The Energy Trilema: The Challenges of Energy Security and Affordability of our Future Energy Supplies Institution of Civil Engineers Leeds: October 14 th 2014 Recipient of James Watt Gold Medal Keith Tovey ( 杜伟贤 ) MA, PhD, CEng, MICE, CEnv : Reader Emeritus in Environmental Engineering , Norwich 1 Business School, University of East Anglia, Norwich
The Triple Challenges of Carbon Reduction, Energy Security and Cost of our Future Energy Supplies Some of the Key issues • What are key issues of Energy Security, particularly in the next few years with older stations closing and UK now dependent on over 50% of its gas from imported sources and also two thirds of its coal? • What might the future electricity generation mix look like? • How does UK energy mix compare with that of other countries? • What contribution might “ Fracking ” provide for security for electricity generation? • To what extent would variable renewables such as wind cause issues on the secure supply of electricity? • What are the cost implications of the options available? • What is the impact of support for renewables on the price of electricity? • Are the lights likely to go out over the next few years? 2
Wholesale Cost of Electricity Wholesale Electricity Prices 12 UK no longer Oil reaches Severe Cold self sufficient $130 a barrel 10 Spells in gas Langeled Line to Norway 8 p/kWh 6 4 2 UK Government Projection in 2003 for 2020 0 2001 2003 2005 2007 2009 2011 2013 2015 wholesale prices updated to 16 th September 2014 Weekly volume weighted average Wholesale Prices Wholesale prices are 2.5 times what they were in 2004 3
Variation in Wholesale and Retail Electriity Prices Electricity Price Indices (2001 = 100) 600 wholesale 500 retail 400 300 200 100 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 In recent years, electricity retail prices have varied much less than wholesale prices. However in recent months retail prices have risen above long term wholesale trends. 4
What are causes of price rises in recent years? • In period 2004-13, Electricity Bills for average household have risen from ~ £288 to around ~£577 or ~100% * How much can be attributed to support for Renewables under the Renewable obligation? • Support for All Renewables in 2012-13 was £1.99 billion ** . However 313,569,728 MWh was supplied representing an increase of 0.69 p/kWh in retail price of electricity • At typical domestic unit prices of 13 – 14p per kWh this represents and increase of just 4.9%. • Of this the impact of onshore wind on bills in 2012-13 was 0.22p per kWh or ~ 1.7%. For offshore the figures are 0.16p and 1.2% respectively. • Wholesale prices had risen from 2p in 2004 to 4.5p per kWh by end of 2013. * Data from Quarterly Energy Prices from DECC Website ** OFGEM Annual Report 5
CO 2 Emissions and Electricity (kg/kWh) 1 EU OECD Developing Oil Producing 0.8 World Average 0.550 UK 0.6 France 0.4 0.2 0 Norway Austria Netherlands Australia Switzerland Sweden Brazil France Belgium Spain Russia Qatar Italy Japan UAE UK Germany USA Mexico Denmark Saudi Arabia Libya China India Poland Overall: UK ~500 gm/kWh: France ~80 gm/kWh Saudi Arabia ~700 gm/kWh 6 * Extracted from IEA Statistics in Jan 2014 – data relate to 2010 6
Electricity Generation Mix in selected Countries 2010 Poland France Germany Sweden UK Saudi Japan USA Switzerland Norway Arabia Russia China Brazil India UK-2013 Coal Oil Gas Nuclear Hydro/ Tidal/Wave Other Renewables Biofuels/Waste 7
Impact of Electricity Generation on Carbon Emissions. Approximate Carbon Emission factors during electricity generation including fuel extraction, fabrication and transport. Fuel Approximate Comments emission factor per kWh ~900 – 1000g Coal Depending on grade and efficiency of power station Oil ~800-900 Depending on grade and efficiency of power station Gas (Steam) ~600g Conventional Steam Station Gas (CCGT) ~400g Most modern stations may be as low as 380g 5 – 10g Nuclear Depending on reactor type Renewables ~ 0 For wind, PV, hydro Varies on hour by hour basis Overall UK including ~541g* depending on generation mix transmission • Transmission/Distribution losses UK ~ 8%: India ~ 24% 8 * DECC Guidance for reporting July 2014
Options for Electricity Generation in 2020 - Non-Renewable Methods Predicted Cost in 2020 Potential contribution to electricity supply in Generation 2020 and drivers/barriers 2011 (*) Dec 2013 (*) Type 8.0p Gas CCGT 0 - 70% (at present 25- Available now (but [5 - 11]/kWh 8.5p/kWh 35%) gas is running out) 120 Billion Cubic Metres Impact of 100 temporary switch to coal 80 generation 60 Actual UK production Import Actual UK demand 40 Projected production Gap Projected demand 20 Actual Production Actual Demand 0 1998 2002 2006 2010 2014 2018 Gas supply has become critical at times – e.g. at end of March 2013 – down to 6 hours supply following technical problems on Norwegian Pipeline. 9
Options for Electricity Generation in 2020 - Non-Renewable Methods Predicted Cost in 2020 Potential contribution to electricity supply in Generation 2020 and drivers/barriers 2011 (*) Dec 2013 (*) Type 8.0p Gas CCGT 0 - 70% (at present 25- Available now (but gas [5 - 11] 8.5p/kWh 35%) is running out) Long construction 5 - 10% (France 75 - 7.75p 9.25p times (capital cost for nuclear Hinkley increased 80%) - (currently 18- [5.5 - 10] (Hinkley)/ fission from £16 billion to 20% and falling) /kWh kWh £24.5 billion Nuclear New Build assumes one new station is completed each year after 2020. 14000 New Build ? Installed Capacity (MW) 12000 Projected 10000 Actual 8000 6000 4000 2000 0 * Energy Review 2011 – Climate Change Committee May 2011 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 * Energy Generation Costs: DECC 2013 Central Projection 10
Options for Electricity Generation in 2020 - Non-Renewable Methods Predicted Cost in 2020 Potential contribution to electricity supply in Generation 2020 and drivers/barriers 2011 (*) Dec 2013 (*) Type 8.0p Gas CCGT 0 - 70% (at present 25- Available now (but gas [5 - 11] 8.5p/kWh 35%) is running out) Long construction 5 - 10% (France 75 - 7.75p 9.25p times (capital cost for nuclear Hinkley increased 80%) - (currently 18- [5.5 - 10] (Hinkley)/ fission from £16 billion to 20% and falling) /kWh kWh £24.5 billion nuclear not available until 2040 at earliest not until unavailable Nuclear New Build assumes one new station is completed each year after 2020. fusion 2050 for significant impact [7.5 – 15p] Available now: Not 9.5 – 13.4p/ "Clean Coal currently ~40% but viable without Carbon - unlikely Coal" scheduled to fall Capture & kWh before 2025 Sequestration * Energy Review 2011 – Climate Change Committee May 2011 * Energy Generation Costs: DECC 2013 Central Projection 11
Options for Electricity Generation in 2020 - Renewable Predicted Cost in 2020 Potential contribution to electricity supply in Generation 2011 (*) Gas Dec 2013 (*) 2020 and drivers/barriers Type 8p Gas 8.5p 9.0 – 9.9p / On Shore ~20% [~15000 x 3 available now for ~8.2p +/- 0.8p kWh Wind MW turbines] commercial exploitation 1.5MW Turbine At peak output provides sufficient electricity for 3000 homes – operating for 12 years On average has provided electricity for 700 – 850 homes depending on year * Energy Review 2011 – Climate Change Committee May 2011 * Energy Generation Costs: DECC 2013 12 Central Projection
Options for Electricity Generation in 2020 - Renewable Predicted Cost in 2020 Potential contribution to electricity supply May 2011 (*) Dec 2013 (*) Generation in 2020 and drivers/barriers Gas 8p Gas 8.5p Type 9.0 – 9.9p/ On Shore ~20% [~15000 x 3 available now for ~8.2p Wind MW turbines] commercial exploitation +/- 0.8p kWh some technical 11.5 – 12.0p/ Off Shore 12.5p development needed to 20 - 40% Wind +/- 2.5p kWh reduce costs. * Energy Review 2011 – Climate Change Committee May 2011 * Energy Generation Costs: DECC 2013 Central Projection Scroby Sands has a Load factor of 28.8% - 30% but nevertheless produced sufficient electricity on average for 2/3rds of demand of houses in Norwich. At Peak time sufficient for all houses in Norwich and Ipswich 13
Options for Electricity Generation in 2020 - Renewable Predicted Cost in 2020 Potential contribution to electricity supply in Generation May 2011 (*) Dec 2013 2020 and drivers/barriers Type Gas 8p (*) Gas 8.5p Micro Hydro Scheme operating on Siphon Principle installed at Itteringham Mill, Norfolk. Rated capacity 5.5 kW 11p for Hydro (inc. technically mature, but <2MW Not Costed 5% mini - micro) limited potential projects * Energy Review 2011 – Climate Change Committee May 2011 * Energy Generation Costs: DECC 2013 Central Projection 14
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