Friday, 24 March 2017

Government admits gas is substituting for cheap renewables

In the latest Government forward energy projections the Government implicitly admits that reductions in contracts to be awarded for renewable energy are to be replaced by more generation from natural gas plant.

You can see an analysis by Carbon Brief of the Government's latest projections. The Government recognise that the costs of renewables have continued to fall but for reasons that Carbon Brief has been unable to find out (from Government) the Government have cut back its previous projected growth in renewable energy.

Well, I can tell you why the Government has cut back its projections of renewable energy even though onshore wind and onshore solar have become the cheapest electricity supply sources: the Government prefer more expensive, carbon emitting natural gas for political reasons. They much prefer seeing UK natural gas reserves run down to having windfarms and solar farms built.

However the Government has even let the cat out of the back. Carbon Brief (CB) explain this, taking readings from from the latest political tealeaves (posing as models) generated by the Department of Business Energy and Industrial Strategy (BEIS). So says CB's Simon Evans:
'Finally, in the latest BEIS projections, the output of renewables dips in the early 2020s. BEIS says: “This is due to a number of factors, including the temporary increase in gas generation to maintain system flexibility.” Consequently, gas output picks up the slack in the projections. See

I notice that Cornwall Energy insight are saying that there is a possibility of a 'technology neutral' bidding round for renewable energy coming around soon for new renewable energy to be installed after 2020.

Technology neutral? Well, only in the sense that it's a bit like a race when you go around and break the legs of the strongest runners before you start. Only technologies like offshore wind and tidal power will be allowed to compete for contracts. Onshore windfarms and solar farms would be barred.

I think it is quite funny when economists at large call for 'technology neutral' bidding auctions to supply electricity. It was only a few years ago it was assumed that this would lead to gas fired power stations followed by nuclear power with renewables energy having to have a separate rather larger subsidy scheme for them to be economic. The wise consultants hired by the power industry establishment to justify their own existence would sneer at the alleged green fantasists like me for suggesting that this was not what would happen in the future! Now, though reality has turned out to be different from all those glossy consultants reports that the industry paid so much money for (note, I'm not talking about Cornwall Energy here!)

Today separate rather larger subsidy schemes are reserved for nuclear power and 'capacity markets' for fossil fuel power schemes. These people need the subsidies, so much in the case of Hinkley C that not only are EDF to be paid loads more than onshore wind is getting paid per MWh (under the Renewables Obligation) but EDF, the developers, are also getting handouts from the French Government!

In fact all onshore wind and solar need now is a level playing field with the rest. But instead they get nothing. Nix. Not a sausage. In fact they are banned from been given any government contracts to supply electricity!

It rather reminds me of Ken Livingstone's saying 'If voting changed anything they'd abolish it'. In this case of course you can read a parallel saying that 'if technology neutral auctions of electricity contracts gave lots of opportunities to onshore wind and solar they would abolish them' (for onshore wind and solar).

That's precisely what they have done!

Tuesday, 21 March 2017

Why we need smart grid charges before smart meters

We desperately need green NGOs and campaigners to campaign for time-of-day-electricity charging. Then we will get real smart meters, not the sham ones that are being installed now. The so-called smart meters, being rolled out in a house near you, are mainly a bit of meaningless hype which won't do the very thing that popular mythology thinks they will do - that is ensure that electricity prices are geared so that they fit in with when electricity is being generated.

The Government and OFGEM need to implement grid and distribution charges that would discourage electricity companies from supplying energy at peak times. Such charges would make it much more likely that the electricity industry would encourage their consumers, through their pricing policies, to consume less electricity during peak times.

As the green energy revolution gathers pace, and the number of electric cars increases we ought to be making the system really smarter. This involves incentivising consumers to charge their electric cars and perform other functions (wash clothes etc) at times when there is a surplus of generating capacity rather than when there is a shortage.

But practically none of the 53 million smart meters being rolled out across the country will do this. I have heard of one small supplier that offers tariffs according to time of day, but regrettably such efforts will be stymied by the failure of the electricity system to encourage this type of scheme.

In theory electricity suppliers will have an incentive to encourage their consumers to buy electricity at times when there is a surplus of electricity, and thus when it is cheapest on the wholesale electricity markets (ie power coming from power generators). Alas, the system does not do enough to encourage this. This is because if a brave electricity company (eg 'Green Energy') does introduce time-of-day pricing they will help their competitors as well by reducing the general prices on the wholesale market. The other electricity companies will just act as free loading parasites and the smart company will be sharing their gains with them.

One solution to this is for the Government to regulate the electricity distributors to ensure that they introduced substantial charges on suppliers for use of the system when there is peak demand for electricity. Thus all electricity suppliers will have a greater interest in introducing 'time-of-day' electricity charging schemes. Then we might see some real smart meters being installed that allow this. There are some small variable charges for using the system at the moment but they are paltry compared to what needs to be done to encourage a decentralised energy system that responds to consumers and clean energy needs rather than the needs of the big electricity companies.

Electricity distributors also need to be given more incentives to develop storage systems on their local electricity 'feeder' systems rather than increase distribution capacity through bigger transformers etc.

However this will not happen if the electricity industry is left to itself. The Government and OFGEM will shuffle a few reports and do nothing of any consequence. All the electricity industry  will do, as witnessed by the current smart meter fiasco, is to channel slogans about how consumers can be greener into feather bedding their own interests. In this case this doesn't extend much further than saving costs on sending around somebody to read the electricity meter! Rather than put all their efforts into ensuring system flexibility the network operators emphasise how we need more power lines to be built.

Organisations like FOE and 10:10 need to get to grips with the smart meter issue and start making demands. Otherwise we shall carry on hearing the same old stories about how we need dozens of gigawatts more of centralised power stations - rather than decentralised, variable renewable energy sources. The committees that decide policy are stuffed with with the representatives of the existing energy establishment. Slogans like decentralised energy and smart energy systems will remain meaningless marketing catchphrases used by the electricity industry merely to reproduce themselves as near as possible in their current form.

Please don't let this happen!

This post has been reproduced in Cleantechnica:
and also in The Ecologist:

Some useful references: