UK energy uncertainties

The UK net zero carbon plan involves the installation of 70 million solar panels, 6,000 wind turbines, and 4,500 km of underwater electricity cables and will cost about £240 billion. So it’s quite ambitious, with, according to a new study, almost one in five of the public believing that the UK’s 2050 net-zero target is bad for the economy and almost three-quarters of believing that new climate policies will make their lives more expensive. It seems that they are starting to believe claims about the high cost of the transition that have been made by right-wing politicians and some web pundits. 

However, in addition to political opposition to net zero from Reform & the Tories, BNEF says that it has also got less than 100% backing from some energy practitioners. Kate Mulvany, principal consultant at Cornwall Insight said ‘Whether or not it ultimately turns out to be good value is only something that can be determined in the long term,’ while Andy Brown, deputy board chair at Orsted and a former executive at Shell Plc said ‘at the moment it looks like we’re one of the most expensive places in the world for energy’. 

Costs still do look to be an issue.  BNEF quoted Greg Jackson, Octopus’ CEO, who aimed that ‘there’s currently no plan to lower bills. Unless there is a radical proposal from government quickly, support for net zero is going to collapse.’  Pete Aston, a specialist connections engineer at power grid consultancy Roadnight Taylor said that ‘with the cost of grid upgrades, the cost of generators that are going to connect to the network, I just can’t see prices coming down. The government must know that there’s a real risk bills could go up rather than down.’ 

They may be overstating the problems, but, with energy prices still at an all-time time high, the government does seem to be facing credibility issues – even if, as I argued in an earlier post, not all of that may be due to the cost of renewables. Fossil fuel and nuclear are also expensive- indeed, arguably, more so. 

Nevertheless, a common view from the right is that all would be well if we ditched renewables and went back to fossil fuel –for example using more north sea gas.  A problem there is that there isn’t much left. At most 5 years, may be less, while opening new fields would add less than a year’s worth more. And it’s not much cleaner than LNG imports, as is sometimes claimed. And it’s not cheap to import LNG. That’s may be why some on the right want to look again at fracking for shale gas, despite that looking not too viable commercially in the UK and despite its environmental impacts. 

Then there are those, including the government, who want more nuclear, and are pushing for  the removal of what they see as blocks to its rapid development with it being claimed that  the current nuclear regulation regime is not fit for purpose. We might all agree with that from a variety of perspectives! Although its dangerous to play fast and loose with nuclear safety issues. 

However, leaving that aside, it can also be argued that we are not developing UK renewables as well as we might. For example, some projects are poorly planned, and are imposed without sufficient local consultation, so leading to local opposition to solar farms and also wind farms, for example in remote areas like the Scottish Highlands.  Some solar farms are controversially large and on land that arguably ought to be used for food growing,  and it does seem like wasted money to build wind farms in areas where the power can’t always be used due to weak local grids. 

There are certainly some complex strategic planning and infrastructure issues- for example UK needs to be rewired to deal with renewables and that will be costly and also possibly invasive. The UK power system used to have very big power plants usually quite remote from cities, feeding power to the national HVAC 400kV grid, then tricking power to users eventually on 11kV local grids. Now we have small green power plants feeding power over the local grids much of it then going up to the national grid for use elsewhere. At times the local grids can’t cope. And the few big power plants we still have, most of them  inflexible nuclear, have ‘must run’ priority, which means that the small local green plant output then has to be curtailed for a while. That’s very wasteful of valuable green power: so something has to give. But the government wants more large inflexible nuclear plans and it’s been argued in the past that it’s cheaper to curtail wind etc than to build more local links, or provide storage. 

Fortunately, that is now beginning to change: more storage is needed to balance variable renewables and more grids are need due to the advent off shore wind farms- and also large new nuclear plants. But finding the optimal mix of power type and scale is going to be hard- for example nuclear is costly and often unpopular. Big new grids are also costly and unpopular. Smaller wind and solar projects may be cheaper and more acceptable, but not everywhere. 

Location, as ever, is a key issue in energy planning and energy economics.  For example, it was suggested recently that, if there was a local glut of power from local green plants, it could be dumped at low prices locally, via cheap local grids. But the green power companies were not too keen on the idea of local discount pricing- their profits would fall!   Local community-owned generators might be willing to face that.   And some remote locations with good local green energy availability might attract new large energy using projects like AI/data centres.  But would that be welcomed in remote areas?  Or would they be happier with more pylons to take the power elsewhere?  The government has recently offered to compensate local communities  faced with new grid links.  Does that make sense- or is it bribery?

The Labour government has clearly been struggling with all these issues and, after a long debate, has decided that it won’t back localise ‘zonal’ pricing. But it has produced strategic  plans for solar and wind infrastructure development – and although they are quite ambitions, setting out with challenging targets setting out a path to a clean energy future, the plans may not be detailed locally enough for some.  There is clearly a lot to do to ensure we have an economically viable, flexible and balanced green energy system.  And meanwhile we may have to expect some more negative press and political commentary, as I will explore further in my next post.