Posted on November 26th, 2015 No comments
For once, I agree with George Osborne.
Well, for twice, actually.
In his Autumn Statement of the state budget, he reversed a painful austerity measure aimed at the lowest paid workers, by performing a U-turn on removing tax credits.
And, perhaps more importantly, not in the Autumn Statement, he cancelled the Carbon Capture and Storage demonstration subsidy. I completely applaud this decision. Apart from the speed at which it was enacted.
George Osborne did a number of other things in his Autumn Statement that I definitely do not agree with – such as converting student nurse grants into loans – which shows the most appalling lack of judgement, as it will deter just the trainees the National Health Service really needs.
Without more nursing staff on the front line of hospital health care, nothing will improve, no matter how many middle managers you employ. But anyway, back to energy…
For some reason, the news that the Carbon Capture and Storage (CCS) “competition” money, formerly ringfenced, had been axed, was not included in the Autumn Statement. It was “snuck out” on the London Stock Exchange website, and I cannot find a mention of it yet on the Department of Energy and Climate Change website. Curious.
What’s not curious in the slightest is the racket of the complaints against this decision. Which is to be expected, as a great many engineers and researchers have been relying on this very cash injection for their careers in carbon capture.
Many politicos have been “captured” by CCS along the way, and their resentment is shrill today. Caroline Flint, in particular, should know better than to support CCS – she should look at the numbers, the history, and follow the money…
There is an almost desperate misunderstanding about exactly how poor “value for money” the current CCS technologies are. This is because they are being applied to power generation plant, where the thermodynamics are against the efficient capture of carbon dioxide, because capture would need to be done behind combustion in most configurations.
What is really needed is to go back to basics – chemistry and physics basics – and go back in time to the research done by earlier industrial gas engineers, terminated in the 1980s because of the discoveries of abundant (but not infinite) Natural Gas.
Carbon capture in industrial gas processing has options that are relatively efficient compared to capturing carbon dioxide at low temperatures and low pressures in a venting stack on the back of a power plant.
As one colleague of mine said (to paraphrase slightly), “The government have been pushing carbon capture in the power sector – but this is exactly the wrong place for it to be done. We in the gas industry, we want carbon capture back, please.”
However, carbon capture in gas-related industries, in order to make it truly efficient, both energy-efficient and resource-efficient, and also carbon-efficient too, it needs to be CCU, not CCS, in other words Carbon Capture and Utilisation.
Carbon recycling in integrated gas systems will allow us to manufacture very low carbon and sustainable Renewable Gas, even as fossil fuels deplete or become too chemically complex to permit us to burn them.
Posted on November 20th, 2015 No comments
The week before last, I attended the Parliamentary Renewable and Sustainable Energy Group (PRASEG) and Energy Networks Association (ENA) event entitled “Gas – Delivering for Customers and Supporting the Low Carbon Economy“.
There were a number of interesting presentations, but I was most encouraged by that from Lorna Millington, Design Manager in Network Strategy for National Grid. The title of her presentation was “Delivering Renewable Gas”, and at first I thought she was going to talk about what other companies are doing, and how National Grid can assist them. But as she talked, I realised she was talking about National Grid itself being an integral part of the projects. This kind of tears up the rulebook, I thought to myself, as officially, because of competition issues, National Grid cannot be involved in the production of gas or power, only the distribution of gas and the transmission of power. On reflection, I can see that it is inevitable that National Grid needs to be a central part of the development of the production of Renewable Gas, as it is the building of energy resource manufacturing capability that spans business sectors. Any substitute for Natural Gas injected into the gas grid would need close partnership with National Grid. Any gas waste that was being recycled into Renewable Gas intended for injection into the gas grid would need cooperation with National Grid. There must be some kind of problem defining where National Grid’s responsibilities cease, though, as they needed to spin off a company for the carbon dioxide pipeline plans for the White Rose project : National Grid Carbon Limited (NGC).
Lorna Millington began her presentation by answering a common question posed to her team – Renewable Gas – why is this renewable ? Well, although biogas and biomethane are sourced from biomass, some forms of manufactured gas have non-biomass waste as feedstocks, so this is a valid question. The answer, Lorna said, was to understand that manufactured gas is zero net carbon – in other words – zero additional carbon dioxide (and methane) emissions to the atmosphere. Plants grow, taking up carbon dioxide, and then die and are used as biomass, releasing carbon dioxide, but the net total additional emissions are zero. Of course, when you do a whole life cycle analysis, using some forms of non-biomass waste for gas manufacture are clearly not renewable or sustainable – particularly if they were originally derived from fossil fuels – for example, plastics. However, using non-biomass waste to make energy potentially displaces the use of fossil fuels for energy, so is useful as a step in the decarbonisation of energy, generally.
The other key part to the term “renewable”, Lorna explained, is that manufactured low carbon gas can use the same gas distribution network as Natural Gas. I interpreted this as meaning that since there is no need to replace gas pipelines and storage facilities in developing Renewable Gas, this makes the whole gas infrastructure renewable – or “re-usable”, and current gas grid use “sustainable”. Lorna said that she anticipated new consumers of gas in future – including high pressure ones – and that approximately 25 terawatt hours (TWh) of Biomethane would be gas grid connected by the end of 2015, comprising around 50 projects, bringing Renewable Gas to homes. She said that the only risk to this would be if the rate of return of plant operation was affected. She said there was some uncertainty about the Renewable Heat Incentive (RHI) policy and that this was “stifling markets”.
Lorna Millington said that National Grid is considering the next stage in production – scale. BioSNG – synthetic Natural Gas made from biomass – the difference with the other current techniques for producing gas is the amount of gas we can produce. She noted that the availability of suitable biomass is a key – these BioSNG techniques increase the range of possible feedstocks – they are not able to use some of these in traditional Anaerobic Digestion (AD – used to produce Biogas and Biomethane). Lorna said that with a combination of AD and gasification-based BioSNG production, there is a potential for roughly 100 TWh of gas that can be manufactured – a third of all residential/domestic demand in homes. She said, “We see this as a way of decarbonising heat”. She indicated that Renewable Gas could supply up to a half of residential/domestic gas demand in homes – which would be the case if there is a strong energy demand reduction programme – for example, to vastly increase insulation in buildings.
Lorna Millington emphasised that National Grid Gas is operating within the regulatory framework, and co-operating with Ofgem, in pursuing a BioSNG project, “GoGreenGas”, working with Swindon Council and other partners. She said that the anticipated cost of the first Renewable Gas would be £50 for each megawatt hour (MWh) in 2020, but reduce to £20/MWh within 5 years after that. She said that “This will make gasification the right choice for the UK”, as National Grid anticipate that Natural Gas will cost £24/MWh by then. She said that for this projection to become a reality, the industry needs clarity on the RHI now – providing short-term subsidies. Lorna Millington said that National Grid recognise that BioSNG is likely to be cost-competitive well within a couple of decades and be used for heating and transport in the same form as CNG – Compressed Natural Gas. She said that electric drive is the right choice for urban vehicles – but that there is no right choice for long haul, but that CNG would be helpful in reducing air and noise pollution.
Lorna Millington said that the ideal location for beginning the development of a Renewable Gas network is in the West Midlands – where access to the gas grid via different pressure sections is available. This is also where a large percentage of haulage passes through. She said that linking the development of Renewable Gas to transport will increase system capacity and reduce costs. She said that CNG can easily cope with all large transportation demand. She mentioned Leyland CNG high pressure filling station – the first CNG filling station – on Junction 28 of the M6 “if you’ve ever been that far north”. She also mentioned Birmingham City Council’s Low Carbon Blueprint, which also has transport in its sights.
For BioSNG development, Lorna Millington said that policy needs to create (or negotiate) a price differential to ensure investment. This is the case for all new technologies.
After Lorna Millington finished addressing the room, Tony Glover said that there is a sense of excitement about some of these projects, and that the Energy Networks Association (ENA) Energy Networks and Futures Group will be looking at energy mapping – in the light of Renewable Gas potential – but he wasn’t saying much more at that point…
Posted on November 11th, 2015 No comments
When answering questions at last week’s Energy Live News conference, Andrea Leadsom, Minister of State for Energy at the UK Government’s Department of Energy and Climate Change (DECC), openly declared her belief that nuclear power is “very, very cheap electricity; with a marginal cost of generation”, completely ignoring the two white elephants in the room : the UK’s continued public finance obligation to dispose of radioactive and toxic waste from the last 60 years of the nuclear power programme; and the immensely subsidised framework for developing new nuclear power that the UK Government has had to underwrite.
But there is also a third elephant walking into the room : the increasing unreliability of ageing nuclear power plants, not only in Britain, but also in France, and all across Europe, and anywhere, in fact, where the nuclear building boom took place 30 or so years ago. And one unplanned downed nuclear power plant requires an awful lot of backup to keep power grids from collapsing. And in a very short space of time.
So the question has to be asked – even if I am the only person in the room asking the question (and I’m not) – why does the UK Government continue to insist that a new nuclear power programme is vital ?
Government officials claim that new nuclear power plants will be more secure – which is a claim that deserves in-depth scrutiny; and that the cost of decommissioning and the disposal of radioactive and toxic waste has to be provided for in the financing of the project. Except it is highly likely to be undervalued. Because the UK Government is planning to build one (or more) Geological Disposal Facilities (GDFs), perhaps under a National Park near you. Furnished from the public purse. And when they have finally done so, they will buy back the obligation to dispose of nuclear waste from the private nuclear power plant companies. One can easily predict that the public will have to pay more to dispose of the waste than those contracts of waste disposal obligation transfer will be worth.
The companies that want to build new nuclear power plants know that the UK Government will buy back their duty to decommission and their duty to safely dispose of nuclear waste. So they have a free hand to undercost these obligations in their own accounts. If you don’t have an idea of what I’m talking about, Google “European Commission nuclear waste transfer contracts”, and you will find this from 9th October 2015.
Just another nuclear subsidy, you might think. We have to pay a bit up-front to get lovely, juicy, reliable, always on “baseload” nuclear electricity, you might think. Well think this : the UK could get an equivalent, reliable supply of power from a carefully balanced combination of wind power, solar power and low carbon gas-fired power, at a third of the cost. Or less. Without subsidies or sweeteners, or long lead times to new project power.
Andrea Leadsom was also off the money when she responded to questions about the economic value of new nuclear power (and Carbon Capture and Storage), “[In nuclear] there are new opportunities in low carbon energy – and sequestering – huge opportunities for growth and jobs. We’re doing a lot on building solutions – [for example] new nuclear colleges…” She ignored the fact that nuclear power and other large construction schemes such as Carbon Capture and Storage facilities will inevitably be “front-heavy” or frontloaded – all the capital and labour will be needed at the start of the projects, but employment will tail off rapidly after main construction ceases. How pitiful a promise is that ? Not a permanent strengthening of the UK economy, but a temporary glitch. By contrast, investment in renewable electricity and various forms of Renewable Gas could really bolster the economy – for decades or longer – enabling a phased transition to a fully low carbon economy – without massive engineering projects – the very thing we cannot currently afford.
More questions came from the floor. “[Question from Bloomberg] : Is the Government planning to phase out coal by 2023 ? [Answer] : As the Prime Minister has said, we don’t want to rely on unabated coal. [But] all fossil fuels will remain part of the mix, particularly Natural Gas – the cleanest and greenest fossil fuel.” What the Minister did not admit was that Natural Gas had saved the day only the day before, when several coal-fired power plants were unavailable, and one appeared to break down (by analysis of the data), and National Grid put out a call for extra generation. Natural Gas was responsible for generating upwards of 40% of power during the peak on that calm Wednesday evening (according to some figures I’ve seen). It’s time the UK Government admitted that we are dependent on Natural Gas and the flexibility it provides – it offers both energy security and de-carbonisation.
“[Question from E1] : [Is the Government] considering an equivalent of Silicon Valley in the UK ? What is our core competency ? [Answer] : Our creative and engineering [competencies] are second to none… The National Nuclear Laboratory… Thorium reactors…”.
It was at this point that I had my second urge to leave the hall. Thorium ? Have you any idea how much time it will take to make and perfect higher generation nuclear reactor designs ? We just don’t have that time. We have about ten years to firm up energy security – not just of electricity, but heating and transport too. We don’t have time for fancy nuclear gizmo research to come to fruition – if it ever does.
Andrea Leadsom continued, “…new blade factory at Hull…”
I’m always amazed when a Minister cannot bring themselves to actually say the words WIND TURBINE.
“…We’ve got the shale…”
No, actually, you don’t have any shale gas yet.
“… onshore oil and gas college. The UK will lead the world on small scale… small [profile] pumps… Different initiatives in different areas. In DECC we keep a close eye on these technologies. When you want a mix, you don’t want to pick winners…”
But you already have picked winners : shale, coal-to-biomass conversion and nuclear.
“…see which become most useful to our consumers.”
“[Question from David Porter] In the power industry, decisions appear to be micro-managed by Government. […] like decisions to do with de-carbonisation. Wouldn’t it be better to have a European Union carbon price and leave things alone after that and let industry decide what to put in place ? [Answer] : We are committed to reform of the ETS [European Trading Scheme]. It hasn’t worked so far. […] make a level playing field… You’re obviously right : the ETS is a large part of that. Ofgem and National Grid are making decisions – not DECC – to power up and down plant. We’re not micro-managing daily electricity supply.”
So, it’s National Grid’s fault there have been few new Natural Gas-fired power plants and no new nuclear power plants to call on in the last five years ?
“You won’t see DECC saying ‘outsource it’. [Key direction] always stays with Government. [Question from Chartered Builders] : [Will there be] a coherent plan on energy efficiency ? [Answer] : Well, certainly, energy efficiency [is important to] the DECC and governemnt… DCLG [Department of Communities and Local Government]… hospitals and schools… Will there be a national efficiency framework ? [We] always keep [that option] under consideration.”
So there you have it. DECC are not in control of which electricity generation plant gets built, are only willing to push nuclear power and shale gas, and not pay the relatively much smaller costs of a national building insulation programme, and will blame National Grid if they don’t choose the correct low carbon mix of electricity generation – which won’t be available because DECC can’t bring themselves to properly support renewable energy.
Is the Government actually in charge of the direction of energy ? Well, they don’t appear to have a functioning energy policy, and they’ve “devolved” a lot of decision-making and responsibilities.
The new Infrastructure Commission will find it easier to build roads and airport runways than new power generation plant.
Now they’re committed to avoid spending any money on energy, I don’t have much hope that DECC can achieve much in terms of influencing decarbonisation, because persuasion is the tool they have left in the box, and they aren’t convincing me.
Posted on November 11th, 2015 No comments
Into the valley of career death rode the junior 200… As Adam Vaughan reported on 10th November 2015, the UK Government Department of Energy and Climate Change (DECC) is to shed 200 of its 1,600 staff as a result of the Spending Review, ordered by George Osborne, Chancellor of the Exchequer, Second Lord of the Treasury. I wonder just where the jobs will be disappearing from.
Obviously, the work on nuclear power plant decommissioning and the disposal of radioactive nuclear waste and radioactive nuclear fuel needs to continue, and it needs to be government-led, as the experiment in privatisation of these functions went spectactularly over-budget, so it had to be brought back into public hands. But would all this work be best handled by a government agency, rather than DECC ? We already have the Nuclear Decommissioning Authority – should all work on decommissioning and waste disposal be delegated to them ? Shouldn’t DECC be concentrating on energy technologies of the future, instead of trying to fix problems from our nuclear past ? Should not the “policy reset” that many are hinting at address the advancement of renewable energies ? That, surely, should be DECC’s core activity.
There are many items of work that DECC could undertake, that don’t cost a penny in subsidy, that would advance the deployment of renewable energy technologies. Developing a model of energy transition that people believe in would be a good first move. Instead of depending heavily on new nuclear power, with its huge price tag, complex support arrangements, heavy public subsidy and long and ill-determined lead times for construction, DECC modelling could show the present reality, and the gradual dropping off of coal-fired power generation and nuclear power plants – revealing an integrated balance of variable renewable energy and flexible Natural Gas for both heating and backup/stopgap/topup electricity generation. New DECC modelling could show what a progressive transition from Natural Gas to Renewable Gas would look like, and how it would meet the climate change carbon emissions reductions budgets. DECC models of the future of UK energy could include the appearance of integrated gas systems – recycling carbon dioxide emissions into new gas fuels. When the wind is blowing and the sun is shining and not all renewable power is consumed, the UK could then be making gas to store for when the sun sets and the sky is becalmed.
It may take a few years before DECC finally realises that there is no future for coal and nuclear power. Massive projects will fail, or go slow. Financing will be uncertain and backers will run away screaming. Coal-fired power plants are already being left aside in National Grid planning for electricity markets. It will not be long before coal goes the way of the dinosaurs. What we will be left with, if we are clever, is a massive improved network of solar and wind power assets, and Natural Gas-fired power generation to back them up – even if these need to be renationalised because they are required to run flexibly – so shareholders cannot be sure of their dividends. The loan guarantees that DECC tried to throw at new nuclear power will be diverted to Natural Gas power plant investment, possibly; but even then, building and operating a gas-fired power plant could not make an economic case.
It is time to recognise that “baseload” always-on power generation is dead, just as the departing chief of National Grid, Steve Holliday, has indicated. Hopefully, he’s not departing National Grid because he doesn’t believe in the future of coal or nuclear. The plain facts, as the data shows, existing coal and nuclear power plants are unreliable and insecure. Investment into new coal and nuclear plants is at best, uncertain, and for many, dubious. It is possible that gas assets will need to be renationalised. We must resort to a gas-and-power future, for transport as well as heating and power generation. And within 20 years, we must transition to low carbon gas. If only DECC could admit this.
Posted on November 10th, 2015 No comments
The energy “trilemma” is the dilemma of three dimensions : how to decarbonise the energy system, whilst continuing to provide affordable energy to consumers, at a high security of supply. The unspoken fourth dimension is that of investment : just who is going to invest in British energy, particularly if green energy booster subsidies and regulatory measures are binned ? The UK Government have in the past few years believed that they need to support new investment in new technologies, but it looks likely that this drive is about to lose all its incentives.
Today, Amber Rudd, Secretary of State for Energy and Climate Change, faces an inquiry into Department of Energy and Climate Change (DECC) accounts and budgetary spending, and some say this could be a prelude for the closure or severe contraction of the whole department. If all Climate Change measures were put into abeyance, or passed over to the new Infrastructure Commission, the only remaining function of DECC could be nuclear power plant and nuclear waste decommissioning. It might have to change its name, even.
At last week’s Energy Live News conference, Andrea Leadsom, Minister of State for Energy at the UK Government’s Department of Energy and Climate Change (DECC), headed up the morning, with a bit of a lead in from ELN Editor Sumit Bose. He said that continuing challenges arose from the optimisation of balancing reserves and demand side management in electricity generation. He said that policy had perhaps swung away from the projection of 100% electrification of British energy, as this would require at least 15% more committed capital expenditure – although there would be savings to be had in operational expenditure. He also said that there is an ongoing budgetary conflict going on in government departments about the public money available to spend on investment in infrastructure (including that for energy). Obviously, the announcement of the Infrastructure Commission is going to help in a number of areas – including reaching for full electrification of the railways – a vital project. Then he introduced the Minister.
Andrea Leadsom said, “This government is determined to resolve the energy trilemma, decarbonising at the lowest cost to the consumer whilst keeping the lights on. In the past we did tend to have crazes on different technologies….”. At this point I wondered if she included nuclear power in that set of crazes, but her later remarks confirmed she is still entrenched in that fad.
Leadsom said, “There’s been a big move to renewable energy technologies, and quite rightly too. We need a wide diversity of electricity sources. We need to try and improve the new nuclear programme…”, at which point I thought to myself, “Good luck with that !”. She said, “Renewable energy has trebled. We need [to fund] that transition from unabated coal, [turn on to] gas and renewables. [But] as we saw yesterday – there is an intermittency of renewables.”
Andrea Leadsom was referring to the previous day, when National Grid has issued their first call for surplus top-up power generation since 2012. Owing to a confluence of weather systems over the UK, the atmosphere was becalmed, and wind power output was close to zero. However, this had already been predicted to happen. The lack of wind power was not the problem.
The problem lay in two other areas. Of the completely inflexible nuclear power plants, three generators were out of action for scheduled maintenance (Hunterston B, Reactor 3; Heysham 1, Reactor 1 and Hartlepool Reactor 1). And so when two coal-fired power plants which normally would have been operational were out of action, and one failed apparently between 12:45pm and 12:51pm (Eggborough, Fiddlers and Rugeley according to various sources) dropping approximately 640 megawatts (MW) out of the system (according to BM Reports data), National Grid had to resort to elements of their balancing “toolkit” that they would not normally use.
The operators generating for the National Grid were able to ramp up Combined Cycle Gas Turbine (CCGT), and various large electricity users with special arrangements with National Grid were stopped using power. By around 18:00 6pm the emergency was over, with peak demand for the evening levelling off at around 48 gigawatts (GW).
Although National Grid handled the problem well, there was a serious risk of blackouts, but again, not because of wind power.
If during the period of supply stress, one of the nuclear power plants had suddered an outage, that would have created the “nightmare scenario”, according to Peter Atherton, from Jefferies, quoted in The Guardian newspaper. The reason for this is that the nuclear power plants are large generators, or “baseload” generators. They have suffered from problems of unreliability over the recent years, and whenever they shutdown, either in a planned or an unplanned manner, they cause the power grid a massive headache. The amount of power lost is large, and there’s sometimes no guarantee of when the nuclear generation can be restored. In addition, it takes several hours to ramp up replacement gas-fired power plants to compensate for the power lost from nuclear.
Yes, Andrea Leadsom, more renewable energy is essential to meet decarbonisation goals. Yes, Andrea Leadsom, renewable energy technologies have an inherent intermittency or variability in their output. No, Andrea Leadsom, National Grid’s problems with power generation during the winter months is not caused by wind power on the system – wind power is providing some of the cheapest resources of electricity. No, Andrea Leadsom, insecurity in Britain’s power supply is being caused by ageing nuclear and coal power plants, and the only way to fix that is to create incentives to develop a plethora of differently-scaled generation facilities, including many more decentralised renewable energy utilities, flexible top-up backup gas-fired power plants, including Combined Heat and Power town-scale plants, and Renewable Gas production and storage facilities.Academic Freedom, Assets not Liabilities, Baseload is History, Be Prepared, British Biogas, Burning Money, Change Management, Climate Change, Energy Change, Energy Crunch, Energy Insecurity, Energy Revival, Policy Warfare, Political Nightmare, Price Control, Realistic Models, Regulatory Ultimatum, Renewable Gas, Renewable Resource, Wind of Fortune
Posted on November 6th, 2015 No comments
“So, Professor Macdonald”, I hazarded, as the good woman, sporting an alarmingly bright red frock, was fiddling with her bags on her way out of the Energy Live 2015 conference event on 5th November 2015 in the arty Barbican, “I understand that some remarks that you made about women and shale gas have been misrepresented.”
Averil Macdonald politely stopped what she was doing and engaged with me about this issue, which had thrust her abruptly into the limelight, accused of being sexist. She said that she had been misquoted, and her real meaning twisted by the absence of five words from what she’d actually said. I asked her where I could check what she had actually said, and she pointed me at a Guardian newspaper piece, which I think is this one.
I was willing to give her the benefit of the doubt, as I had sat in her earlier stage presentation urging women and girls into STEM careers, amongst other things, and she’d been quite upbeat about energy transition. She said it was going to be a long road to an ultra-low carbon system, and require lots of investment. Although she spoiled this by adding that the investment would need to be in extraction – for fossil fuels, obviously – as well as infrastructure. Her assumption that continued fossil fuel mining is essential, particularly in light of the need to reduce carbon dioxide and methane emissions, was, I felt, quite alarming.
Anyway, back to the evening one-to-one chat. I asked her a little more about how she viewed shale gas exploration, because I said I couldn’t see a good reason for it – especially as industrially manufactured low carbon gas held out more potential. Her argument was a little more detailed than she had made from the platform earlier. She said that “this country” can’t afford new energy investment. I didn’t stop her right there, but I should have. I should have countered with asking about the eye-watering sums of foreign sovereign wealth, taxpayers’ money, billpayers’ money and tax breaks being thrown at supporting new and existing fossil fuel production in the North Sea, and loan guarantees and other subsidies for new nuclear power, besides the huge public budgets for cleaning up decades of nuclear power plant waste and spent nuclear fuel. And then I should have challenged her about privatisation in the energy industry, which has led to companies being hamstrung by their need to provide higher returns to shareholders at the expense of capital investment, a situation that has only been turned around by government promises of public money and guaranteed high power prices to justify boardroom spending on new and renovated assets. The money to invest is there, I should have countered. It’s in the system. It’s just being frittered away on dividends, Contracts for Difference, capacity auctions, and insane projects like new nuclear power. And anyway, if banks are confident of technologies, they can always create debt to finance projects.
Anyway, back to Averil’s take on things. She said that indigenous UK energy resources should be exploited in order to finance the low carbon transition. Again, I should have interjected and prevented her from continuing. When does Her Majesty’s Treasury actually hypothecate revenue, I should have asked her. How would tax take from shale gas production ever be converted into money for renewable energy or building insulation ? She should look at the example of fuel duty, or several other allegedly “green” taxes and see for herself where the pennies have accumulated into budgetary expenditure pounds. Not in Feed-in Tariffs, that’s for sure. I tried to question the potential volumes of shale gas production, and how it would only contribute small revenue streams for the Treasury. I tried to ask her about other indigenous British energy resources, such as the wind and sunshine, and how they are free, compared to the costs of digging up shale gas, but she breezed on.
She said that there was a lot of capital being attracted to the exploitation of shale gas in the UK. She implied that private capital was heavily invested. I should have asked her in-depth questions about this. Intelligent oil and gas companies have steered well clear of the UK Shale Gas project. Large companies like Shell and Total are promising their shareholders that dividends will remain healthy, despite the downturn in the oil commodity price which impacts their profits. Shell won’t be involved in British shale gas, even though Total will, apparently, but evidence suggests that any failure in exploration will mean that Total pulls right out again. So far, UK shale gas experience has been empty holes, and companies withdrawing. What kind of companies apart from those in the existing energy sector would have enough confidence of their knowledge about shale gas and hydraulic fracturing, sufficient to invest on the kind of scale required ? I said that the real investment money for energy in future wasn’t going to come from the government, or from speculators, but from large investment funds. She said that capital was already committed to shale gas. I should have asked more, because I can’t imagine that the very cautious major investors would risk their reputations and credit ratings on shale gas.
I said that I doubted there would be much in terms of shale gas production for the first 20 years. I also said that there are some very good reasons to oppose the development of a shale gas industry in the UK. I said the only reason that the general voting democratic public permit the ongoing extraction of oil and gas in the North Sea is because the ocean disperses most spills. If this drilling were to come onshore, people would see the environmental pollution that fossil fuel production always entails. Averil Macdonald insisted that the UK has one of the best industrial regulatory regimes, and that shale gas production can be done safely and securely. I said that I had been looking at some of the research on gas and oil well integrity, and spills, and about long term monitoring. I should have challenged her by asking her whether she realised that without decades of close monitoring and potentially emergency intervention, shale gas wells could constitute a major environmental risk for a very long time to come.
I should have reminded her of the basic problems with UK shale gas development proposals : that in comparison to the United States, where the federal government sold off massive blocks of open public land for shale development, the UK is densely populated, and that vital environmental resources are packed close together. I should have reminded her that the best estimates are that the potential shale gas resource in the whole of Europe is only ten times or less what it is in northern America. I should have said that the statistical rates of compromised oil and gas wells mean that surface pollution from shale production is inevitable. I should have reminded her that although what’s happening in Gasland USA could be considered “scare stories”, as she clearly thinks, these are real events, and real lives being affected. Whatever she might think about the poor standards in the oil and gas industry in the USA, they too have a regulatory regime for the energy sector, and yet environmental and social abuses are rife. Perhaps it is simply the nature of shale gas and shale oil development that causes problems, regardless of legislation and industry monitoring ? I should have reminded her that the geology of UK shale sediments are different to those in northern America; that it took well over 40 years to develop shale extraction there, and that there are real problems resulting from new underground extraction technologies, including seismic events, water, soil and air pollution and land collapse.
I should have stated the obvious about women in particular, who she accused of taking a position against shale gas without knowing the facts, without understanding the science. First of all, shale gas exploitation is not science : it’s an engineering technology, and technologies fail, and women know this. And secondly, oil and gas production is dirty, and women know this, too. Women get sick and tired of men treading all over the clean kitchen floor in their muddy boots, leaving toxic damp towels on the bed, and not wiping up spills. Women know that onshore oil and gas production will be another bunch of big, strong boys, muscling into your house, promising to do a good job and then behaving like dodgy builders, regardless of the regulations in the construction industry. We don’t want these profiteers tearing up our beautiful countryside to dig leaky, unhealthy holes, and bomb the underside of the Earth just to make a few homes warmer.
Oh, Averil Macdonald knows how to peddle political tales – she posed the usual narrative that it’s fine buying Liquefied Natural Gas (LNG) from Qatar, but all the Qataris do with the money is buy Ferraris. I said I’d heard that story before, and I said I found it irrelevant. I should have challenged her about the serious prospects of LNG expansion in Australia and south east Asia. After the Middle East gas is finished, there are more places to get gas from, for at least another 30 years, without blowing up the subsoil for shale gas.
Professor Macdonald, chair of UK Onshore Oil and Gas, tried to sell me the idea that communities who would be prepared to accept the wonderfully small profile shale gas wells would receive generous funds. I suppose she was suggesting that these bribes could then pay for solar and wind power development. But I didn’t get to ask this, as our conversation was terminated by our being shushed by an irritated young privileged white male who wanted to hear the Ed Davey Unplugged interview without interruption, who began impolitely with an angry “excuse me”. Being women, naturally, Professor Averil Macdonald and I both immediately apologised as our gender are culturally trained to do, and continued arguing for only a minute more sotto voce before giving up in the face of amplified male competition. Ed Davey was most entertaining, after all. It almost made up for being scolded about my resistance to and scorn for shale gas development.
Posted on November 6th, 2015 No comments
Nothing can really top an Energy Live News day of energy debates rounded off by a beer and the spectacle of a respectable ex-Energy Minister lounging in playboy fashion on a bar stool nursing a glass of red wine (or two) and being nigh on scathing about UK energy policy – or the total lack thereof.
As I recall it, but I didn’t take notes or a voice recording, Ed Davey, now an energy consultant as “Energy Destinations”, had the temerity to call out the current UK Government as “liars” about the Levy Control Framework being overspent, and quoted others as saying that the current Tory energy strategy is “stupid” and “barmy”.
He said, as I remember it, that the Tories have never offered viable alternatives to things that are failing, and that he personally wouldn’t bet his house on the claims of large volumes of shale gas production. I believe he said that the Tories pushing through shale gas development was bound to create strong resistance – although he didn’t stoop so low as to suggest that the main resistance to shale gas was coming from… Tory ruralshire voters.
Conservative voters in every town and village seem to be the key deniers of climate change science, and appear to me to be generally against any form of energy investment – wind, solar and shale, and any new cables and pipes. Deranged or rabid that may seem, at first glance. And possibly the second glance, too. But there you are. A Party can’t choose the sanity of its voters. Although if I were in the Tory Government, I’d be highly embarrassed by some of these people. There are plenty of “ouch” moments to deal with – such as the entire cancellation of a perfectly viable wind power project offshore in southern England, just because of the contributors to the Letters Page in the Bournemouth Echo newspaper and the local yachtsmen. The whole fate of human civilisation could rest in the hands of uneducated yokels dismissing renewable energy because they listened to James Delingpole’s gut instinct about the reliability of global warming science. But I digress.
It is the height of Conservative Government cowardice and illogic to permit local groups to fight political battles against new energy investment, instead of making the strategic case for new energy, particularly renewables. Also, it is ridiculous to use subsidy or “golden egg” community bribes to roll out infrastructure development. Sorry. They’re not “bribes”. Not even if money is being handed out by the shedload to communities volunteering to host industrially landscape-disfiguring and toxic shale gas developments or nuclear waste disposal facilities that need monitoring for decades or even centuries to guarantee their environmental security.
Ed Davey wanted to remind his audience that he had been the longest serving Energy Minister since 1997 (did I get that right ?) – which is about right, as many others have been pushed out of office on one pretext or another – faux scandal after faux scandal. Nobody would want that job.
Ed Davey said that trade with other countries was the way to build global security and address things such as human rights issues, so he has no problem in energy trade and investment with China – and that he has his own project there.
After the “Ed Davey, Unplugged” interview with Energy Live News, I hung about earwigging to Ed talk to his encircling fandom. I think the first question he got was about thorium nuclear power, small modular reactors or nuclear fusion or something, because he was talking about how advanced designs could not be said to be feasible, even though people claim they are feasible.
He made the very good point that a lot of things in energy are uncertain, and that in the energy sector, if anybody claims that something is absolutely certain, they’re lying. I tried to get across the general conclusion of my research into low carbon gas – that there are much better, and more certain, prospects of industrially manufactured low carbon gas than anything that shale gas could ever deliver. He admitted that the range of projections for shale gas production are very wide. I said that many players were working on green gas projects, including the National Grid. He said that National Grid had a vested interest. I agreed.
Because everybody has a vested interest in their own pet favourite energy. There are a number of people in the Conservative Party, for example, who stand to gain significantly from investment in shale gas development. If confidence can be raised in the technology, then investment can be gathered, and distributed, even if there is no commodity of any size to draw on. Shale gas development sounds to me like the plot of The Producers – the aim is to raise a lot of investment capital for a flop, and scarper with the proceeds. A little like the loan guarantee offered for the Hinkley Point C financiers. Another fine British energy subsidy. But again, I digress.
Ed Davey said that a leftwing Labour Party bothered him, and that they had been bandying about a wild high figure for green gas production potential. I said it all depends on energy efficiency measures, and also, that the original research had been done by National Grid and other researchers. Half of residential gas demand being supplied by green gas is not unimaginable or unfeasible if you consider this as an industrial proposition, and not just farm-based tank digestion for biogas and biomethane.
Ed Davey said that he wanted to see shale gas developed, as he didn’t really trust Vladimir Putin. He was keen to point out that the UK Government should work with uncertainty, and build a framework for energy policy that can cope with uncertainty. I tried to make the point that it would take at least 20 years before shale gas production could produce significant volumes, if it could at all. We don’t have time for this highly uncertain strategy. I also tried to say that nobody knows if the EPR nuclear reactor design destined to be built at Hinkley Point C actually works. That’s quite an uncertainty to base core energy policy on, if you ask me.
Since the potential resources of shale gas in the whole of Europe are ten times smaller, or less, than in North America, why would shale gas be expected to be productive in the UK ? The deal that BP has just done with China to develop shale gas in its desertified hinterland is probably a useful project compared to the idiocy of trying to develop shale gas in Britain. The BP-China deal, by the way, was signed in under cover of the news of the Chinese investment in the Hinkley Point C nuclear power plant, but I think the BP-China-shale-gas story is far more important. I think Hinkley Point C is a project that stands a chance of falling flat on its face – either because the EPR doesn’t work – something the Chinese should soon be able to tell us because they’re building a pair in Taishan – or because it cannot get built in a useful timeframe.
Ed Davey’s position, as a Liberal, of course, is that he wants to let all the possible energy technologies come on, and see which succeed. He gave no recognition of the support needed to bring on some new or currently niche technologies. Or the subsidies still being received by the fossil fuel and nuclear power industry.
Ed’s view is that David Cameron will not want to break up or disband the Department of Energy and Climate Change, but that when George Osborne becomes Leader of the Conservative Party, and becomes Prime Minister in the next General Election, he will definitely want to get rid of DECC. Ed Davey didn’t mention that over half of DECC’s budget is committed to nuclear decommissioning, and that this will still need to get paid for, even if DECC dies a departmental death.
Although Ed Davey admitted that the strike price for power arising from the Contract for Difference agreed for the Hinkley Point C was high, he said that this was to pay for the eventual decommissioning of the plant and the disposal of the fuel waste. However, he didn’t seem to realise that this is likely to be under-costed, as the final disposal of nuclear waste and nuclear fuel will still paid for by the British taxpayer, as it will be sold back from the private energy companies when the Geological Disposal Facility will be built. So, in addition to the 60 years or more of radioactive waste and radioactive spent nuclear fuel that the British people have yet to pay to dispose of, we will be lumped with paying the spiralling costs of disposing of all the waste from the new nuclear projects as well. No lessons learned there, then.
Posted on November 5th, 2015 No comments
On 3rd November 2015, I had the disconcerting experience of wandering up and down Whitehall in London looking vainly for a venue : the Parliamentary Renewable and Sustainable Energy Group (PRASEG) and Energy Networks Association (ENA) event entitled “Gas – Delivering for Customers and Supporting the Low Carbon Economy“.
The central street of government officialdom has become almost unrecognisable in parts, owing to a fad for boarding up offices under renovation in boxed section – London’s joinery community must be waxing rich. I wondered inconclusively if this trend was spurred by attention to security questions ahead of the round-Cenotaph open-air wreath-laying coming up on 11th November.
I very politely asked several security guards in high visibility jerkins and a policeman outside Downing Street with an outrageously full hipster beard where I could find Number 61, and nobody seemed to know where it was.
I even went into the front door of Number 74 Parliament Street to check I wasn’t looking in the wrong place. The reception guard said that I wasn’t the first person who’d come asking.
I dropped in at the Cabinet Office, and asked if perhaps the invitation meant Whitehall Place instead of Whitehall. I even phoned the mobile phone number and desk number of the event organiser – who didn’t pick up. Obviously. Because he was hard at work at the venue itself already.
Eventually, I encountered a face I recognised striding along Whitehall, or at least I thought I recognised : Nick Molho, now working with the Aldersgate Group, and I asked him if he was also going to the PRASEG/ENA meeting. He was not.
And then I found Dr Alan Whitehead MP also wandering down the street, similarly lost. He too had stopped Nick Molho to ask about Number 61. Clueless in Whitehall.
Comrades in lostness, together we walked into the scaffolded, but not boxed-in, Banqueting House, and helpfully, a woman on the welcome team knew that Number 61 was next door. Of course, Number 61 is the home of RUSI, the Royal United Services Institute. And of course, we’d both been there before. Maybe I ought to carry around a proper smartphone for situations such as these.
Once successfully in the round room with the tasteful purple velvet curtain backdrop, I found a contact from the UK Government’s Department of Energy and Climate Change (DECC), who was also sporting very large amounts of sprouty chin hair. The beard’s coming on well, I commented. Yes, I grew it all myself, he answered proudly. So, I asked, could I ask you anything about the Spending Review ? Well, he said, you could ask me, but I can’t guarantee if I can answer you, and if I do answer you, I might not be able to give the full answer. OK then, I conceded, I won’t ask.
The 25th November, he said, is when the announcements will be made.
My view is though that this particular person will get to keep his job. If he were about to leave the government, he would have shaved his beard off by now. Presentableness for interviews, you see. A clean chin denotes a clean mind, or at least, a refreshed one, looking more youthful, and ready for something new. A kind of face “reset”.
There were a number of very interesting presentations at the PRASEG/ENA do, but the ones that really stood out for me were a presentation on Renewable Gas from National Grid and the one from CNG Services about compressed Natural Gas being used to fuel Heavy Goods Vehicles.
I spoke to the speaker from National Grid after their presentation. I told them I had called my book on low carbon gas system options “Renewable Gas”, as I had been impressed by the National Grid publication of the same name that I read back in 2009.
I said it was a shame that the UK Capacity Mechanism had not worked as it should have done to support new investment in high performance combined cycle gas turbine power generation plant (CCGTs), which are an ideal way of increasing flexibility in balancing the UK power supply to demand, especially as more intermittent/variable renewable power becomes available.
CCGTs have faced issues of economic viability because they are not always in use, and this would only be exacerbated by increasing levels of wind and solar power feeding the grid.
I said it seemed obvious to me that it would be more economically efficient if CCGTs were extended to become fully integrated gas production and recycling systems. I said this meant capturing carbon dioxide and re-processing it into new methane-rich gas fuel, methanating with Renewable Hydrogen produced from biomass and steam, or renewable electricity when available, and storing the methane-rich fuel for use when renewable electricity was not available.
I congratulated the speaker on having the word “Methanation” on one of their slides.
They intimated that in a very short timeframe they expected their first BioSNG (biomass-derived substitute Natural Gas) project to be announced – gasifying black bag waste in Swindon, and making methane-rich gas for grid injection.
I said I would be interested in visiting the site, and was invited to email in a request to be included on the notification list.
The presentation from CNG Services showed us the new Scania gas truck – fuelled entirely by compressed natural gas – and the location of the filling station – on the high pressure gas transmission line. What will be happening is that John Lewis – will be anaerobically digesting all their food waste, and converting the biogas to biomethane, and injecting it into the gas grid, receiving Green Gas Certificates. They will then run a fleet of Scania gas trucks, and fill up at CNG Services, and will be able to claim that their entire transport fleet will be running on Renewable Gas.
To me, it was notable that there was not much discussion of shale gas throughout much of the event, despite this being one of the key planks of the Conservative Government energy narrative of late, regardless of how vain and meaningless it is. The PRASEG/ENA event showed that they may be clueless in Whitehall, but there are some parliamentarians and their friends in the gas industry who recognise the huge opportunities for manufactured low carbon gas.
Posted on October 4th, 2015 No comments
Status-checking questions. I’m sure we all have them. I certainly do. Several times a week, or even day, I ask myself two little questions of portent : “What am I doing ?” and “Why am I here ?”. I ask myself these questions usually because my mind’s wandered off again, just out of reach, and I need to call myself to attention, and focus. I ask these little questions of myself when I do that thing we all do – I’ve set off with great purpose into another room, and then completely forgotten why I went there, or what I came to find or get. I also use these forms of enquiry when I’m at The Crossroads of Purpose – to determine what exactly it is I’m deciding to aim for. What are my goals this day, week, month, age ? Can I espy my aims, somewhere on the horizon ? Can I paddle labouriously towards them – against the tide – dodge/defeat the sharks ? Can I muster the will to carry this out – “longhauling it” ?
I’ve spent a long time writing a book, which I’m sure to bore everybody about for the next aeon. My intention in writing the book was to stimulate debate about what I consider to be the best direction for balanced energy systems – a combination of renewable electricity and Renewable Gas. I wanted to foster debate amongst the academics and engineers who may be my peers, certainly, hopefully providing a little seed for further research. Hopefully also having a small influence on energy policy, perhaps, or at least, getting myself and my ideas asked to various policy meetings for a little airing. But, if I could in some way, I also wanted to offer a bit of fizz to the internal conversations of companies in the energy sector. You see, it may be obvious, or it may not be, but action on climate change, which principally involves the reduction in the mining, drilling and burning of fossil fuels, principally also involves the co-operation of the fossil fuel extraction companies. Their products are nearly history, and so it must be that inside the headquarters of every transnational energy giant, corporate heads are churning through their options with a very large what-if spoon.Academic Freedom, Assets not Liabilities, Be Prepared, Carbon Commodities, Change Management, Climate Change, Conflict of Interest, Corporate Pressure, Delay and Deny, Delay and Distract, Direction of Travel, Disturbing Trends, Drive Train, Economic Implosion, Emissions Impossible, Energy Crunch, Energy Insecurity, Energy Revival, Extreme Energy, Fossilised Fuels, Fuel Poverty, Global Warming, Green Gas, Green Investment, Green Power, Growth Paradigm, Human Nurture, Hydrocarbon Hegemony, Hydrogen Economy, Incalculable Disaster, Major Shift, Methane Management, Natural Gas, Oil Change, Paradigm Shapeshifter, Peak Emissions, Peak Energy, Peak Natural Gas, Peak Oil, Realistic Models, Renewable Gas, Resource Curse, Solar Sunrise, Solution City, Sustainable Deferment, The Power of Intention, The Price of Gas, The Price of Oil, The Right Chemistry, Wind of Fortune
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 1 comment
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.
Posted on July 14th, 2015 No comments
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
Posted on July 14th, 2015 No comments
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 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 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 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 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.