One in ten British power stations could be forced to shut by the spring of 2013, 2 and a half years earlier than expected - a new independent energy consultancy report shows. The news raises fresh concerns that the UK Government has not done enough to avoid a looming energy gap that could lead to blackouts accrosss the country, in addition to the energy security worries caused by Russia's recent threat to cut off Ukraine's gas supplies to Europe.
Under the European Union's Large Combustion Plant Directive four years ago, companies operating old coal and oil-fired plants were given the option to spend hundreds of millions of pounds to upgrade them to comply with tougher pollution standards. Those that “opted out” of the programme - nine plants representing about 15% of UK power supply - were given 20,000 hours to operate, starting from January last year through to the end of 2015.
Based on research from the energy-consultancy group Utilyx, several of these plants have been running at historically high rates that would put them out of commission much sooner than originally thought. The coal-fired plants at Kingsnorth in Kent, owned by Eon, Scottish Power’s Cockenzie plant, RWE-owned Npower’s stations at Tilbury and Didcot, and Scottish & Southern’s Ferrybridge plant will all be decommissioned by the spring of 2013 if current patterns continue.The stations generate some 7.6GW of electricity - 10% of the UK’s total capacity.
The first of them, Scottish Power’s 1.2GW plant at Cockenzie, which generates enough power for 1m homes, will close as early as September 2010 based on current rates. The research was based on analysis of running patterns at the plants from January 1 this year to the end of October.
“It is likely that a significant proportion of the UK’s opted-out coal plant will close earlier than 2015, with the impact felt around 2013,” said Kevin Akhurst, managing director of generation at Npower. When companies decided whether to comply with the EU’s so-called Large Combustion Plant Directive (LCPD) four years ago, those plants that opted out were envisaged as “peaking plants” to be used only at time of maximum consumption and power prices. Most of them, it was thought, would easily last until 2015.
Chris Bowden, chief executive of Utilyx, said that because of the price of coal relative to record high prices of electricity and rising power demand, the opposite has happened. “When companies made the decision to opt out it was a very different world. The idea was that they would be peaking plants but now they are running as base-load providers,” he said. “The technology of some of these power stations would make them like classic cars, but now they are ready for the scrapheap.”
The data will add to fears about UK energy security after the Russian gas giant Gazprom threatened to cut off supplies to Europe due to a row with Ukraine. Next year is critical for the UK energy industry. In January, Ed Miliband, the secretary for energy and climate change, is expected to decide on Eon’s controversial proposal to build a new 2GW plant to replace the Kingsnorth facility. It would be the UK’s first coal-fired power station in more than three decades and is an acid test of the government’s stance on coal and supply security. New energy and planning bills will also come into effect in April, which the industry hopes will pave the way for swifter building and planning permission for new projects, one of the biggest obstacles to the construction of plants.
Conwy County Borough Council has backed plans for a pilot tidal energy scheme off the North Wales Coast.
The £150 million scheme at Llanddulas in North Wales would provide a testing facility for turbine designers and manufacturers, and assess the environmental impact of turbines.
The project was given approval by the council as part of a strategic regeneration strategy for the Conwy coast, prepared by consultant Capita Symonds.
Paul Terry, Capita Symonds, said: "Tidal power will play a key role in providing a sustainable energy source for future generations. The North Wales coast is an ideal place for such a scheme as it’s blessed with a good tidal range and suitable ocean depth." He added that the project could also help protect the coast from rising sea levels, storm surges and coastal erosion.
The regeneration strategy also calls for seven new visitor centres costing £30m should be built at key locations stretching from Conwy to Rhuddlan. But North Wales Tourism chairman Chris Jackson raised doubts over whether the proposals could realistically be funded in the current economic climate. The council’s approval now means that Capita Symonds will seek funding for feasibility studies and investigations to develop a business case for the scheme.
Climate Change Minister, Greg Barker, has launched a consultation on the Government's strategy to boost energy self-sufficiency in communities.
The public debate about microgeneration will look at ways to ensure the quality of generating technology and its installation, how to improve available products, and how to develop the microgeneration supply chain while providing more accessible advice.
The consultation follows last week's news that the Government is to overturn a ban on councils selling "green" electricity back to the national grid by the end of the year.
Mr Barker said“I want to see more homes, communities and businesses generating their own energy. We can literally bring power back to the people.Microgeneration is a key part of this vision.
“By becoming more self sufficient we can create sustainable local energy economies. People and communities can save money on their fuel bills at the same time as generating an income and cutting carbon. I want to work with industry to overcome the challenges it is facing. Together we will create a marketplace for jobs and prosperity alongside products and advice which people trust.”
More information can be found on the Microgeneration Strategy consultation web page
A report from the think-tank Civitas warns that the increasing cost of energy, which has been driven up as a result of green policies could hit the UK's manufacturing sector - just as the country needs industry to help boost the economy.
The report said efforts to tackle climate change through cutting greenhouse gas emissions and increasing renewable energy generation could significantly push up energy bills for business.Extra costs are put on energy from policies including the EU's emission trading scheme, the renewables obligation to boost investment in technology such as wind power, and the climate change levy which taxes energy use in businesses and the public sector. Also, the Labour Government's climate change strategy had already added an extra 14% on homeowners' electricity bills and 21% on business bills.
Last year's renewable energy strategy could have created "surcharges" of up to 70% for businesses, and 33% for domestic customers by 2020, the report from Civitas claimed. The study warns the new coalition Government's energy policy could be as damaging to manufacturing industry as the previous administration.
The review by economist Ruth Lea and Jeremy Nicholson, director of lobbyists the Energy Intensive Users Group, said the UK was badly placed to meet its commitments to boost renewables as it was starting from such a low base. Even without the extra costs imposed to pay for climate change policies, Britain has high industrial electricity prices, which threaten its competitiveness.
Ms Lea said: "The economy desperately needs a competitive and thriving manufacturing sector if it is to prosper. Competitive energy prices are vital to the success of manufacturers, especially energy intensive users.Government energy policies are, however, remorselessly driving up energy costs thus risking the 'migration' of manufacturing plants to economies where the costs are lower."