Wednesday, January 1, 2014

Energy- new players, new plays

The energy world is changing. The USA has drastically reduced its oil and gas imports, in part due to the arrival of shale gas, while despite its rapid expansion of renewables, China has become a net importer of coal, due to its continuing economic boom. Shale gas has yet to make much of a mark in Europe, but the demise of nuclear power and the spread of wind and PV solar has been hitting the profits of the big energy utilities in Germany.

The German situation illustrates what may well happen around the world as renewables expand. Income from nuclear plants has dwindled and the fossil plants can’t compete with PV, backed as it is by the Feed In Tariff (FiT) system, during peak daytime production periods, and wind is often cheaper at night, so the utilities are having to abandon some existing gas plants and are halting plans for new ones. With over 30GW of wind and over 30GW GW of PV on the grid so far and more expected, plans for around 20GW of new fossil plants look like being withdrawn.  See

The result of these changes should be lower emissions and, with no fuel costs, cheaper energy for consumers, offsetting the cost of paying for the FiTs.  However, longer term there is the problem that wind and PV need backup, and gas plants are one option.  Modern flexible coal-fired CHP plants can also play a role, and some are being built in Germany under earlier plans. But unless they have carbon capture and storage added, the result could be increased emissions, although that will be limited since they are replacing older much less efficient plants.  Other types of backup are less problematic. Pumped hydro storage is already used and is being extended, as are other forms of storage. For example the wind-to-gas option, involves converting the excess electricity, produced by wind farms when wind is high but demand low, into hydrogen and then methane, to be used to generate power when demand is high and wind low. Smart grid demand-side management options are also being explored.   But it will take time to get these new systems up and working on a significant scale.

So there are problems, but they are not insurmountable.  That is not the message you will get from the UK Global Warming Policy Foundation (GWPF), which has been relaying (and writing) news items which claim that the German green energy programme is collapsing and that coal is taking over.  And that this trend is spreading. See for example

The GWPF is strongly pro shale gas and nuclear, so it is faced with some difficulties in relation to the USA, where nuclear has been undermined by shale gas, as well as by renewables. For example EDF has withdrawn from the US nuclear market, saying that it sees "no room for nuclear to expand in the U.S. at this time." It will shift its focus in the U.S. to renewable energy sources. Toshiba’s plans for new plants in Texas have been abandoned as have Duke Energy’s plans for new reactors in Florida and in North Carolina.  With existing plants also closing due to poor economics, and wind and PV solar booming, the output from renewables has overtaken that from nuclear.

EDF is still pressing ahead with nuclear in the UK.  Maybe because it’s one of the few places left in the western EU where new nuclear might stand a chance. EDF’s home territory, France, is off the agenda for the moment- since the new government is debating how many of its existing plants to shut down!  Italy and Belgium are no goes. Austria, Ireland and Denmark too. But the UK remains a possibility.   Given the relatively low level of support by the UK government, renewables may not be seen as a big threat  (their UK percentage  contribution so far is small by comparison with Germany) and shale gas will take time to build, if it goes ahead fully.  And of course the government seems willing to provide financial inducements for nuclear – like the £10bn investment  risk guarantee offered to EDF. This may not be enough. When they withdrew from the UK Horizon nuclear programme in 2012, E.ON said  ‘We have come to the conclusion that investments in renewable energies, decentralised generation and energy efficiency are more attractive- both for us and for our British customers.’  Certainly the potential for renewable expansion in the UK is very large, much more so than in Germany, which doesn’t have the same offshore renewable resource.

Japan is not so well blessed with renewables as the UK, but it is trying to develop offshore wind and PV, as part of its attempt to replace nuclear. Shale gas isn’t much an option there, but offshore methane hydrates might be. Otherwise, renewables apart, its gas imports or back to nuclear!

China is the leader in renewables, with around 70GW of wind now in place, followed by the EU and the USA.  As for the rest of the world, renewables continue to look like the best bet for most of the Middle East, although progress in Africa remains slow, less so in Latin America, but everywhere nuclear vendors are looking for toe holds to expand out of Asia- where India and S Korea remain strong players.  The joker in the pack is Russia- buttressed by gas exports and very keen on nuclear, but pretty indifferent to renewables

So overall, with local variations, the global situation is in flux in something of three cornered fight – nuclear v renewables v shale gas, with, as ever, energy saving left on the margins, but coal still threatening to make serious in-roads. Guess which options are best for the planet! But the stakes are high. Ed Davey, UK Energy secretary said  “There are some countries with a very large nuclear industry. If they close, we don’t have a cat in hell’s chance of tackling climate change. I would love to think we can replace that with renewables alone, but frankly we won’t be able to.  See my response:

The global state of play is reviewed in my new book, ‘Renewables; a review of sustainable energy supply options’  published by the Institute of Physics.

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