into renewable energy businesses, which is why anybody in the executive branches who showed signs of becoming pro-green has been shunted. There are a number of fairly decent scalps on the fortress pikes, much to their shame. Shell and BP have a continuing duty to their shareholders – to make a profit from selling dirt – and this has shelved any intention to transition to lower carbon energy producers. Granted, both Shell and BP have attempted to reform their internal businesses by applying an actual or virtual price on carbon dioxide emissions, and in some aspects have cleaned up and tidied up their mining and chemical processing. The worsening chemistry of the cheaper fossil fuel resources they have started to use has had implications on their own internal emissions control, but you have to give them credit for trying to do better than they used to do. However, despite their internal adjustments, their external-facing position of denial of the seriousness of climate change has supported them in delaying major change.
With these recent public admissions of accepting climate change as a fact (although CEOs without appropriate science degrees irritatingly disagree with some of the numbers on global warming), it seems possible that Shell and BP have moved from an outright “delay and deny” position, which is to be applauded.
However, they might have moved from “delay and deny” to “delay and distract”. Since the commencement of the global climate talks, from about the 1980s, Shell and BP have said the equivalent of “if the world is serious about acting on global warming (if global warming exists, and global warming is caused by fossil fuels), then the world should agree policy for a framework, and then we will work within that framework.” This is in effect nothing more than the United Nations Framework Convention on Climate Change (UNFCCC) has put forward, so nobody has noticed that Shell and BP are avoiding taking any action themselves here, by making action somebody else’s responsibility.
Shell and BP have known that it would take some considerable time to get unanimity between governments on the reality and severity of climate change. Shell and BP knew that it would take even longer to set up a market in carbon, or a system of carbon dioxide emissions taxation. Shell and BP knew right from the outset that if they kept pushing the ball back to the United Nations, nothing would transpire. The proof of the success of this strategy was the Copenhagen conference in 2009. The next proof of the durability of this delaying tactic will be the outcomes of the Paris 2015 conference. The most that can come out of Paris is another set of slightly improved targets from governments, but no mechanism for translating these into real change.
Shell and BP and the other oil and gas companies have pushed the argument towards a price on carbon, and a market in carbon, and expensive Carbon Capture and Storage technologies. Not that a price on carbon is likely to be anywhere near high enough to pay for Carbon Capture and Storage. But anyway, the point is that these are all distractions. What really needs to happen is that Shell and BP and the rest need to change their products from high carbon to low carbon. They’ve delayed long enough. Now is the time for the United Nations to demand that the fossil fuel companies change their products.
This demand is not just about protecting the survival of the human race, or indeed, the whole biome. Everybody is basically on the same page on this : the Earth should remain liveable-inable. This demand for change is about the survival of Shell and BP as energy companies. They have already started to talk about moving their businesses away from oil to gas. There are high profile companies developing gas-powered cars, trains, ships and possibly even planes. But this will only be a first step. Natural Gas needs to be a bridge to a fully zero carbon world. The oil and gas companies need to transition from oil to gas, and then they need to transition to low carbon gas.
Renewable Gas is not merely “vapourware” – the techniques and technologies for making low carbon gas are available, and have been for decades, or in some cases, centuries. Shell and BP know they can manufacture gas instead of digging it up. They know they can do the chemistry because they already have to do much of the same chemistry in processing fossil hydrocarbons now to meet environmental and performance criteria. BP has known since the 1970s or before that it can recycle carbon in energy systems. Shell is currently producing hydrogen from biomass, and they could do more. A price on carbon is not going to make this transition to low carbon gas. While Shell and BP are delaying the low carbon transition by placing focus on the price of carbon, they could lose a lot of shareholders who shy away from the “carbon bubble” risk of hydrocarbon investment. Shell and BP need to decide for themselves that they want to survive as energy companies, and go public with their plans to transition to low carbon gas, instead of continuing to distract attention away from themselves.Academic Freedom, Alchemical, Assets not Liabilities, Bad Science, Bait & Switch, Be Prepared, Behaviour Changeling, Big Number, Big Picture, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Cost Effective, Deal Breakers, Delay and Deny, Delay and Distract, Divest and Survive, Divide & Rule, Emissions Impossible, Energy Change, Energy Denial, Energy Insecurity, Energy Revival, Engineering Marvel, Extreme Energy, Extreme Weather, Fair Balance, Fossilised Fuels, Freak Science, Freemarketeering, Gamechanger, Geogingerneering, Global Warming, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Marvellous Wonderful, Mass Propaganda, Modern Myths, Orwells, Paradigm Shapeshifter, Peak Emissions, Pet Peeves, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solution City, Stirring Stuff, The Myth of Innovation, The Power of Intention, The Right Chemistry, The Science of Communitagion, Wasted Resource, Western Hedge, Zero Net
Posted on June 2nd, 2015 No comments
So, some people do not understand why I am opposed to the proposal for a price on carbon put forward by Royal Dutch Shell and their oil and gas company confederates.
Those who have been following developments in climate change policy and the energy sector know that the oil and gas companies have been proposing a price on carbon for decades; and yet little has been achieved in cutting carbon dioxide emissions, even though carbon markets and taxes have been instituted in several regions.
Supporters of pricing carbon dioxide emissions urge the “give it time” approach, believing that continuing down the road of tweaking the price of energy in the global economy will cause a significant change in the types of resources being extracted.
My view is that economic policy and the strengthening of carbon markets and cross-border carbon taxes cannot provide a framework for timely and major shifts in the carbon intensity of energy resources, and here’s a brief analysis of why.
1. A price on carbon shifts the locus of action on to the energy consumer and investor
A price on carbon could be expected to alter the profitability of certain fossil fuel mining, drilling and processing operations. For example, the carbon dioxide emissions of a “tank of gas” from a well-to-wheel or mine-to-wheel perspective, could be made to show up in the price on the fuel station forecourt pump. Leaving aside the question of how the carbon tax or unit price would be applied and redistributed for the moment, a price on carbon dioxide emissions could result in fuel A being more expensive than fuel B at the point of sale. Fuel A could expect to fall in popularity, and its sales could falter, and this could filter its effect back up the chain of production, and have implications on the capital expenditure on the production of Fuel A, and the confidence of the investors in investing in Fuel A, and so the oil and gas company would pull out of Fuel A.
However, the business decisions of the oil and gas company are assumed to be dependent on the consumer and the investor. By bowing to the might god of unit price, Shell and its confederates are essentially arguing that they will act only when the energy consumers and energy investors act. There are problems with this declaration of “we only do what we are told by the market” position. What if the unit price of Fuel A is only marginally affected by the price on carbon ? What if Fuel A is regarded as a superior product because of its premium price or other marketing factors ? This situation actually exists – the sales of petroleum oil-based gasoline and diesel are very healthy, despite the fact that running a car on Natural Gas, biogas or electricity could be far cheaper. Apart from the fact that so many motor cars in the global fleet have liquid fuel-oriented engines, what else is keeping people purchasing oil-based fuels when they are frequently more costly than the alternative options ?
And what about investment ? Fuel A might become more costly to produce with a price on carbon, but it will also be more expensive when it is sold, and this could create an extra margin of profit for the producers of Fuel A, and they could then return higher dividends to their shareholders. Why should investors stop holding stocks in Fuel A when their rates of return are higher ?
If neither consumers nor investors are going to change their practice because Fuel A becomes more costly than Fuel B because of a price on carbon, then the oil and gas company are not going to transition out of Fuel A resources.
For Shell to urge a price on carbon therefore, is a delegation of responsibility for change to other actors. This is irresponsible. Shell needs to lead on emissions reduction, not insist that other people change.
2. A price on carbon will not change overall prices or purchasing decsions
In economic theory, choices about products, goods and services are based on key factors such as trust in the supplier, confidence in the product, availability and sustainability of the service, and, of course, the price. Price is a major determinant in most markets, and artificially altering the price of a vital commodity will certainly alter purchasing decisions – unless, that is, the price of the commodity in question increases across the board. If all the players in the field start offering a more expensive product, for example, because of supply chain issues felt across the market, then consumers will not change their choices.
Now consider the global markets in energy. Upwards of 80% of all energy consumed in the global economy is fossil fuel-based. Putting a price on carbon will raise the prices of energy pretty much universally. There will not be enough cleaner, greener product to purchase, so most purchasing decisions will remain the same. Price differentiation in the energy market will not be established by asserting a price on carbon.
A key part of Shell’s argument is that price differentiation will occur because of a price on carbon, and that this will drive behaviour change, and yet there is nothing to suggest it could do that effectively.
3. A price on carbon will not enable Carbon Capture and Storage
Athough a key part of Shell’s argument about a price on carbon is the rationale that it would stimulate the growth in Carbon Capture and Storage (CCS), it seems unlikely that the world will ever agree to a price on carbon that would be sufficient to stimulate significant levels of CCS. A price on carbon will be deemed to be high enough when it creates a difference in the marginal extra production cost of a unit of one energy resource compared to another. A carbon price can only be argued for on the basis of this optimisation process – after all – a carbon price will be expected to be cost-efficient, and not punitive to markets. In other words, carbon prices will be tolerated if they tickle the final cost of energy, but not if they mangle with it. However, CCS could imply the use of 20% to 45% extra energy consumption at a facility or plant. In other words, CCS would create a parasitic load on energy resources that is not slim enough to be supported by a cost-optimal carbon price.
Some argue that the technology for CCS is improving, and that the parasitic load of CCS at installations could be reduced to around 10% to 15% extra energy consumption. However, it is hard to imagine a price on carbon that would pay even for this. And additionally, CCS will continue to require higher levels of energy consumption which is highly inefficient in the use of resources.
Shell’s argument that CCS is vital, and that a price on carbon can support CCS, is invalidated by this simple analysis.
4. Shell needs to be fully engaged in energy transition
Calling for a price on carbon diverts attention from the fact that Shell itself needs to transition out of fossil fuels in order for the world to decarbonise its energy.
Shell rightly says that they should stick to their “core capabilities” – in other words geology and chemistry, instead of wind power and solar power. However, they need to demonstrate that they are willing to act within their central business activities.
Prior to the explosion in the exploitation of deep geological hydrocarbon resources for liquid and gas fuels, there was an energy economy that used coal and chemistry to manufacture gas and liquid fuels. Manufactured gas could still replace Natural Gas, if there are climate, economic or technological limits to how much Natural Gas can be resourced or safely deployed. Of course, to meet climate policy goals, coal chemistry would need to be replaced by biomass chemistry, and significant development of Renewable Hydrogen technologies.
Within its own production facilities, Shell has the answers to meet this challenge. Instead of telling the rest of the world to change its economy and its behaviour, Shell should take up the baton of transition, and perfect its production of low carbon manufactured gas.Academic Freedom, Alchemical, Assets not Liabilities, Bait & Switch, Be Prepared, Behaviour Changeling, Big Picture, Big Society, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Climate Change, Coal Hell, Conflict of Interest, Corporate Pressure, Cost Effective, Dead End, Dead Zone, Delay and Deny, Design Matters, Direction of Travel, Divest and Survive, Dreamworld Economics, Emissions Impossible, Energy Change, Energy Revival, Engineering Marvel, Extreme Energy, Fossilised Fuels, Freemarketeering, Gamechanger, Geogingerneering, Green Gas, Green Investment, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Mad Mad World, Major Shift, Marvellous Wonderful, Mass Propaganda, Modern Myths, Money Sings, Natural Gas, Nudge & Budge, Oil Change, Orwells, Paradigm Shapeshifter, Peak Coal, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Pet Peeves, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Curse, Solar Sunrise, Solution City, Sustainable Deferment, Technofix, The Myth of Innovation, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, The Science of Communitagion, The War on Error, Wind of Fortune
Posted on June 2nd, 2015 No comments
Although The Guardian newspaper employs intelligent people, sometimes they don’t realise they’ve been duped into acting as a mouthpiece for corporate propaganda. The “strapline” for the organisation is “Owned by no one. Free to say anything.”, and so it seemed like a major coup to be granted an interview with Ben Van Beurden of Royal Dutch Shell, recorded for a podcast that was uploaded on 29th May 2015.
However, the journalists, outoing editor Alan Rusbridger, Damian Carrington and Terry McAllister probably didn’t fully appreciate that this was part of an orchestrated piece of public relations. The same day as the podcast was published, Shell, along with five other oil and gas companies wrote a letter to officials of the United Nations Framework Convention on Climate Change (UNFCCC).
In the letter to Christiana Figueres and Laurent Fabius of the UNFCCC, Shell and fellow companies BP, BG Group, Eni, Total and Statoil, wrote that they appreciate the risks of the “critical challenge” of climate change and that they “stand ready to play their part”. After listing their contributions towards a lower carbon energy economy, they wrote :-
“For us to do more, we need governments across the world to provide us with clear, stable, long-term, ambitious policy frameworks. This would reduce uncertainty and help stimulate investments in the right low carbon technologies and the right resources at the right pace.”
“We believe that a price on carbon should be a key element of these frameworks. If governments act to price carbon, this discourages high carbon options and encourages the most efficient ways of reducing emissions widely, including reduced demand for the most carbon intensive fossil fuels, greater energy efficiency, the use of natural gas in place of coal, increased investment in carbon capture and storage, renewable energy, smart buildings and grids, off-grid access to energy, cleaner cars and new mobility business models and behaviors.”
The obvious problem with this call is that the oil and gas companies are pushing responsibility for change out to other actors in the economy, namely, the governments; yet the governments have been stymied at every turn by the lobbying of the oil and gas companies – a non-virtuous cycle of pressure. Where is the commitment by the oil and gas companies to act regardless of regulatory framework ?
I think that many of the technological and efficiency gains mentioned above can be achieved without pricing carbon, and I also think that efforts to assert a price on carbon dioxide emissions will fail to achieve significant change. Here are my top five reasons :-
1. Large portions of the economy will probably be ringfenced from participating in a carbon market or have exemptions from paying a carbon tax. There will always be special pleading, and it is likely that large industrial concerns, and centralised transportation such as aviation, will be able to beat back at a liability for paying for carbon dioxide emissions. Large industrial manufacture will be able to claim that their business is essential in sustaining the economy, so they should not be subject to a price on carbon. International industry and aviation, because of its international nature, will be able to claim that a carbon tax or a market in carbon could infringe their cross-border rights to trade without punitive regulatory charges.
2. Those who dig up carbon will not pay the carbon price. Fossil fuel producers will pass any carbon costs placed on them to the end consumers of fossil fuels. A price on carbon will inevitably make the cost of energy more expensive for every consumer, since somewhere in the region of 80% of global energy is fossil fuel-derived. Customers do not have a non-carbon option to turn to, so will be forced to pay the carbon charges.
3. A price on carbon dioxide emissions will not stop energy producers digging up carbon. An artificial re-levelising of the costs of high carbon energy will certainly deter some projects from going ahead, as they will become unprofitable – such as heavy oil, tar sands and remote oil, such as in the Arctic. However, even with jiggled energy prices from a price on carbon, fossil fuel producers will continue to dig up carbon and sell it to be burned into the sky.
4. A price on carbon dioxide emissions is being touted as a way to incentivise carbon capture and storage (CCS) by the authors of the letter – and we’ve known since they first started talking about CCS in the 1990s that they believe CCS can wring great change. Yet CCS will only be viable at centralised facilities, such as mines and power plants. It will not be possible to apply CCS in transport, or in millions of homes with gas-fired boilers.
5. A price on carbon dioxide emissions will not cause the real change that is needed – the world should as far as possible stop digging up carbon and burning it into the sky. What fossil carbon that still enters energy systems should be recycled where possible, using Renewable Gas technologies, and any other carbon that enters the energy systems should be sourced from renewable resources such as biomass.Academic Freedom, Advertise Freely, Alchemical, Arctic Amplification, Assets not Liabilities, Bait & Switch, Be Prepared, Big Picture, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Carbon Taxatious, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Delay and Deny, Divest and Survive, Dreamworld Economics, Emissions Impossible, Energy Change, Extreme Energy, Financiers of the Apocalypse, Fossilised Fuels, Freemarketeering, Gamechanger, Green Gas, Hydrocarbon Hegemony, Low Carbon Life, Mad Mad World, Major Shift, Mass Propaganda, Media, Money Sings, Natural Gas, Near-Natural Disaster, No Pressure, Not In My Name, Orwells, Paradigm Shapeshifter, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Pure Hollywood, Regulatory Ultimatum, Renewable Gas, Stirring Stuff, Sustainable Deferment, Tarred Sands, The Right Chemistry, The Science of Communitagion, The War on Error, Wasted Resource, Western Hedge
Posted on June 1st, 2015 No comments
And so it has begun – Shell’s public relations offensive ahead of the 2015 Paris climate talks. The substance of their “advocacy” – and for a heavyweight corporation, it’s less lobbying than badgering – is that the rest of the world should adapt. Policymakers should set a price on carbon, according to Shell. A price on carbon might make some dirty, polluting energy projects unprofitable, and there’s some value in that. A price on carbon might also stimulate a certain amount of Carbon Capture and Storage, or CCS, the capturing and permanent underground sequestration of carbon dioxide at large mines, industrial plant and power stations. But how much CCS could be incentivised by pricing carbon is still unclear. Egging on the rest of the world to price carbon would give Shell the room to carry on digging up carbon and burning it and then capturing it and burying it – because energy prices would inevitably rise to cover this cost. Shell continues with the line that they started in the 1990s – that they should continue to dig up carbon and burn it, or sell it to other people to burn, and that the rest of the world should continue to pay for the carbon to be captured and buried – but Shell has not answered a basic problem. As any physicist could tell you, CCS is incredibly energy-inefficient, which makes it cost-inefficient. A price on carbon wouldn’t solve that. It would be far more energy-efficient, and therefore cost-efficient, to either not dig up the carbon in the first place, or, failing that, recycle carbon dioxide into new energy. Shell have the chemical prowess to recycle carbon dioxide into Renewable Gas, but they are still not planning to do it. They are continuing to offer us the worst of all possible worlds. They are absolutely right to stick to their “core capabilities” – other corporations can ramp up renewable electricity such as wind and solar farms – but Shell does chemistry, so it is appropriate for them to manufacture Renewable Gas. They are already using most of the basic process steps in their production of synthetic crude in Canada, and their processing of coal and biomass in The Netherlands. They need to join the dots and aim for Renewable Gas. This will be far less expensive, and much more efficient, than Carbon Capture and Storage. The world does not need to shoulder the expense and effort of setting a price on carbon. Shell and its fellow fossil fuel companies need to transition out to Renewable Gas.Academic Freedom, Alchemical, Assets not Liabilities, Be Prepared, Big Number, Big Picture, British Biogas, Carbon Capture, Carbon Commodities, Carbon Pricing, Carbon Recycling, Climate Change, Coal Hell, Conflict of Interest, Corporate Pressure, Delay and Deny, Demoticratica, Divest and Survive, Dreamworld Economics, Efficiency is King, Emissions Impossible, Energy Calculation, Energy Change, Energy Denial, Energy Revival, Engineering Marvel, Environmental Howzat, Extreme Energy, Financiers of the Apocalypse, Fossilised Fuels, Freemarketeering, Gamechanger, Geogingerneering, Green Gas, Green Investment, Green Power, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Mass Propaganda, Modern Myths, Natural Gas, Not In My Name, Nudge & Budge, Paradigm Shapeshifter, Peak Emissions, Policy Warfare, Political Nightmare, Price Control, Protest & Survive, Public Relations, Pure Hollywood, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Social Capital, Solar Sunrise, Solution City, Sustainable Deferment, Tarred Sands, Technofix, Technological Sideshow, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, The Science of Communitagion, Unconventional Foul, Ungreen Development, Wasted Resource, Western Hedge, Wind of Fortune, Zero Net
Posted on June 1st, 2015 No comments
Well, the Paris climate conference is less than six months away. Just the right time for Royal Dutch Shell to begin to ramp up their public relations offensive, this time by sending their CEO, Ben Van Beurden, to be interviewed by The Guardian, in a most interesting and revealing podcast. My transcript is below…
[Narrator] This is “The Biggest Story in the World”. And today we meet Shell.
Right at the very start of the campaign, The Guardian set their focus on Keeping it in the Ground. Keep the coal in the hole, and the oil in the soil. They decided the best way of doing that was to call on the big institutions to divest their funds from fossil fuel companies, effectively de-legitimising them, like the tobacco industry before them.
So what about the fossil fuel producers themselves ? What do they think about divestment ? Are they scared ? Do they even agree with Bill McKibben’s “Keep it in the Ground” numbers ? We know they’ve made noises about renewables in the past, but are they serious about moving off fossil fuels entirely ? And if they are transitioning, can they possibly do it in time ?
So today we go straight to the wellhead, to Shell’s Ben Van Beurden, one of the men taking it out of the ground to see whether he sees a future.
[Alan Rusbridger ?] I’m here with Damian Carrington and with Terry McAllister, that’s our Environment Editor and our Energy Editor. And we’re waiting for Ben Van Beurden to come in from Shell. Terry, just give us a quick outline of who Shell is, how big they are, what do they do ?
[Terry McAllister] To all intents and purposes, the second largest oil company in the world. They’re owned rather strangely jointly between the UK and Holland. They’re involved in all aspects of fossil fuel production. They bring it out to the ground, they refine it, they ship it all over the world, and of course you’ll see their petrol stations. They’ve got revenues of around $500 billion dollars a year. They’ve got proven reserves of 13 billion barrels of oil, which amounts to 4.5 gigatonnes of carbon. And…
[Alan Rusbridger ?] …and any of us who have a pension, quite a lot of that money’s probably coming from Shell, isn’t it ?
[Terry McAllister] …And they are very, very attractive to all our pension funds because of their high dividends that they pay on the back of their enormous profits which are around £15 billion a year.
[Alan Rusbridger] And who is Ben ?
[Terry McAllister] Ben is a new Chief Executive, who’s come in 18 months ago. And he’s an interesting cut away from the traditional rather dour Chief Executives that Shell have had in the past. He is a Shell “lifer”, so he has come out of the system. But he’s upbeat, accessible, articulate, and becoming a very high profile advocate of a new, responsible oil company.
[Alan Rusbridger] And Damian, there is a controversial company, because what they’re doing in tar sands and the Arctic. What are they doing ?
[Damian Carrington] So, in terms of tar sands, which is digging up large chunks of Alberta and boiling the oil out of it, they’re already there in a big way. The problem with that is not only does it take a lot of energy to get that oil out, it’s also expensive and a number of analyses have suggested that any sensible scenario for climate stability does not include tar sands. That argument also applies to the Arctic, again, probably because of the cost of it. But I think with the Arctic, in addition, there is also great controversy, because any accident that would happen in the Arctic could be catastrophic for both the environment up there and for the company in terms of the cost of trying to deal with it.
[Alan Rusbridger] And they’re also controversial because of who they fund. There’s an outfit called the American Legislative Council. Who are they and why is that controversial ?
[Terry McAllister] Well, they’re most known certainly to environmentalists as climate deniers, pure and simple. So Shell’s involvement in that organisation looks curious. I mean, it’s a very controversial organisation for Shell to be associated with.
[Damian Carrington] I think other companies have left, have they Terry ?
[Terry McAllister] Yes they have.
[Alan Rusbridger] Well, let’s see what he’s got to say.
[Alan Rudbridger] Um. Ben. Thank you for coming in. It’s good of you to come in and talk. Let’s accept for the purposes of this conversation that fossil fuels have brought great benefits to society. They’ve enabled riches beyond measure to develop; that we live much more comfortable lives; as a result of oil. But nevertheless, there is a wider cost and a wider fear about the future of fossil fuels. So, what do you think about what seems to be a widespread acceptance that if we go beyond two degrees of warming then there are major, major problems for the human race, and the kind of existence that we lead at the moment ?
[Ben Van Beurden] You know, I accept the fact that, you know, having the climate change beyond two degrees C is probably highly undesirable and we should do everything to prevent that from happening. In that sense there is no contest. And whether it’s two degrees, or two and a half, or one and a half, or whatever, I don’t really mind too much. What I do know is that we will have to act quite effectively and quite early now to make sure that we have a chance of staying within CO2 concentrations that are often linked to this two degree scenario.
What I find troubling is that we have known this for some period of time, but as a result of it not much has happened. Now, we can go into a long discussion, why is that, and who is to blame, and what could we have done differently. But the result is, because nothing much has happened. As a matter of fact, a lot of the things that we have done whilst setting targets and having tough language around this and maybe here and there a few measures, is that we have been increasing the intensity of our economy, in terms of carbon emission, and policy, really meaningful policy action, has been delayed. Now what that has done in my mind, and partly for me as well, it has created a sense of frustration. And of course, I can do something about it in a slightly different way than the general public. And the frustration with the general public is now leading to well, we’ve gotta do something, yeah ? So, now, whether that is going to be, well, let’s divest from companies like Shell, or let’s make statements of whatever kind, I think that you can debate that.
My view is that the things that need doing is meaningful policy change or policy adoption. And we should be very, very careful that the current argument around the “carbon bubble” and “we cannot allow this to happen”, and “we should divest from fossil fuel companies”, that that actually is creating the illusion that there is a simple solution out there. Whereas in reality, we all know, there isn’t.
[ Alan Rusbridger ] Let’s come back to the solutions [in]… ’cause I just want to see what we accept, so what the common ground for this conversation [is]. So, two degrees, you broadly accept ?
[ Ben Van Beurden ] Yes, absolutely.
[ Alan Rusbridger ] Now, you’ll be familiar with the Bill McKibben article in Rolling Stone, I guess.
[ Ben Van Beurden ] Yes. The budget. Yeah.
[ Alan Rusbridger ] Let’s just see what you think of the two other figures there. Two degrees is the first interesting figure. The second interesting figure is if we’re going to stay within two degrees we can afford to burn about 565 gigatonnes. Do you accept that there’s a figure of around about that that is compatible with staying within two degrees ?
[ Ben Van Beurden ] You’re absolutely right. If you do simple math along those lines you could argue that there is a limited number of tonnes of carbon that we can burn in an unmitigated way. Absolutely right.
[ Alan Rusbridger ] So, let’s just see what you think of the third figure. Which is the amount of proven oil, gas and coal reserves which he says is 2795 gigatonnes. He says that’s about four or five times the amount that we can safely burn. Do you accept that ?
[ Ben Van Beurden ] Not sure about again the precise numbers. But if you will add up all the carbon that we have sitting in the ground – gas, oil, coal you will come to a number that if again you would just burn it in an unmitigated way it would probably have a CO2 loading in the atmosphere that is above the level that people link to CO2. There is no contest there, Alan.
[ Alan Rusbridger ] So, commonsense interpretation of those figures is that companies like yours have got already far more oil, gas and coal than they can ever use.
[ Ben Van Beurden ] I think that’s where the logic goes wrong.
[ Alan Rusbridger ] Tell me where that’s wrong.
[ Ben Van Beurden ] So, yeah, you’re absolutely right. There is probably more hydrocarbon resources sitting in the ground than we collectively can dig or pump up and burn, but at the same time they are in different types of carbon. So if you look again at coal – coal has a much higher carbon intensity. If you look at the sort of CO2 equivalent of the coal resources that we have – that is actually almost half of what is available. If you want to use the concept of a budget, then indeed we have an issue.
[ Alan Rusbridger ] Can I [say]… when you say we have an issue. What you’re saying is you own more than could be used.
[ Ben Van Beurden ] We as society have an issue.
[ Alan Rusbridger ] And do you say that about Shell, too ?
[ Ben Van Beurden ] No. I think in the end of course the resources that will get used, if we all behave rationally, or if there are policies that do the most rational thing, the resources that are going to be used hopefully are going to be the resources with the lowest carbon intensity. So that may be class of resource like gas or coal, but within the type of resource, it may be resources that from a well-to-wheel perspective have the lowest carbon intensity. So if we want to look at our business, we want to make sure that our business is as future-proof as possible – from a number of perspectives, including CO2.
[ Alan Rusbridger ] Your argument is that you’re more interested in the cleaner fuels than the dirtier fuels, if I can be… I’m the lay man in this room, so I’m using ordinary language.
[ Ben Ven Beurden ] That’s fair enough. I would probably say the lower-intensity fuels than the higher-intensity fuels.
[ Alan Rusbridger ] So, gas rather than…
[ Ben Van Beurden ] …Gas, [coal] oil and…
[ Alan Rusbridger ] …oil.
[ Ben Van Beurden ] …[oil] coal. Because bear in mind that people often confuse climate change with the pollution that comes from coal in the form of particulates, which are of course two separate issues.
But the point is, Alan, and I think there’s nothing wrong with the logic, is we cannot burn all the hydrocarbon resources that we have on the planet in an unmitigated way, and expect to have a CO2 loading in the atmosphere that is often being linked to the 2 degree scenario. So we have to do a number of things. Part of it is shifting to the cleanest form possible. Part of it is having as much as possible an efficiency drive, so that we do not use or need as much as we can. As much renewables or any other form of energy that has no carbon associated with it. And even then, we are not going to get to that, sort of constraint, if you like. So on top of it we will need to do extra tricks, which is capturing the carbon and storing it.
And I’m absolutely convinced that without a policy that will really enable and realise carbon capture and storage on a large scale, we’re not going to be able to stay within that CO2 emission budget.
[ Alan Rusbridger ] OK, let’s come back to that, because that’s very important. Why are you spending so much time looking for more oil if you’ve got more than you could use already ?
[ Ben Van Beurden ] Well, all the oil that we have we will use, even under a scenario where we will have a very, very effective set of policies to drive down the use of hydrocarbons, there will still be need for hydrocarbons for some time to come of course. And the rate with which we will be able to either sort of slow growth or even reduce, or switch from growth to shrinkage, the rate with which we will be able to do that, is always going to be lower than the rate with which resources deplete. So there will always be, even in the most aggressive scenario, a gap between supply and demand if we don’t continue to invest.
So there will always be a need for investment. Because it will take longer before we get to a point that we will have no need for hydrocarbons. I think we will get to the point where we will have zero emissions, by the end of the century, definitely, I’m a firm believer in that, but even then, some of the hydrocarbons that we will use, and the emissions that will come from it, will simply be mitigated, rather than not produced. There will be significant sectors in the industry that will depend on hydrocarbons – petrochemicals for instance, yeah. So I think to just say, “we can do without hydrocarbons” and “we don’t need them any more”, “let’s stop exploring for them because they are coming out of our ears already”, that is not quite an accurate reflection for a company like us.
[ Alan Rusbridger ] So there’s one argument about the quantum of oil that you’re searching for. Another is the type and location. People find tar sands very problematical as an environmental […] How do you defend that ?
[ Ben Van Beurden ] It’s a mining operation. I’ll be the first one to say that mining operations do not look pretty. You’re right that there is a significant CO2 emission. Take our Athabasca project in Canada where we are 60% shareholders – 6.5 million tonnes of CO2 coming out of the mine and the upgrader combined. And that’s of course a significant number. So we have to look for ways and means to deal with that. What we are doing at the moment is investing in a carbon capture and storage project on this particular mine. So we will be capturing of that 6.5 million tonnes, 1 million tonnnes of CO2, and that sort of gets us a fair way towards the average CO2 intensity of North American oil.
[ Terry McAllister ? ] Let me just very briefly on that, you’re talking there about the emissions that derive from getting the fuel out of the ground – not from [the] actual burning the fuel itself. You’re talking about the operations.
[ Ben Van Beurden ] Yeah, that’s true. That 6.5 million tonnes is the mining and upgrading operation. Burning the fuel in cars and etc. is of course still the bulk of it. But in that sense, it’s no different, or as a matter of fact, because it is a synthetic route that we make there, it actually is a higher quality crude, so the CO2 emissions associated with use of that crude are probably somewhat lower than the average. But in the main you have to look therefore from well to wheel, or mine to wheel, and that’s the only sensible way to look at CO2 intensity.
[ Damian Carrington ?] Fair enough, yeah. I wanted to come back. You were talking before about, the very clear conversation you and Alan had to begin with about accepting that all the reserves when you add them up are too much, you know. And you were talking about using, like it would be logical to use the least carbon-intensive first, OK. But there’s another logic in the real world, which is using the least cost first, OK. That’s where some of Shell’s operations start to look difficult, in the sense that tar sands come out at the very high cost end, the Arctic comes out at the very high cost end. And so in a rational world, if we’ve decided we’re not going to burn everything, those are the projects that get stranded first. So I’m just wondering if you accept that there’s too much. What’s special about Shell’s tar sands or Arctic, which means that it is sensible to go after them when they’re clearly high cost, and Saudi crude would be far cheaper and more sensible to use ?
[ Ben Van Beurden ] Yeah, yeah. It in the end is going to be market forces of supply and demand that set price, and then there’s going to be rational decision-making of investors that are going to figure out, “do I get a return on investing in this project ?”. The only way you can impact that, and this is why we are also great advocates of what I’m going to say, is put a price on carbon, and then say, well, I’m not really interested in the merit order that may flow from sort of normal rational decision-making around economics, I’m going to trick the playing field, I’m going to put a serious price on carbon. That is the sort of rational decision-making that we would like to see much more of. And that’s why we’re advocating for a firm price on carbon.
[ Alan Rusbridger ] Just to go on the Arctic. It’s very high risk, isn’t it ? Some people say it’s reckless.
[ Ben Van Beurden ] I’m familiar with that argument, Alan.
[ Alan Rusbridger ] And your response ?
[ Ben Van Beurden ] Yeah. Well, the more I listen and think about it, I actually hear two sets of arguments. And there’s one argument that says, “Listen, this is a very sensitive environment. It’s pristine to a very large degree. Of course, it will have great difficulties to deal with environmental impacts. Putting oil and gas operations right in the middle of it doesn’t seem like the right thing to do.”
There’s a second line of reasoning that I also hear, and I hear that probably more loudly. Which is, “Listen, you know, we have climate change. The Arctic is disproportionately impacted by climate change, which is probably a fact, yeah ? And climate change is caused by of course oil and gas, and therefore exploring for oil and gas in the Arctic is insulting.” That is an emotional argument, and there is no amount of reasoning that I can bring to bear to deal with that emotional argument. And I’m not going to try that even, because I think it probably does us a disservice as well. In the end we also have to make our decisions on the basis of logic. The opening about the Arctic is not our decision, it is the decision of an Arctic nation, in this case the United States. And it’s our task to figure out can we do this responsibly, can we do this profitably, and can it be done at all, yeah ? And if the answer to all of that is yes, then we should consider it as an investment opportunity. And we can only get into the Arctic in a responsible way if we can completely convince ourselves that we are able and ready to do this at a level of risk that is completely acceptable. And believe me I have had to go through a personal journey on that as well. Bear in mind I had the opportunity very early on in my tenure to say, “that’s it. Let’s pull the plug on it.” And we decided no, we have to follow this through, we have to understand whether it can be done.
[ Alan Rusbridger ] When you came to The Guardian last, you said you had the same discussions around your breakfast table as everyone else. And you’ve just hinted in your last answer that you sort of wear two hats as an individual. You’ve got your member of society, and [but] then I guess you go into work and you then have your primary responsibility is to shareholders. How often do those come into conflict ?
[ Ben Van Beurden ] Erm, I could either say all the time, or never. It… Let me explain what I mean by that. You are a very different person as well, yeah ? I have of course read your editorial, when you said, “listen. This is one of the regrets that I may have, and I want to do something about that.” And that is, in my mind, the same sort of drive that I have in this matter. Of course, I’m driven by business success etc. but what I’m also driven by, and this is why I am very, very happy to come and talk to you, even though we probably will never agree on a number of points, is that we need to do the right thing here. It’s very, very good that there is a broad societal debate on this, because I am completely with everybody else on this subject, that we need to tackle this. I’m also completely [aware] that there is a secondary moral challenge – which is supplying affordable energy to billions of people who do not have an acceptable lifestyle. And where I get a lot of my energy from is that if I see that as part of the societal debate seems to suggest a very simple solution that we know in reality is not there, I think we are creating somehow as society, a red herring, and doing ourselves a disservice.
And in a way we are, because of the belief that there may be a simple solution out there, like divesting out of fossil fuel, or stop using it, or whatever else, we are actually delaying meaningful policy action. Whereas in reality it will not happen this way. In reality there will be an inexorable drive for people to raise their living standards, to use hydrocarbons, because that will be the only meaningful volume of energy that is available. So we have to do something else, Alan.
[ Alan Rusbridger ] What do you think of the argument that says, this isn’t a level playing field, that your industry is getting too much in subsidies. And if the renewable [energy] industries got as much subsidies as you get, we’d crack that problem quite soon.
[ Ben Van Beurden ] First of all I’m not at all in favour of subsidies. Now, you have to be a bit precise about what you mean by subsidies, but directly subsidising fuel use like for instance happening in developing countries etc. I do not think is meaningful. I think companies like ourselves effectively don’t get subsidies, yeah ? It […] as a matter of fact, we pay significant taxes. You can talk about externalities, pricing that fully into, and then, but that’s not a subsidy.
[ Alan Rusbridger ] The IMF came up with $10 million dollars a minute the other day.
[ Ben Van Beurden ] Yeah, the $5.3 trillion dollars. Yeah, these are pricing in the externalities of air pollution into the price of energy etc. And I’m sure that these numbers have validity, but that’s not a subsidy.
[ Alan Rusbridger ] But do you accept that the odds are stacked against the renewable industry ?
[ Ben Van Beurden ] No, I…
[ Alan Rusbridger ] You’ve got tremendous power, your industry…
[ Ben Van Beurden ] …No, I don’t think so…
[ Alan Rusbridger ] …in terms of lobbying and access…
[ Ben Van Beurden ] …No, I don’t think so. If you look at renewables, and let’s be very clear, we have a renewables business, and I work very, very hard to understand how we can meaningfully participate, and of course make money with that as well. But if you look at the rate with which renewables are growing it’s absolutely unprecedented, yeah ? It is growing at I think the fastest pace of any new form of energy, almost reaching the point where it’s 1 percent of the total energy mix. But it’s only 1 percent. Bearing in mind that the energy system will have to double in size over the first half of the century to serve all these new energy users that we need to serve around the planet, renewables is not going to cut it. So we will have to do multiple things here.
[ Alan Rusbridger ] I’ve got lots of hands waving to my right.
[ Terry McAllister ? ] If I could…first on the poverty side ? You talked in your response to Alan there about feeling this kind of moral responsibility, you know, as an energy provider. I think the point where we might disagree is about whether fossil fuels are the solution to that particular problem. And I just wanted to very briefly tell you a bit about what the Intergovernmental Panel on Climate Change said, which of course is written and reviewed by thousands of the world’s scientists, and signed off by 195 nations. They say climate change, driven by unchecked fossil fuel burning is [quote] “a threat to sustainable development.” They say that limiting climate change’s effects is “necessary to achieve sustainable development and equity, including poverty eradication”. And they go further than that and say that “climate change will prolong existing and create new poverty traps”. So, I mean that’s a pretty authoritative document saying that fossil fuels are not the answer to providing energy to billions of people.
[ Ben Van Beurden ] No, it doesn’t say that.
[ Terry McAllister ? ] OK.
[ Ben Van Beurden ] It says that climate change is indeed also devastating probably disproportionately the poor people in the world. And I can fully support that, having lived in Africa myself for quite a few years, in the Sudan. But it doesn’t say that fossil fuels is not the solution for it, or that energy is not the solution for it. People in these circumstances will still need access to fossil fuels, will need access to energy in general. And the most sensible way to do that on the scale that they need it will be unfortunately through fossil fuels.
[ Terry McAllister ? ] I don’t understand how you have one without the other. You’re kind of saying climate change is a problem, but they still need fossil fuels. But fossil fuels are the things that are driving climate change.
[ Ben Van Beurden ] But this is. OK. So this is the dilemma that we need to solve. We need to find a way to providing affordable energy to poor people in the world that do not have access to affordable energy at this point in time, and at the same time we need to reduce CO2.
And if we somehow think that we can do all of that with renewables, that is just ignoring the realities of economic and technical development.
[ Terry McAllister ] Well, that’s fair enough. But people disagree with you. And I’ve seen it in India, you know, where when you’re a long way in rural communities, they’re not going to have a grid there, they’re not going to have big fossil fuel power stations, and solar is cheap.
[ Ben Van Beurden ] Absolutely. And you will see that happen. You will see probably the development of countries that do have nothing at the moment following a fundamentally different path than the UK, or Germany or the United States, absolutely. But they cannot skip large scale energy provision for meaningful economic development, yeah ? That is just not going to happen by solar and wind.
[ Alan Rusbridger ] Now, I’m not expecting you Ben to come here today and say that you agree with divestment as an idea, and I’m going to anticipate that you say that it’s better to have good money in your companies rather than bad monies, and that you prefer the idea of engagement. And I’m just going to see if whether Francesca can just play a little clip. Because we had Jonathon Porritt sitting in your chair a couple of weeks ago and we were talking about this, he’s spent 40 years in this business trying to engage with companies like you, and let’s just listen to what he says about engagement.
[ Jonathon Porritt ] They’ve had so many opportunities to put their houses in order and get after this much smarter decarbonised route to energy security, affordability and sustainability. They really have, I mean, limitless opportunities over the last decade. [But you just say], you’re all smart, you’re all paid God knows how much money to steer through these complex areas. You have a fiduciary duty to your shareholders, and yes you’ve been meeting that at one level, but at another level, in terms of guaranteeing long term value creation for shareholders, you are betraying your shareholders. And you are risking the write-off, the destruction of massive value inside the company.
[ Alan Rusbridger ] I’m sure you know Jonathon. He’s not a sort of extremist, or loony eco-warrior. He’s somebody who’s tried to build a business engaging with people like you. And in the end he said he’s come to the conclusion : it’s just never going to happen. Because of the, you know, it’s the wrong question to ask you. You’ve got different priorities.
[ Ben Van Beurden ] Err, I wouldn’t say that. It, err. So, we’ll get to the question of divestment in a moment. But the question probably that, or the challenge in here was, do we sufficiently recognise the need for a transition, either because of assets getting stranded, or because of the new opportunities that we as a sort of a responsible member of society need to also explore and develop. I fundamentally do not believe that that actually holds business rationale, simply because even under a very, very aggressive scenario where we get out of fossil fuels, the scenario with which fossil fuels’ existing production depletes will always result in a divestment or an investment, opportunity, so therefore investing in fossil fuels will remain relevant for a very, very long time to come, for our shareholders as well.
[ Alan Rusbridger ] Just to jump in there, you have got people like the Governor of the Bank of England flagging that up as an issue.
[ Ben Van Beurden ] Yeah, well OK, I will not comment on the Governor of the Bank of England. But investment opportunity will always remain, and if you have an “advantage portfolio”, you will always be able to make money out of that. So therefore that argument in my mind is just comprehensively non-existent. It may sound seductive, but it’s just not there. Now the other argument which is “do we have opportunity, or do we have even an obligation to invest in low a carbon energy future ?” : absolutely. Because I also know that whatever I’m going to find as a business model or as a technology that will work for me is going to take decades to be pulled off.
Can I just remind you that we have been very, very active participants in solar energy, in wind energy, biofuels. We were in forestry. In many, many areas we have been ahead of our time, simply because you know the opportunity to really meaningfully invest in it was just not there. So I want to be on the one hand careful that we do not repeat that mistake. On the other hand we are very actively experimenting with new businesses to find how we can participate in a renewable-based energy system. Because it will come there.
[ Alan Rusbridger ] There’s a letter in The Times today that says you spend three times as much finding new fossil fuel reserves as you do on developing renewables. Does that sound the right figure ?
[ Ben Van Beurden ] Yeah, but it… No. We do not spend a lot of time sort of inventing an improved wind turbine or figuring out what sort of new solar panel technology would be there. You have to also in that sense go back to core capabilities. If you were to set up a solar PV business, you wouldn’t hire a bunch of geologists to figure out how to do that. But making money out of a renewable future, absolutely, this is something that we need to do.
[ Alan Rusbridger ] Tell me about these conversations with people like Wellcome and [Bill] Gates. They say we like investing in companies like Shell, because we have influence. And if we took our money out we wouldn’t have that influence. But nobody can ever point to what that influence looks like, or what results from that. Can you enlighten us [as] to what good things come from good conversations with good people as opposed to bad people ?
[ Ben Van Beurden ] Of course we talk to all our shareholders. And certainly, and of course, from certain groups you hear this more than from other groups, there is concern around the “carbon bubble”. And that is probably a mix of concerns, where some people are really concerned with the Governor of the Bank of England argument, like, “can these assets really become stranded ?” And you have people who are in there indeed for again sort of belief reasons, fundamental reasons. I do not want… I believe fossil fuel is bad, it sits in a bracket of investments that I don’t want to be in. Some of the advocacy can help to point out that you know there’s a lot of good things that come from energy. As a matter of fact, people use energy and fossil fuel products much more than they will ever realise. And they don’t realise what the world would look like without it. And I think we can also help people a little bit more along the understanding line by pointing out what it is that we are doing, and where we think we are indeed a progressive company, in making the energy transition work.
The problem with that is, Alan, is that we’re not very good at it, you know, at that sort of public advocacy piece. We have over [the] many years built up a reflex that engagement has more reputational downsides than upsides. And I think to some extent therefore we are partly to blame for the dysfunctionality of the debate in society at the moment. So, I want to change that. I want to be working for a company, or leading a company, that is not only considering itself a force for good, but is being recognised as a company that is responsible, does the right things, as well.
[ Alan Rusbridger ] You’re sometimes now compared with tobacco, or with South Africa, as a kind of, a thing in society that is becoming toxic. Do you accept that that’s just going to get worse for companies like Shell ?
[ Ben Van Beurden ] That would be a tragedy I think, and not only for a company like Shell and its employees, and for me personally, but I think also for society. It would be tragic if people thought that having access to modern energy, and basically having access to the lifestyle, the security, and the life expectancy that we have, was actually [a] bad thing. And sometimes a little facetiously, I just tell people if you want to divest your portfolio out of fossil fuel companies, as much as people have divested them from tobacco companies etc. you probably are going to make more impact by divesting your lifestyle from fossil fuels. And then look for a moment what that will do to you.
[ Alan Rusbridger ] You’ve essentially, I think, put the responsibility for change on the policymakers. So that’s like saying, “stop me before I kill again”.
[ Ben Van Beurden ] Yes. OK.
[ Alan Rusbridger ] You’re saying, “we can’t do this as a company, unless there’s a level playing field for everyone” and you say you’ve been lobbying for this, but you’ve still put a lot of money into things like the American Legislative Council, which other people have pulled out, which is lobbying in the other direction. You’ve got mixed messages.
[ Ben Van Beurden ] I do not want to leave the impression that it’s all the policymakers’ fault. That would be too easy. Policymakers respond to input and insight that they get. Sometimes that is indeed by voters and public opinion, and I think we can do more, and we should do more, to advocate for sensible policy. And I am not ashamed, because we are advocating for things that I can 100% stand up for. If anything, I feel that we have not done well enough. I think sometimes our policy advocacy has been too high level. We can do more, we can do better, and I wish I was ready, but I will be in a few months’ time to tell you a whole lot more about what it all means in detail, because we have a massive amount of work going on in that sense. To have much more bespoke, targetted policy advice, based on the sort of transitions that we can see happening [in] different types of economies around the world.
Now, some of the advocacy we do on our own. Some of the advocacy we do in the context of a trade association, or a professional advocacy group. And what you typically find if you are in there is that, well some of them you have high degrees of agreement, and some, not at all. We have done it on many occasions, where we, you know, we are part of a trade association, and say, well we stand for all the things they say here and there, but this point we disagree with, and our advocacy is the following…
[ Damian Carrington ] But can I ask… ?
[ Alan Rusbridger ] …just let Terry…
[ Terry McAllister ] Still in terms of um, your overall position : you’re keen to be seen as progressive. You’re keen to be seen as responsible. And it, obviously that’s um, to be lauded, and the industry desperately needs someone to step into that space. But still it’s confusing in terms of the kind of lobbying groups that you support. But it’s confusing when your own emissions, your own carbon emissions, are going up year by year. They’re set to increase even more, by taking over BG [BG Group, formerly known as British Gas]. Your involvement in oil sands, tar sands and the Arctic, still you sort of put it down to, well, “if it’s available, through policymakers then we’re going to proceed”. But companies like Total have said that they won’t explore in the Arctic. Would an oil spill in the Arctic potentially end the future of Shell, financially ?
[ Ben Van Beurden ] Well, the thing is of course to avoid a very large oil spill in the Arctic. The risk of a very large oil spill in the Arctic is unacceptable for me. So if I feel that there is a risk that that could materialise, we would simply not go ahead with this, yeah ? So I do not think we send any conflicting signals on our advocacy. If we indeed associate ourselves from time to time with trade organisations or with advocacy groups that have a different viewpoint, we go at lengths to explain how our viewpoint is different, if it’s meaningful. And if it’s too substantial, then we will just step out of these organisations, so watch that space as well.
If you go back to our own emissions. Of course, our own emissions will go up because we will combine with BG. But it doesn’t mean that…
[ Terry McAllister ] But they’re going up anyway.
[ Ben Van Beurden ] Yeah…emissions in general will go up, it’s just that we have become a different company. I think to look at sort of emissions as an absolute way is somewhat meaningless as well. You have to look at the emission intensity of the classes of assets in which you operate.
[ Alan Rusbridger ] We’re running out of time, so I’m going to ask you one last question. When we did a Q&A with The Guardian readers on the site, the only question that readers wanted to know about me was what car I drove. And I was able to answer truthfully that I thought I was the only editor to have owned not one but two G-Whizzes, described by Jeremy Clarkson as the worst car in the world. What car do you drive, Ben ?
[ Ben Van Beurden ] I drive a BMW.
[ Alan Rusbridger ] What kind of size are we talking about ?
[ Ben Van Beurden ] Oh, it’s a 645 convertible.
[ Alan Rusbridger ] That’s terrible. That’s an enormous gas-guzzler. You should be ashamed of yourself, coming in here, talking like this.
[ Ben Van Beurden ] Ah. Come on. You have to believe in your product as well. So, I put the full V Power [in it] all the time, and it drives wonderful.
[ Alan Rusbridger ] Oh, you’ve ruined everything. Well, anyway, Ben, thank you very much for coming in, and stepping into the lions’ den, and talking so eloquently. Thank you.
[ Ben Van Beurden ] Thank you very much. And thank you very much also for your leadership in this space, Alan. I really appreciate that as well.
[ Alan Rusbridger ] Terry, Damian. What did you make of that ?
[ Terry McAllister ] I’m still troubled by the fact that there’s a lot of drivers that encourage Shell and the Chief Executive to go in a fossil fuel direction despite all the interesting comments he had to make about the importance of climate change and wanting to lead this debate and be a responsible actor. I’m still very unconvinced by the difference between what they say and what they do. And particularly the I’m afraid the sort of inadequate answers over your questions on things like tar sands, and particularly the Arctic, where they’re still taking a massive risk. And I don’t see how the company can hope to be taken very seriously on the issue of climate change, and emissions controls, when its own emissions are going up, it’s growing the size of the fossil fuel business, it’s moving into a very, very dangerous and pristine environment like the Arctic.
[ Alan Rusbridger ] To do him credit, it was fairly remarkable that a CEO of a company like Shell should come into The Guardian and take part in a conversation like this. I mean, that is a different breed of executive, isn’t it, for a company like Shell ?
[ Damian Carrington ] Absolutely. I mean, Terry will I’m sure tell us in a minute because he’s met many more energy CEO’s than I have, but I think it is remarkable. And I think if you just contrast it for example with our current relationship with ExxonMobil, where they send us the same sentence every time we ask them for a comment, which is, “we’re not talking to you.”
[ Terry McAllister ] What’s interesting about it is that Ben Van Beurden at the end of the interview talked about how Shell itself was looking at fine-tuning its own policies on these issues, and indeed at the moment is looking at producing its own document. It seems to me that they genuinely are in a position of flux. Fortunately they’ve got a Chief Executive who seems to be very self-confident. He’s very articulate and genuinely interested, and wants to be engaged. And as you say, his predecessors didn’t do that, despite repeated requests. So, I think it is encouraging. And I do get the impression they may be open to argument and persuasion.
[ Alan Rusbridger ] And what about the size of his BMW ?
[ Terry McAllister ] I actually asked the same question of Jeroen Vandeveer, one of his predecessors, and he told me that he rode a bicycle ’cause fuel cost too much. So I don’t know which was more amusing. I rather expected Ben Van Beurden to be driving a large scale saloon as he said as a vote of confidence in his own business.
[ Damian Carrington ] Can I say one last thing, which is that, you know, obviously, The Guardian has done this, you know, this big piece of work, this project on divestment, over the last few months, and what’s become clear is that you can imagine a model for a fossil fuel company for the future, and you start to see the shape of it with E.On splitting its business out for example – they’re a big utility. So, and just in the interview there, you know, Ben Van Beurden told us that in 2050 we probably will have a very, very large segment of renewable energy. And you can imagine a fossil fuel boss – their challenge is to persuade their shareholders that this makes sense – but you can imagine them setting out a future which says over the next few decades we are going to ramp down our fossil fuels and we’re going to increase the other parts of our business. And at that point I think most people in divestment would say, actually that’s OK.
[ Alan Rusbridger ] Kodak never became a digital company, did it ?
[ Narrator ] The Biggest Story in the World is narrated by me Alex Kitovsky. It’s produced by Alana Chance…
Posted on May 29th, 2015 No comments
As if to provide proof for the sneaking suspicion that Great Britain is run by the wealthy, rather than by the people, and that energy policy is decided by a close-knit circle of privileged dynasties, up bubbles Amber Rudd MP’s first whirl of skirmish as Secretary of State for Energy and Climate Change : her brother Roland is chairperson of a lobbying firm, Finsbury, which is seeking to get state approval for a controversial gas storage scheme at Preesall, near Fleetwood, on behalf of the developers, Halite Energy of Preston, Lancashire.
Whilst some claim there is a starkly obvious conflict of interest for Rudd to take part in the decision-making process, the Department of Energy and Climate Change (DECC) could have denied it, but have instead confirmed that the potential reversal of a 2013 decision will be made, not by Rudd, but by Lord Bourne.
New gas storage in the United Kingdom is a crucial piece of the energy infrastructure provision, as recognised by successive governments. Developments have been ongoing, such as the opening of the Holford facility at Byley in Cheshire. Besides new gas storage, there are anticipated improvements for interconnectors with mainland Europe. These are needed for raising the volume of Natural Gas available to the British market, and for optimising Natural Gas flows and sales in the European regional context – a part of the EC’s “Energy Union”.
An underlying issue not much aired is that increased gas infrastructure is necessary not just to improve competition in the energy markets – it is also to compensate for Peak Natural Gas in the North Sea – something many commentators regularly strive to deny. The new Conservative Government policy on energy is not fit to meet this challenge. The new Secretary of State has gone public about the UK Government’s continued commitment to the exploitation of shale gas – a resource that even her own experts can tell her is unlikely to produce more than a footnote to annual gas supplies for several decades. In addition, should David Cameron be forced to usher in a Referendum on Europe, and the voters petulantly pull out of the Europe project, Britain’s control over Natural Gas imports is likely to suffer, either because of the failure of the “Energy Union” in markets and infrastructure, or because of cost perturbations.
Amber Rudd MP is sitting on a mountain of trouble, undergirded by energy policy vapourware : the promotion of shale gas is not going to solve Britain’s gas import surge; the devotion to new nuclear power is not going to bring new atomic electrons to the grid for decades, and the UK Continental Shelf is going to be expensive for the Treasury to incentivise to mine. What Amber needs is a proper energy policy, based on focused support for low carbon technologies, such as wind power, solar power and Renewable Gas to back up renewable electricity when the sun is not shining and wind is not blowing.Academic Freedom, Assets not Liabilities, Be Prepared, Big Picture, British Biogas, Burning Money, Carbon Commodities, Conflict of Interest, Corporate Pressure, Dead End, Demoticratica, Direction of Travel, Disturbing Trends, Energy Autonomy, Energy Change, Energy Insecurity, Energy Revival, Extreme Energy, Fossilised Fuels, Freemarketeering, Green Gas, Green Power, Growth Paradigm, Hydrocarbon Hegemony, Low Carbon Life, Mad Mad World, Major Shift, National Energy, National Power, Natural Gas, No Pressure, Nuclear Nuisance, Nuclear Shambles, Oil Change, Paradigm Shapeshifter, Peak Energy, Peak Natural Gas, Peak Oil, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Renewable Gas, Renewable Resource, Resource Curse, Resource Wards, Revolving Door, Shale Game, Social Chaos, Social Democracy, Solar Sunrise, Solution City, The Data, The Price of Gas, The Price of Oil, The Right Chemistry, The War on Error, Unconventional Foul, Ungreen Development, Unnatural Gas, Utter Futility, Vain Hope, Wasted Resource, Wind of Fortune
Posted on May 25th, 2015 No comments
The UK Government’s so-called Department of Energy and Climate Change (DECC) is a complete misnomer : for example, a very large proportion of its budget is expended on anti-energy – the decommissioning of end-of-life nuclear power plants and the safe disposal or reprocessing of the radioactive waste and radioactive spent nuclear fuel. This department needs to be broken up in my view, mainly because key policy and budgetary aims are conflictual, and poor choices in expenditure could be precipitated as the Treasury is insisting on further central budget cuts. Additionally, the new Conservative Government is showing signs of continuing with the plan to support the mining for shale gas and shale oil onshore in the UK, and this is neither an energy policy nor a Climate Change policy.
First of all, I propose a Department for Nuclear Decommissioning, or DNUDE. The main reason for this is that this function has little to do with the production of energy, and has more to accomplish as the safeguard of public health and safety, not to mention national security, in the years ahead. Cuts to this department should be kept to a bare minimum, as nuclear decommissioning is a vital task. Misspending and mismanagement in this area is legendary, so focusing on these activities separately to the other DECC functions could help channel the proper attention to expenditure, contracts and the right choice of engineering solutions. This department could also assist with the shelving of plans for new nuclear power plants, which are becoming increasingly unworkable, as it becomes patently obvious that the nuclear engineering industry is unfit to deliver.
Next, I propose a Department of Low Carbon Initiatives, or DLOCIN. Going on past form, very little is expected to be spent by the new Conservative Government on clean, green technology, energy conservation, and renewable energy. Paying for renewable energy is going to be shunted onto power consumer bills, and the Government expects energy and engineering companies to use capital expenditure to invest in new low carbon power plants and other low carbon installations. DECC has not been a Department for Energy, it’s been a Department for Markets in Energy : but with the budgetary cuts ahead, all of that will die. DLOCIN could be a preppy, chirpy, communications-focused department, with obviously little money to spread around and lots of website graphics in bold colours. One thing they could usefully do is promote energy efficiency, whilst not actually spending any money, something the previous Government Coalition of the Conservatives and Liberal Democrats showed via the Green Deal could be magnificently effective in not achieving much in the way of energy efficiency at all.
Then, I suggest the UK Government should have a Department of Fossil Fuels or DOFFF. It should be made obvious by this separation that new energy resources that come out of the ground, such as shale gas and shale oil, and new North Sea petroleum and Natural Gas are not a solution for Climate Change. Having shale gas exploitation pushed by the existing Department of Energy and Climate Change or DECC is deeply cognitively dissonant, and such conflicts should be removed. DOFFF should be planted in the UK Treasury, as there is a symbiotic relationship between fossil fuel production and central taxation. The North Sea is depleting, and onshore oil and gas could take decades to ramp up. As the UK Government gets increasingly desperate to stimulate fresh UK production of oil and gas, the Treasury will be offering juicier and fruitier sweeteners, in the form of tax breaks, loans and other financing instruments. Additionally, as it becomes clearer that the UK is becoming increasingly dependent on imports of oil and gas, DOFFF will need to be under the wing of the Ministry of War, sorry, I mean the Ministry of Defence, as the UK starts to deploy troops to maintain access to vital fossil fuel resources in any country that can supply them. An added bonus of cleaving DECC to produce DOFFF will be that the moribund coal industry can be hooked into it, preventing it from draining resources and patience from other departments.
Finally, I suggest the UK Government should merge its Climate Change functions into what is now known as Defra – the Department for Environment, Food and Rural Affairs. Why ? Because with this Conservative Government, acting on Climate Change is going to be pared down to contingency and adaptational responses, such as dredging rivers and repairing flood defences.
The UK Government would end up without any Department for Energy – apart from the teetering antiquated fossil fuel section. It would also end up without a Department clearly committed to action on Climate Change. At least this would be more honest and truthful than keeping the E and CC in DECC.
Posted on April 8th, 2015 No comments
Hello, hello; what have we here then ? Royal Dutch Shell buying out BG Group (formerly known as British Gas). Is this the start of the great transition out of petroleum oil into gas fuels ?
Volatile crude petroleum oil commodity prices over the last decade have played some undoubted havoc with oil and gas company strategy. High crude prices have pushed the choice of refinery feedstocks towards cheap heavy and immature gunk; influenced decisions about the choices for new petrorefineries and caused ripples of panic amongst trade and transport chiefs : you can’t keep the engine of globalisation ticking over if the key fuel is getting considerably more expensive, and you can’t meet your carbon budgets without restricting supplies.
Low crude commodity prices have surely caused oil and gas corporation leaders to break out into the proverbial sweat. Heavy oil, deep oil, and complicated oil suddenly become unprofitable to mine, drill and pump. Because the economic balance of refinery shifts. Because low commodity prices must translate into low end user refined product prices.
There maybe isn’t an ideal commodity price for crude oil. All the while, as crude oil commodity prices jump around like a medieval flea, the price of Natural Gas, and the gassy “light ends” of slightly unconventional and deep crude oil, stay quite cheap to produce and cheap to use. It’s a shame that there are so many vehicles on the road/sea/rails that use liquid fuels…all this is very likely to change.
Shell appear to be consolidating their future gas business by buying out the competition. Hurrah for common sense ! The next stage of their evolution, after the transition of all oil applications to gas, will be to ramp up Renewable Gas production : low carbon gas supplies will decarbonise every part of the economy, from power generation, to transport, to heating, to industrial chemistry.
This is a viable low carbon solution – to accelerate the use of renewable electricity – wind power and solar principally – and at the same time, transition the oil and gas companies to become gas companies, and thence to Renewable Gas companies.Academic Freedom, Be Prepared, Big Picture, Carbon Commodities, Change Management, Corporate Pressure, Design Matters, Direction of Travel, Energy Change, Energy Crunch, Energy Insecurity, Energy Revival, Extreme Energy, Feel Gooder, Fossilised Fuels, Fuel Poverty, Green Gas, Growth Paradigm, Hydrocarbon Hegemony, Hydrogen Economy, Low Carbon Life, Major Shift, Marine Gas, Marvellous Wonderful, Methane Management, Money Sings, Natural Gas, No Blood For Oil, Oil Change, Paradigm Shapeshifter, Peak Emissions, Peak Oil, Petrolheads, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Resource Wards, Solar Sunrise, Solution City, Tarred Sands, Technofix, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, Transport of Delight, Unconventional Foul, Unnatural Gas, Western Hedge, Wind of Fortune, Zero Net
Posted on April 7th, 2015 No comments
Looking into the nuclear power industry can be like peering into a murky bucket – through a pail, darkly. Whilst I’m waiting for an answer to my Freedom of Information request about nuclear power generation in the United Kingdom, because EdF Energy won’t tell me themselves, I have been instead trying to get some information from EdF Energy about the St Jude’s storm of October 2013.
7th April 2015
You mentioned St Jude so to give you a feel of how we communicate information for something like this, we send out a note to newswires every time a station is offline, whether planned or unplanned.
In the case of St Jude, the station was taken offline due to debris from the storm causing a loss of power to the site. It was absolutely not connected to any form of flooding.
Our first statement is copied below
“Dungeness B automatically shut down both reactors after power to the site was cut off. The units are safely shutdown and the site’s own generators are providing power to the site post shutdown. The station is liaising with National Grid regarding returning the power supply.”
And we provided a further update here: http://newsroom.edfenergy.com/News-Releases/Dungeness-B-offline-bb.aspx
And later on another update here: http://newsroom.edfenergy.com/News-Releases/Dungeness-B-update-bc.aspx
A few days later we issued a background note to explain in further detail what had happened.
Throughout the day on 28 October we gave numerous TV and radio interviews to explain the nature of what had happened. As above – it was not related to any flooding or water ingress – a piece of debris stopped power to the site and as a precautionary measure the reactors were taken offline.
There’s plenty of information available online. We publish regular updates on our website and I would recommend you exploring websites such as DECC and ONR who publish a quarterly update for any further information.
Good luck with your research
Thank you for your reply.
In the “background note” of 31st October 2013 :-
Most of the information given is background information, and does not
convey information about what happened between 27th October 2013 and
when the two nuclear reactors and their power generation turbines came
By the way, the use of the expression “single failure” in this
sentence does not make sense : “The on-site electrical distribution
systems are capable of performing essential safety functions even if a
single failure occurs.”
There is only one statement that indicates what actually took place :
“If loss of off-site power happens – as it did on October 28 – the
power station is capable of operating independently until grid
connections are restored.”
This is not the level of detail that answers my request for a formal
report of what happened.
(a.) Deliberate shutdown or “trip” shutdown ?
It is not clear from this background note whether the nuclear reactors
were shut down deliberately through intervention, or as a result of a
“trip” from rapidly changing power conditions experienced at the
“shared turbine house” (power island).
Just as there is safety control equipment which should start up
on-site diesel power generation automatically should the external
connection to the National Grid be lost (“There are several sets
(groups) of diesel powered generators designed to provide power to
safety critical systems, which will automatically start when the grid
connection is lost.”), I would expect safety control equipment should
be in place to shut down the nuclear reactors automatically should
power not be available or the power supply is fluctuating rapidly.
These two general statements are made, but it is not possible to
determine which was the particular case : “The decision is always
taken to shutdown the reactors if the site loses grid connection,
electricity is then provided by the on-site diesel generators which
power the essential on-site plant.” and “With delivery of consumables
to site, successful post trip cooling of the reactors can be
So, what was the actual order of events ? I expect there were some
problems with the supply of power from the National Grid (owing to the
“debris” mentioned). I expect that what happened next was that the
emergency on-site diesel generation equipment started up
automatically. I don’t know, and I am not told in your “background
note”, whether all of this equipment started up correctly. I don’t
know, as your report does not say, whether the on-site power
generation was successful in generating enough power to keep the
carbon dioxide coolant pumps for both nuclear reactors in operation. I
don’t know, as your report does not say, whether the nuclear reactors
were shut down automatically, or as the result of a station management
(b.) Diesel and water supplies
The “background note” does not state whether there were sufficient
supplies of water and diesel fuel on site to last for 24 hours or
longer. It also does not say how much diesel fuel and water needed to
be brought on-site for the remainder of the shut down period until
first one and then the second nuclear reactor were brought back
(c.) Nuclear reactor start up
The “background note” does not state the reasons for the time it took
to get the nuclear reactors restarted. For example, were the coolant
pumps (the physical pumping equipment or the electrical equipment)
damaged in the incident ?
These details would be most useful to know.
Posted on April 2nd, 2015 1 comment
Nuclear power is the favourite “silver bullet” to many UK Government officials in the Department of Energy and Climate Change (DECC) – a solution for climate change, energy security, and fingers crossed, for the price of electricity. So why isn’t the data on nuclear power generation more readily available ? Surely the future is predicated on the past ? Surely future assumptions need to be projected from past performance ? So why do we only hear stories of mythical unicorns (as yet unbuilt plant) rather than kilowatt hours per month, per nuclear power plant, per reactor/turbine combination, stretching back in time ? I mean, we get summaries, but not details; annual, not monthly, collected totals, but not specifics. This coarse-grained data is not sufficient for a decent analysis. We can compare year-on-year, but not power plant by power plant, month by month.
Time for another Freedom of Information request.
To: “Freedom of Information Requests, Department of Energy and Climate
Information Rights Unit
Department for Business, Innovation & Skills
1 Victoria Street
31st March 2015
Request to the Department of Energy and Climate Change
Re : Nuclear Power Generation in the United Kingdom
I am researching the potential for existing and planned nuclear power
plants (NPPs) to contribute to the future electricity needs of the
In accordance with the Freedom of Information Act of 2000, please
could you send me any and all electronic/digital documents, Internet
hypertext links to electronic/digital documents, or other
electronic/digital material bearing information relating to the
questions below :-
1. The history of atomic energy in the United Kingdom
Please could you provide me with month-by-month data of :-
(a) The actual electricity generation (in gigawatt hours (GWh)) and
(b) The power generation capacity (in megawatts (MW))
of each individual nuclear power plant nuclear reactor and each
nuclear power plant power generation turbine, for the years from first
power generated by the NPP to the present day. This data should
include NPPs and nuclear reactors that are shut down, and those in the
process of being decommissioned.
2. Lifetime extensions on nuclear reactors
Please could you provide me with a list of work done, or planned to be
done, to enable the lifetime extension of each nuclear reactor and NPP
in the United Kingdom.
3. Anticipated nuclear reactor decommissioning dates
Please could you provide me with up-to-date information about the
anticipated dates of final shutdown of each nuclear reactor at each
NPP in the UK.
4. New build
Please could you provide me with an up-to-date list of new nuclear
reactors and new NPPs that are under construction, and their
anticipated date for first power generation. The data should include :
the power generation capacity (in MW) according to design, the actual
electricity generation (in GWh) according to design, and the
anticipated date of final shut down and decommissioning.
Thank you for your attention to my request for information.
Posted on April 1st, 2015 No comments
I am tired of repeatedly having the same conversation about nuclear power.
Them: “Nuclear power plants generate 20% of Britain’s electricity.”
Me: “But that’s less than 10% of all the energy consumed in the UK.”
Them: “Nuclear power is a reliable provider of electricity.”
Me: “But unplanned outages at nuclear power plants generally increase with age.”
Them: “Nuclear power is experiencing a renaissance.”
Me: “But globally, there are less than 75 nuclear reactors under construction, compared to a total world fleet of 435, and most of them are over 25 years old…”
Lots of people believe that nuclear power is “boom town” in Britain, and yet I know from looking at some of the numbers and projections that there is a risk that new nuclear reactors may only be replacing old nuclear reactors – at the end there would not be more nuclear power than there is now. And more : that there is also a risk that most of the current nuclear reactors could be shut down for decommissioning before their replacements could be ready.
What, I wondered, could I produce as a projection of nuclear power in the UK ? What numbers and figures would I need to plug into a model of nuclear generation in Britain ? It’s a bit pointless trying to uncover reality by looking at annual totals of electricity generation from nuclear power plants. To really understand what is happening, and what the trends are, and the prospects for the future, I would need to have more fine-grained data. So I set off in search of some. First port of call : EdF Energy (the UK wing of Électricité de France).
26th March 2015
I am an Associate Research Fellow with Birkbeck, University of London,
and I’ve just completed writing a work on low carbon gas – or
Renewable Gas, as I’m calling it.
I still haven’t worked out what my next project is, but in the
meantime, I’m looking at various numbers in the energy sector in
general, and blogging and Tweeting :-
With today’s announcement on Energy Trends from the Department of
Energy and Climate Change, questions are circulating about the
performance of various energy resources :-
So far, I have been able to find :-
1. Data about total electricity generation from nuclear power each
year (gigawatt hours (GWh), terawatt hours (TWh)) – for example in the
Digest of UK Energy Statistics (DUKES), Table 5.1 “Commodity balances”
2. Data about the generation capacity of the total of nuclear power
plants, and individual nuclear power plants (GW, MW) – for example,
DUKES table 5.10 “Power Stations in the United Kingdom”, and the
current status of each EdF nuclear power plant online :-
3. Data about the total lifetime generation of power from nuclear
power plants that have been shut down – NDA “Lifetime Plans” series
from 2006, and overall plan from 2013 (TWh) :-
4. Historical data about nuclear power plant electricity generation
in the UK – DUKES Table 5.1.1 “Fuel input for electricity generation”
(Mtoe which can be converted to TWh) :-
What I cannot seem to find is historical data about the annual power
generation of individual nuclear power plants in TWh – in other words,
the annual electricity output for each reactor-turbine combination
over the last 25 or so years.
I’m wondering if EdF Energy could help point me to published data of
1st April 2015
I just tried calling – XXXXXXXXX passed your query on to me. We don’t publicly release generation from individual power stations as that information is commercially sensitive.
Sorry we can’t help – you seem to have found all the data that I would have pointed you to anyway – but do get back in touch if there’s anything else.
1st April 2015
Many thanks for getting back to me on my question.
It seems strange to me that EdF Energy consider the productivity of
their assets as “commercially sensitive” – since almost every other
piece of data about the company is contained in corporate financial
accounts, generally available to the public. I would have thought this
data on generation would be very important to your shareholders, but
perhaps they are more concerned about dividends and profits than the
actual flow of electrons.
I am not going to speculate on what that could suggest or imply. EdF
Energy clearly need to report this data to HM Government, as the
annual total of nuclear generation is included in statistical reports,
although I need more fine grain for my research. I decided that I
might need a backup plan to acquire this data, so I need to let you
know I have submitted a Freedom of Information request to DECC.
I consider EdF Energy’s reply to my request as unhelpful, and I shall
be noting it to my colleagues.
Thanks for your response and good luck with your research. Please keep in touch as I’m sure there is lots of information we can help you with if we have it available. I should have sent you this link to our monthly update to the stock market which gives total nuclear output for each month, but doesn’t break it down site by site.
Hope that helps
Thank you for the link to your monthly update to the London Stock Exchange.
I’m sure that would be useful for the average investor, but I need to
know about the performance and status of individual atomic reactors
and their generation turbines on a month-by-month basis, as I am
hoping to understand the viability of each nuclear power plant by
looking at trends, especially trends in outages (planned and
I am hoping to be able to find some data on outages (for example, due
to accidents) through the monitoring bodies, but this would not be
appropriate for understanding all outages and their underlying causes.
For example, I cannot find a detailed report on what happened at
Dungeness during the night of the St Jude’s storm in October 2013. The
only details I have been able to scavenge are one-liners from EdF
Energy and vague paragraphs from the press, plus circumstantial
evidence from other lines of enquiry. Considering the prior ONR [Office
for Nuclear Regulation] reports on water ingress at the power
plant, and the beach repair in the following months, I consider more
detail on this particular outage to be important to explain. If this
were not also “commercially sensitive”, it would be useful to me to
see an executive-style report of this outage.
We’ll see what happens next…
Posted on March 24th, 2015 No comments
This evening I attended an interesting meeting hosted by the Energy Institute, and held at the Royal College of Nursing in Cavendish Square, London. The speaker for the event was Dr Scott Milne, of the Energy Technologies Institute (ETI), who introduced us in a “meet the public” way to the recent launch of two sample scenarios for the future of Britain’s energy : “Clockwork” and “Patchwork” from the ETI’s Energy System Modelling Environment (ESME).
What follows is me typing up my notes that I made this evening. It is not intended to be a literal or verbatim, word-for-word record of Dr Milne’s words, as I took the notes longhand and slowly. Where I have put things in square brackets ( [ ] ), they are my additions.
[ Before the talk, I chat with somebody whose name I didn’t catch, who in all honesty asked me whether I thought fusion nuclear energy would be a likely energy technology choice by 2050. ]
So, what is the ETI ? It’s a public-private partnership, aimed at de-risking various technologies and technology families. We receive funding from BP, Shell, EdF, Caterpillar, Rolls-Royce […] We have a large number of stakeholders who take the work we put out for tender to be done. We aim to build internally-consistent models – using “exogenous assumptions” [ externally-imposed ]. We have about 250 profiles in the model – costs are added in. The ESME modelling is policy-neutral – unless where we intervene to state otherwise – for example, to say no nuclear power, or Carbon Capture and Storage (CCS) to be applied later rather than sooner. Our starting point is existing stocks of energy installations as of 2010, which are gradually retired out, and we are subject to supply chain constraints in replacing them. How quickly can we deploy new solutions ? We have a “spatial disaggregation” in the model – with 12 separate regions of the UK. We have offshore nodes, and storage points, and carbon dioxide capture and storage is pushed offshore. Our modelling is not as finely detailed as the National Grid’s power dispatch model. We have seasons, and five parts of a day – a model suitable for load balancing purposes. We assume a 1-in-20 risk of a cold snap – a “peak day” of consumption. There is a probabilistic element for each technology on cost, and the modelling is done using the Monte Carlo method (repeated random model runs). This helps us to identify which technologies are optimal. Our partners DECC (Her Majesty’s Government Department of Energy and Climate Change) and CCC (Committee on Climate Change) are users of the model, and the model provides an evidence base for them. The low carbon energy research models (ESME) are used by some academic groups. We came public with these for the first time this year, and we launched on 4th March 2015.
In the “Clockwork” scenario, transport continues to be liquid fuel options as we have today, and using carbon offsets from elsewhere in the energy system. There are a few things we need to believe as part of this scenario. We need to accept the “negative emissions” possibilities of Carbon Capture and Storage combined with biomass (Biomass+CCS) – this is still certainly open to question. By 2050 there should be ultra-low carbon vehicles. These two scenarios “Clockwork” and “Patchwork” are not extremes as in some modelling done elsewhere – they are more balanced between the two. The “Clockwork” scenario is not about decisions made at the household level – whereas “Patchwork” is – it involves engagement from householders, and includes influences and constraints besides decarbonisation – for example, the cost of energy and air quality. In the “Patchwork” scenario there is a limited role for biomass in space heating, and you see a greater push for low carbon transport. Plus, space heating is decarbonised in parallel [ partly through demand reduction ].
In “Patchwork” there is less central governance. You see experimentation in different regions, and only at the end see which technologies have been picked. There is a stronger burden on households in “Patchwork”, and more emphasis on renewable energy. Coal is switched off in both scenarios by 2030, and it is not replaced by coal-with-Carbon-Capture-and-Storage (Coal+CCS) but with Natural-Gas-with-Carbon-Capture-and-Storage (Gas+CCS). In the “Clockwork” scenario there is still a role for renewable energy, but not so significant. Hydrogen gas turbine generation takes over the “peaker plant” (on-the-spot generation at peak demand) role from Gas+CCS. The hydrogen comes from Biomass+CCS. There is large scale geological storage of hydrogen. In the “Patchwork” scenario, offshore wind plays a major role – the model assumes that the land available for onshore wind is capped (that’s a choice). Solar power is also a big factor in “Patchwork”, but still making a fairly modest contribution by 2050. Also, there is an assumption that biomass contributes directly for power generation. In the “Patchwork” scenario, solar power makes a major contribution to capacity (gigawatts) but less to generation (terawatt hours).
As regards space heating (the heating of the insides of buildings) : in the “Clockwork” scenario, heat pumps make a major contribution – and there are big step changes in the final decades compared to “Patchwork”. Gas boilers are being built for the 1-in-20 year cold snaps – but not for the home [ – for district heating ]. There is a high demand for heat in the “Clockwork” scenario – where householders are “comfort takers” and homes may be heated to 21 degrees Celsius. In the “Patchwork” scenario, people have more engagement with the management of energy, better at managing their use of energy at home, and so less heat is used. There is a strong role for retrofits [ for insulation for energy demand reduction ] behind the scenes. Population continues to grow and the number of individual households continues to grow.
As regards transport : Heavy Goods Vehicles (HGV) and Light Duty Vehicles (LDV) are important (although the graph only shows cars). In “Patchwork” there is a move towards urban living – and so people will be thinking more about how transport can be done – car pooling and car sharing. In “Clockwork”, we are seeing aspirations – people flash the cash – and pay more to do more. The Biomass+CCS carbon dioxide emissions offsets create more headroom for transport emissions in “Clockwork”. The model could explore lowering demand for transport – through a shift to gas from liquid fuels – fuel/gas hybrids actually [dual fuel]. There are implications for liquid fuel – significant in both cases. There are therefore implications for fuell stations – for example, if cars are coming to the forecourt less often for fuel because of vehicle fuel use efficiency. We need to maintain the liquid fuelling infrastructure – but we need electric vehicle charging and give hydrogen refuelling infrastructure as well. There is quite an overlap in investment. Even if we stop selling liquid fuel vehicles, they will stay on the road for some time – we assume 13 years.
In terms of what it means – in terms of cost compared to its fossil fuel “dark cousin” [ business as usual trajectory ] : “Patchwork” works out to be more expensive – these graphs show capex only [ capital expenditure on investment in assets and infrastructure ]. For “Patchwork” [ although capex is higher ], the resource cost is less [ owing to more renewable energy being sourced. ] These graphs give an idea of when money needs to be spent and how much – it’s not insignificant [ between 1.4 and 1.6 % of GDP ? ] To make the investments, buildings and space heating could be considered infrastructure [ and need central spending ? ] The costs of transport are heavier in “Patchwork”. Both have “negative emissions” (from Biomass+CCS). By having “negative emissions”, you are allowed to have some of these fossil fuel options. This is important as air travel and shipping will need fossil fuels. You cannot fly aeroplanes on hydrogen, for example. The outlook for industry takes a bit more explaining.
Taking action over the next decade is a no-regrets option. We need to replace energy installations – replacing them with low carbon options gives only a marginal extra cost. We lose very little by hedging – even if carbon action doesn’t take place. Developing the technologies enhances export capability – at least we will not be an importer. If we wait to implement low carbon technologies, we have less time for the transition. This model operates over a timescale of 35 years. Development of the technologies will involve some degree of redundancy [ not all developments will be useful going forward ], but we need to prove them up, cost them out. If we wait until it is clear we must act, we will have to jump to things that are not yet costed up. If there are no technological solutions worked out, we might have to slash energy demand – which would politically be very challenging – you can imagine how people would react to having a cap on the energy they are permitted to use at home. If we attempt to make an 80% reduction in carbon dioxide emissions later on, we will have higher cumulative [ overall ] emissions – and as a result we would need tougher carbon emissions cuts.
Things we have concluded from this modelling : we are not yet at a stage where we need to say definitively what needs to be used, for example, decide for nuclear power, CCS etc. Biomass+CCS is challenging – there are questions around the lifecycle carbon dioxide emissions. But if we don’t have it, it doubles the abatement cost. We have shown that a high level of intermittent renewable energy in the power sector is quite manageable – we can use the excess in renewable electricity generation for building up renewable heat – for example hydrogen electrolysis for hydrogen production [ “Power to Gas” or “WindGas” ] – which is not modelled. We hope these two scenarios can be a starting point.
[ Questions and Answers ]
[ Question from the floor ]
[ Answer from Dr Milne ] …For solar power we assumed the lowest cost profile. There are various studies for LCOE – Levelised Cost of Energy [ Levelised Cost of Electricity ] – they are not showing wider system integration costs – for example, the extra storage needed [ for excess generation that needs to be stored somehow for later use, when the sun has set ]. “Counterfactuals” – is this useful in this case or that case or … ? Model a whole range of scenarios around that.
[ Question from William Orchard ] Results all depend on assumptions in the models. How doees it treat waste fossil heat [ heat from burning fossil fuels for power generation at centralised power plants ] ? The European Union treats renewable heat dumped in the sea as renewable [ ? ] but considers waste heat in […] as non-renewable – the difference is significant. It also depends on your COPs [ coefficient of performance ] in district heating networks. Did you model nuclear reactor CHP [ combined heat and power ] ? What COPs did you use for the heat networks ? How did you treat biomass emissions ?
[ Answer from Dr Milne ] We don’t have to consider what the EU thinks. We do have an option to meet the RED targets [ Renewable Energy Directive ]. Waste heat from large scale power plants plays a huge role in our model – free heat. We build pipelines to link waste heat sources to networks. Question – how to build the heat network ? We need to justify building big pipelines to transport heat. [ Why not transport the heat in the form of gas ? That is, use the waste power plant heat to manufacture gas to distribute to local CHP schemes via a much smaller pipeline than a heat pipeline would need ? ] For Biomass CHP, we considered a range of scales. We gave it a 92% carbon credit. We also have biomass imports in the scenario – a 67% carbon credit. It’s a “pump”. Do we think we can ? We take an off-model view first of all and then apply it to the model.
[ Question from the floor ] This work is well overdue. Thank you for doing it. You say you will change from coal to gas. Why are you not considering more offshore wind – you can expect to bring on nuclear power more slowly ? I’m worried when you put in 60 more years of gas when you put Gas+CCS in. Have you considered fracking [ for shale gas ] ?
[ Answer from Dr Milne ] In the “Clockwork” scenario, it relies on [ strong early development in ] nuclear and CCS mostly – there is a stronger role for renewable energy in “Patchwork”. “Patchwork” is the more moderate speed [ of development of nuclear power and CCS ] as old capacity retires – this is why there is a role and space for other technologies. What the model wants is gas – but it’s not saying where that gas is coming from.
[ Question from the floor ] Have you put any cap on gas ?
[ Answer from Dr Milne ] The only new gas built is CCGT+CCS (Natural Gas-fired Combined Cycle Gas Turbine plus CCS). As you get more [ stringent carbon controls ] will need hydrogen turbines.
[ Question from the floor ] What are the key parameters that break the model ? That you can’t do without ?
[ Answer from Dr Milne ] Biomass+CCS for sure. If you make a lot of assumptions – such as no extra energy demand – then yeah, we’ll be fine. Otherwise, we need Biomass+CCS.
[ Question from the floor ] Where do you get your metrics from ? Isn’t District Heating less efficient than people say ? Isn’t there an anti-competition issue – as District Heating is a single source of supply ? And what about the parasitic loads ? And what happens if there’s not such a big demand for heat [ for example, due to high levels of building insulation ] ?
[ Answer from Dr Milne ] We used central projections from government – we test the cost of energy. Our members used to build some of this stuff. We replace data sets with studies – more independent sources. We have diversified out data set over time. The District Heating networks – it will need a different way of doing markets. It may not be policies that stop you… We assume that 90% of the housing stock remains – we see “difficult households” – not “low-hanging fruits” [ ripe for change ]. We envisage these will need complex packages – if you think it’s going to be received. We need to work this up more.
[ Question from the floor ] Have you calculated the carbon emissions ?
[ Answer from Dr Milne ] Zero or negative. The power sector is 100% de-carbonised by 2030. I can get the figures from our database – gCO2/kWh
[ Question from William Orchard ] MARKAL (previously favourite energy modelling tool) was not fit for purpose for modelling heat networks… MacKay…
[ Answer from Dr Milne ] MARKAL has been shelved, replaced by UK-TIMES…
[ Question from William Orchard ] …fundamentally has the same problem as MARKAL – uses the same algorithms. It wasn’t able to generate appropriate answers to the question of whether it was cost-effective to build heat networks…
[ Answer from Dr Milne ] We use the Biomass Value Chain Model (BVCM). This is new and includes hydrogen and CCS. We include the “tortuosity factor” (kinkiness) of pipeline layout. We model 9 types of buildings. With a hydrogen network – would you want to start small, for example with distributing cannisters… ?
[ Wrap up ]
Posted on March 23rd, 2015 No comments
At a presentation I recently gave at Birkbeck, University of London, I introduced the British situation as regards Natural Gas production, consumption and the consequent trend towards import dependency – within the context of import dependency for all energy use in the UK :-
There are several reasons why a continued dependency on imported Natural Gas is a risk to the British economy. First of all, it makes the economy dependent on the commodity price of Natural Gas. Should there continue to be a continued uptake in the use of Natural Gas in most regions of the world (and this is likely to be the case), this could put pressure on the commodity prices for Natural Gas, a significant factor in economic development that would therefore be out of the control of the British Government. Should the global commodity price for Natural Gas remain relatively low (and this is quite likely to be the case), this would benefit the UK economy. However, there is a risk that Natural Gas commodity prices could climb appreciably. If this were to happen, the UK economy would have to bear the brunt of higher energy prices, and the UK Government would have no control over the cost of one of the key energy flows into the economy.
Although the global supply of Natural Gas is likely to be healthy for the next 20 years, the price of Natural Gas could change in impactful ways. So – likelihood of scarcity ? Small. Negative economic impact outside of control ? Possibly.
The temptation would be to avoid major energy projects and just rely on Natural Gas by default. However, this carries a small but not negligible risk of supply constraints, and a larger risk of economic damage from uncontrollable prices.
So where is policy on this ?
I have been taking a little look at the output of the Energy Technologies Institute (ETI) and their modelling tool ESME (Energy System Modelling Environment). They have recently launched their summary of their “Clockwork” and “Patchwork” scenarios. Their modelling could be expected to reflect UK Government energy policy fairly accurately, so it’s interesting to see the results :-
In the “Clockwork” scenario, there is a heavy emphasis on nuclear power – the total generating capacity is expected to be 40 gigawatts by 2050. What needs to be understood is that this requires at least 40 + 16 = 56GW of new build nuclear power plants, as the current 16GW in operation is all expected to need decommissioning in the 2020s. Considering the battle to sign off just 3.2GW for Hinkley Point C in England and another 3.2GW for Sizewell C in England, and a further 5.4GW at Wylfa, in Wales, this could be a significant challenge. The companies that are being asked to build and finance these new power plants may not be sufficiently stable to complete these mega-power projects. In addition, there are legal challenges to the state subsidies being offered for new nuclear power, and questions still not answered about the liabilities of the end of life of nuclear power plants, including the disposal of radioactive spent nuclear fuel and radioactive waste.
So, even if policy does proceed like clockwork, there is a risk to this strategy – and that risk is the default dependency on Natural Gas, resorting to the use of Natural Gas, should the nuclear power plants not come online.
In the “Patchwork” scenario there is a massive dependence on offshore wind power, and although the support structures for this to happen are more secure than for new nuclear power, there is a danger that government subsidies for new nuclear power could crowd out investment in true low carbon renewable energy, including offshore wind power. Again, in this scenario of patchwork energy sector development, the default position would be Natural Gas, if the offshore wind power could not be brought online for reasons of initial financing or resistance from recalcitrant actors, such as disbelievers in renewable electricity that still occupy positions of influence. A continuing high dependence on Natural Gas would leave the country open to risks of economic and energy insecurity.
The truth is probably that neither “Clockwork” nor “Patchwork” reflect the future accurately, and I would suggest that since Natural Gas is likely to be the “fallback” position, this backstop needs supporting – with the development of Renewable Gas.