Grasping the UK’s energy nettle

Tomorrow (Tuesday 27 July) energy secretary Chris Huhne will deliver the annual energy statement to parliament. Simultaneously DECC will publish its 2050 Pathways analysis, laying out the task of overhauling Britain’s power generation and transmission systems over the next 40 years.

Neither Huhne’s statement nor the Pathways analysis is likely to make for comfortable reading.

Britain’s electricity is generated by plant with a total capacity of around 75GW. Average demand is about 40GW and, in the depths of winter, peak demand can rise to 60GW. Demand from industry dipped during the recession, but is picking up again and domestic demand grew by 2.4 per cent from 2007 to 2008.

Some of the UK’s nuclear generators have reached the end of their operational lives and some old coal-fired power stations pollute too much to continue in operation.

The European Large Combustion Plant Directive (LCPD), first drawn up in 1988, imposes tough limits on emissions of sulphur and nitrogen oxides. To stay within those limits, coal-fired stations will have to fit expensive scrubbing equipment, meaning some will be uneconomic to run.

Under the Directive, unscrubbed plant is allowed to operate for only 20,000 hours from 2008 until they close altogether at the end of 2015.

Consequently, the government estimates that by 2020 we will lose 20GW of our generating capacity. Other analysts say this is a conservative figure – no pun intended – and the actual loss will be more than a third of generating capacity in this time.

Before the recession punched a hole in demand, economists were predicting rolling blackouts in Britain from 2012 onwards. The recession may have merely delayed that rather than avoided it.

Britain is also committed to a stringent legally binding carbon-reduction programme to tackle climate change. The Climate Change Act dictates that by 2020 Britain’s carbon emissions must be 34 per cent lower than they were in 1990 and 80 per cent lower by 2050.

The first report of the Climate Change Committee (also known as the Turner report) published in October 2009, calls for “deep decarbonisation” to cut emissions from power generation by almost 50 per cent by 2020.

Furthermore, we have promised that 15 per cent of all our energy needs (heat, transport and power) will come from renewable sources by 2020. Given the limited scope to achieve this in transport and heat, realistically 35–40 per cent of our electricity will need to come from renewable sources. And to cut emissions from transport and heating, we are likely to replace petrol and gas with electrical power.

Huhne has declared the task nothing short of reshaping the UK economy to focus on a low-carbon future.

According to a report published by the energy regulator Ofgem on 9 October last year, an investment of some £200bn is required to rebuild our energy infrastructure, most of which will have to come from the private sector because the public cupboard is empty.

The chancellor’s emergency budget, delivered in May, has already prepared business for upcoming changes to the Climate Change Levy.

The practical challenge of balancing the competing demands of energy security, affordability and carbon-reduction (and eventually carbon elimination) is achievable, DECC sources say. In fact, it is feasible – from an engineering perspective – without resorting to a “war footing”, although it will require some considerable changes in behaviour from individuals and industry.

But the fourth hurdle – ensuring public acceptability – may yet prove insurmountable.

Huhne has said that while carbon-free power generation is under construction, the main remedy to prevent blackouts, missed emission targets and rising energy prices will be energy demand reduction. Inevitably, that will make life in Britain a little less comfortable and may require compulsory visits from the insulation police if the carrots provided by the Green Deal for households don’t provide sufficient stimulus.

The coalition government will not be able to effect the changes required before an election is due in 2015. That means it will have to persuade voters that it is worth putting up with pain for the next decade so as to enjoy a low-carbon future in 20 to 30 years.