The United Kingdom faces an crisis. During the next decade electrical generating plants representing one third of the countries generating capacity are slated to be shut down. While the British Government has made some plans, including the construction of a 40 GW wind generation system serious doubts remain about those plans. But the plan is not working according to Professor Ian Fells who describes the British situation as "watching a slow-motion train crash".
The Carbon Trust was set up by the United Kingdom Government
in 2001 as an independent company. Its mission statement reads:
Our mission is to accelerate the move to a low carbon economy
by working with organisations to reduce carbon emissions and
develop commercial low carbon technologies.
A recent carbon Trust report: "Offshore wind power:
big challenge, big opportunity" highlights the cost of offshore wind generation facilities. The report indirectly suggests that British offshore wind generating facilities will cost around
10% more than the the cost of nuclear generating facilities capable of delivering equivalent amounts of electricity. In addition the cost of load ballancing and maintaing capacity reserves add to wind related grid costs past on to consumers. Finally it should be noted that nuclear plants may be up to 4 times as durable as nuclear planys, meaning thatr nuclear would be a far better long term investment.
Carbon Trust reports that Britain plans 40 Gws of wind power @ £65 billion capital cost, About 29 GWs are anticipated to be generated off shore.
Carbon trust does not break out the cost of offshore wind, but assuming the cost of onshore wind to run @ $2,5 billion per GW (£1.25 billion per GW) the capitol cost of 11 GWs of onshore power would run about £13.75. That leaves us with a cost of about £51,25 Billion or about $100 Billion for 29 GWS of offshore wind power. Or about $3.5 Billion per GW of name plate capacity. Internet personality Jérôme à Paris estimated the European cost of offshore wind generating facilities to run from 2200 to 3000 Euros per KW ($3190 to 4350) in 2007. That would place the british estimated price some where below the average cost of wind European wind generators in 2007 and significantly below the price of $5700 per JW that long Islan Power calculated its off shore wind generating capacity was going to cost it, when it pulled the plug on the project in 2006. The word inflation occures twice in the Carbon Trust report, and on one of those two occasions it notes that inflation rates were calculated on the basis of a current consumer price index, which potentially underestimates price inflation in the wind industry, which saw prices nearly double in the last few years.
Carbon trust calculates that 29GW of off shore wind power delivers about the same amount of power as 11GW of nuclear power.
Assuming that the nuclear plants cost $8 billion per GW, the total costs of the nuclear plants wouid be $88 Billion. Or about 12% less than the wind facilities. But the windmills would have to be replaced after 20 to 30 years while the nuks would last 60 to 80 years.
How much would electricity generated under the British Wind scheme Cost? According to the Carbon Trust:
Capitol costs would run £21/MWh or about $40 Per MWh. Ongoing operation and maintenance (O&M) costs add £3.5/MWh or about $7 per MWh. In addition Carbon Trust assumes that it will cost £1.7/MWh ($3.40) to keep the net balanced, and another £2.0/MWh ($4) to insure that reserve generating capacity is available. So we get a little more than $54 per MWh. On the pluse side both nuclear and wind would reduce Brisish natural gas associated generating costs by £11.9/MWh.
Carbon Trust assumes that factory production of parts and manufacturing experience will lower costs. Since the Carbon Trust report pays virtually no attention is paid to inflation, and may well have placed its initial price too low, the capital costs for wind generators may be significantly higher than the report estimates.
Carbon trust argues for mor wind subsidies.
The London Observer (the Guardian's Sunday edition) had a hint of problems with the Carbon Trust wind plan. In a story titled "UK wind farm plans on brink of failure" the Observer reached pessimistic conclusions. The observer found "that planning delays, long delivery times, escalating costs, 10-year hold-ups in connection to the national grid and technical problems in building offshore windfarms" treatened program goals.
The Observer quoted energy analyst Ian Fells: 'The numbers do not add up,' Fells said 'It is physically impossible for the industry to meet its target. The most that any country has ever built offshore is 350MW in a year. But they need to install nearly 10 times that in 12 years, and most will be far offshore. It means they will have to install hundreds a week. They cannot do it.'
The UK wind plan, a plan which the current government believes will both fulfill EU renewable electrical generation mandates, and fill the electrical generation gap,is clearly in shambles. Although the Carbon trust report does not acknowledge it, the Observer noted that the output of windmill manufacturers had already been booked up for the next 5 years. The wind industry is in the grips of a demand driven inflation that has seen the price of wind double during the last 5 years. Considering the wind craze, there is no reason to expect the wind inflation will stop until investors and politicians recover their sanity.
The Observer noted that environmental opposition to windmills in the UK is growing. That opposition does not come from traditional environmental groups like Greenpeace and Friends of the Earth, but from grassroots local movements, that object to windmills because they are ugly, and the will destroy some of the most beautiful landscape (and sea scape) in the UK.
The story quotes Stephen Tinsdale, a wind industry spokes person, 'It can cost up to £200,000 just to put an application in, and you can expect it to take three to four years to go through planning. Two-thirds of all applications are refused. On top of that, there are conditions from the Ministry of Defence over radar and conditions by local authorities on when we can and cannot erect them. England has very few places left where you can build large farms. There are potential delays at almost every stage."
Grid connections are another pressing issue, In Scotland alone, 115 renewable projects with a total generating capacity of 9 GWs, are waiting for grid hook up approval, projects have been told to expect a wait of up to 13 years and are expected to deposit Millions of pounds for the right to hook up to the grid.
The National Grid believes that offshore windmill targets are not credible, and that it cannot hook up more than 12.9GW of off shore wind projects. Government plans call for 5 to 6GW wind farms located 10 to 20 miles offshore. Even the Carbon Trust doubts the practicality of this scheme, and wants to move the windmills closer to land. Some off shore backers are getting cold feet.
Planners may also have underestimated the challenge of building a large number of very large off shore windmills. An enormous amount of resources will be needed. One executive stated:
'We are going to need different boats, a whole fleet of vessels, offshore cable installers, helicopters. We are already getting close to our hurdle rates. If things get worse, it makes it a marginal decision whether we invest in them or not. It's all very risky. Because the UK is a difficult place to do business, the utility companies will just go elsewhere. We are not threatening to go, but if a utility finds a project which it can build quickly, it will go there. We are committed to the UK, but it is difficult.
Until you get absolute consent from government, people will dither and it will take longer to install farms. Industry costs have become very, very expensive, and both government and companies need to work hard to tackle this.'
What we have is a premature plan, paradoxically premature, because the implementation of the plan appears to have begun too late. Yet the implementation is being delayed by planning flaws, and a lack of commitment. Both the Government and the people of the UK lack a sense of urgency and a commitment to resolving the crisis. They are not fully aware of what is going to happen if the crisis is not addressed, and completely unaware of what will be neccessicary to address the crisis. The crisis threatens the standard of lliving enjoyed by the people of the UK, and threatens their ability to not pay attention to it. Unfortunately if the people of the UK wait till the crisis is upon them it will be too late. In this they are not alone. Nor is this the only energy related crisis faced by the people of the UK and the rest of the world during the next few years.
Professor Fells notes,
From a global perspective, the conviction that “peak oil” and “peak gas” theories, which predict worldwide supplies will peak in the next few years (perhaps they already have, with oil at 86mbbls a day), and then go steadily downhill, is gaining ground. This fuels the growing belief that gas from the Middle East and Russia may
not be available to satisfy the growing demand from Europe and the UK over the next 10 years (before a new strategy of new-build nuclear, renewables in quantity from a Severn barrage and coal-fired stations with CCS come on stream). Competition from China and India further diminishes our ability to lever access to affordable,
secure hydrocarbon supplies. We have drifted into a situation resembling a slow motion train crash. South Africa has already hit the buffers with disastrous effects on its economy. Energy is the lifeblood of growing civilisations. Without it we slide into anarchy. Fortunately, there are high-technology solutions if we care to take them.
Fells Continues:
Nuclear power will have to provide the lion’s share of CO2-free electricity for reasons of both security of supply and cost. . . .
We need to build 46 new stations over the next 40 years (according to the Royal Commission of Environmental Pollution scenario of 2000).47 In France, electricity supply is 78% nuclear, and at the height of their building programme they were commissioning a new reactor every two weeks.
Such plans cannot be realized without much better planning and much greater attention to the implementation process than has been demonstrated by the UK Government to date.
I call attention to the British problem because much of the same set of problems is about to strike the United States. We cannot afford to let the slow motion train wreck happen.