Renew On Line (UK) 35

1. PIU - so far, so good

Following its recommendations on how to spend the £100m promised by Tony Blair for renewables (see item 2 below) the Cabinet Office Performance and Innovation Unit is just about to publish its review of energy options fifty years ahead. The drafts that the PIU have put on their Web site, although clearly still only tentative, indicated strong support for renewables, with generation costs by 2020 being put at less than 2p/kWh for good wind projects on land, and 2-3p for offshore sites. Energy crops weigh in at 2.5-4p/kWh. while PV is put at 10-16p by 2020, but falling significantly after that. Wave and tidal stream technology is estimated to be possibly generating at between 4-8p/kWh by 2020- a little bit pessimistic we would have thought. But they do say that it all depends on how much support is given.

At the same time, the PIU seem keen to give fossil fuels a chance to stay in the game. Clearly Combined Cycle Gas Turbines still rule the roost, with the draft putting generation costs at 1.9p/kWh, as a consequence of the development of new more efficient technology, although gas cost increases might push it up to 2.05p/kWh. Combined Heat and Power does not do quite so well, especially large units, but the use of new smaller turbines push the price of micro CHP down to 1.6-2.4p/kWh.

The PIU seem taken with the idea of clean coal technology, despite the relatively high cost. They look to cost reduction with new technology, and estimate generation cost, by 2020, of 3-3.6p/kWh. They also seem quite keen on carbon sequestration in geological strata, in part it seems because, when power generation is coupled with sequestration, the difference in cost between using coal or gas as a fuel is much less. They quote generation costs of 3/4.5p/kWh by 2020. But they do admit that there is a great deal of uncertainty about the safety, environmental risks and public acceptability of sequestration- and about how much space is actually available for storing carbon dioxide. They quote estimates for the space in depleted oil and gas wells in the range of 90-500 GtC compared to the even wider range of 40GtC to13,000 GtC for deep saline aquifers- set against the 5,600 GtC that would be created if all the recoverable fossil fuels were burnt off. As far as we can see, the problem is that there is no certainty that CO2 would be successfully trapped indefinitely in the deep ‘open’ aquifers, and the depleted wells would probably only provide space for a few decades worth of CO2 output.

They are much less enthusiastic about nuclear. They suggest current designs might have generation costs of 5-6.5p/kWh, athough future designs might reduce this to 3-4.5p by 2020. Overall one early draft concluded that, ‘with continued support and development, renewables may provide the most cost effective options’ in terms of carbon emissions reduction, and they note that ‘in addition, they have less environmental risks in other ways’. But to achieve significant carbon savings, it said there would also have to major changes in others sectors, such as transport.

All of which they say implied that only the ‘Global Sustainability’ and ‘Local Stewardship’ scenarios, as outlined in the recent Foresight exercise (see Renew 131), would be viable- if the aim was to reach the target set by the Royal Commission on Environmental Pollution of a 60% emission reduction by 2050.

We will have to wait and see what emerges in the final report, but the last preliminary draft on Energy Scenarios for 2050 concluded as follows:

‘Our overall conclusion for the new capacity in the electricity supply sector by 2020, is that it can best be delivered, consistent with all energy policy objectives, using energy efficiency, CHP and renewable energy, provided that the last of these can be built at acceptable cost. This approach will require rapid action to ensure fair treatment of these options in distribution networks and NETA. Insurance against the failure of these options to deliver in full can be provided by keeping open options for fossil fuels with carbon sequestration and nuclear power. However, apart from the demonstration of carbon sequestration, these options do not need early support to provide this insurance.’

See the PIU web site: www.cabinet-office.gov.uk/innovation/2001/energy/

energyscope.shtml#Project Links (under Minutes & papers, PIU Advisory Group meeting Oct 17th).

UK Energy Gap?

‘Even with a major shift to renewables this alone would not be able to plug the coming energy gap’. So said the Minister of State for Scotland, George Foulkes, who is on the PIU Advisory Committee. In a speech last August he argued that, in addition to applying best practices in energy efficiency and clean fuel technology and continuing with technological innovation, with fuel cells and hydrogen being particularly important new technologies, we also had to ‘consider carefully the role of the nuclear industry - including possible new build. Government policy is that existing stations should continue to operate so long as it is economic, safe and environmentally acceptable for them to do so. In the longer term, new build could represent a carbon free source of baseload electricity, but the issues of public acceptability and regulatory risk need to be resolved as well as the economics of new build. Crucial to both is the question of long-term waste management’.

However, subsequently, the PIU team concluded that there wouldn’t be a gap and that ‘CHP and renewables might be able to deliver all the new capacity needed’.

(See Oct 17th PIU Minutes)

DTI joins in

The Department of Trade and Industry added its own last minute element to the PIU review (see PIU Web site) with a contribution by the Chief Scientific Advisor looking at the overall allocation for Research, Development and Demonstration for energy- drawing on comments from, amongst others, the Carbon Trust, Imperial College, EST and OU EERU.

The government currently allocates around £50m to RD&D on energy, but this is set to rise to £104 by 2003/4, although, as we noted in Renew 134, half of that will then go on nuclear related spending - including £13m for fusion and £32m for aid to the (ailing) Russian nuclear programme. But renewables will do better, with £55.5m over three years. Even so that’s very small. The DTI review should emerge in parallel with the PIU review. It could well call for overall energy R&D to be expanded.

Other PIU Review Submissions

Greenpeace - 50% renewable by 2020

In its submission to the PIU Energy Review, Greenpeace presented the choice between renewables or nuclear as "a step into the future or one foot in the past," commenting that "it is deeply depressing that all the debate has been about a nuclear revival. To endorse that would be to look backwards to an industry that has had its chance and failed". It argued that the government should phase out nuclear power, while setting a target to meet half of UK electricity needs from renewables within 20 years. A 50% reduction in final energy use should be targeted over 50 years, and diversity and security of supply should be achieved through investment in a range of renewables.

Scotts for Renewables

In a paper submitted to the PIU review of energy policy, the Scottish executive underlined the importance of developing renewable energy- and played down the prospect of a new nuclear power station being built in Scotland. It argued that no decisions about the future of nuclear energy could be taken before consultations had been completed on the management of waste and spent fuel from existing stations, and any proposal for new plants could in effect be vetoed by the Scottish planning system. It said that present indications were that nuclear would be too expensive to compete with other sources of generation "now and for some time to come", and described Scotland’s potential for further renewable energy as "massive". For example, Scotland had around 23% of the total European wind energy resource and the executive's commitment is to obtain 18% of its electricity electricity from renewables by 2010.

Engineers for Nukes

In its PIU submission, the Royal Academy of Engineering, warned that Britain would have to import between 50-90% of its gas by 2020 and could be over-reliant on oil and gas imports from volatile former Soviet states and the Middle East. It called for increased government intervention- via increased subsidies, regulation and legislation to encourage the development of methane gas from coal seams and nuclear and renewable power generation. "Government policy must ensure that long-term security of a sustainable supply takes precedence, if necessary, over shareholder interests."

It warned that we were falling behind the 10 % by 2010 renewable target but then, revealingly, claimed that 10,000 wave machines would be needed to replace just two nuclear reactors. It also warned that there could be a skills crisis in the nuclear industry unless there was fresh investment, since nuclear engineers reaching retirement age were not being replaced.

Pre-emptive media strikes

Amusingly, the weekend before the PIU announcement, the Sunday Times (4th Nov) published a story suggesting that the PIU was about to recommend 15 new nuclear plants. Not to be outdone, the Observer published an equally speculative article claiming that the Government was expected to exempt the nuclear industry from the Climate Change levy. ‘The exemption, to be recommended by the government's energy review, chaired by trade and industry minister Brian Wilson, will make nuclear power more competitive than coal and gas in a move likely to be seen as a signal that ministers believe there is a future for new nuclear generation in Britain’.

The Sunday Herald (Nov 4) was probably nearer the mark. It reported that the PIU was edging towards non nuclear conclusions, but ‘there was still everything to play for’.

We assume that the subsequent coverage in the FT and New Scientist (Dec.13) was even more accurate – being evidently based on a leaked version of the final draft of the PIU report. The headline recommendations, it seems, are that the UK should cut domestic energy waste by a further 20%, aim to get 20% of its electricity from renewables by 2010 and expand CHP. Nuclear gets sidelined. But we will have to wait until the report finally emerges formally to confirm what has actually been recommended.