Why we need a British energy policy re-set in the national interest

While the lockdown has very publicly destroyed jobs and businesses the hidden task of keeping electricity flowing has seen National Grid desperately trying to tackle its worst nightmare; how to balance the system when increasingly erratic electricity supplies outstrip demand.

This challenge has been growing for some time and the lockdown has forced the issue, particularly as weather-dependent renewable power has soared.

While electricity demand at the peak of the lockdown was down by nearly 20% the sunny and windy days saw renewables setting records, sometimes supplying up to 55% of daytime electricity.

But reduced demand alongside increased wind and solar supplies presents a serious balancing challenge, as well as an opportunity to re-think future strategy.

Over the last four months tens of millions of pounds have been spent on discarding renewable energy and turning off other power stations to prevent them overloading the system and causing blackouts.

The bill to pay renewables to dump power and a nuclear plant to turn down is likely to come in at around £1bn for spring and summer. This will carry big implications for consumer prices, flexibility of supply and the low-carbon transition.

National Grid has said it expects to spend £500m more than normal this year to keep power flowing because of reduced demand.

Another policy mismatch, as domestic sources are producing more power than we need, is that Britain continues to import coal- and gas-fired electricity from Europe through undersea cables called interconnectors.

This is despite the misleading claim that Britain has just gone two months without using coal-fired electricity.

Not only are these emissions hidden and offshored into Europe, along with the energy jobs, but there is arguably a major conflict of interest here.

As a public company with responsibility for keeping the lights on National Grid has large financial interests in these cables and perhaps unsurprisingly is keen to build more, even if they are displacing domestic and green power generation.

The Commons BEIS Select Committee and the Competition and Markets Authority should look into this and interconnectors’ impact on energy security and market distortion; a new British carbon border tax could be the answer.

The pandemic has reminded us how much we are dependent on electricity.

The lockdown has necessitated a near-virtual existence as we work from home and try to keep entertained.

Whether it be video live streaming for work, online shopping, virtual learning for kids or the critical power demands of the NHS, the supply of electricity has shown it is the backbone of modern civilisation.

Any interruption or break in supply for our digital society would be catastrophic.

The challenge of supplying and balancing electricity supplies in these changed circumstances is now paramount as traditional peaks in demand flatten out and more and more power supply is dependent on the weather, such as wind and solar. Consequently a renewed focus after lockdown on energy security will be crucial as it is key to our future prosperity, growth and stability.

There will be a new energy White Paper later this year when the UK Government can outline its plan.

As a result of the pandemic, electricity demand has reduced as industry, businesses and transport networks slashed their use.

This situation has thrown down a real challenge to how we manage and balance electricity supplies.

While demand has fallen off the share of the grid supplied by renewable power has grown.

Though this is good news ecologically it raises a serious issue about keeping the wider supply industry stable, balanced and profitable.

The key here is the need to build a more flexible, reliable, clean and secure electricity supply industry going forward.

A good example was The Queen’s televised Coovid address to the nation on April 6th which caused power demand across the UK to soar just as the sun had set 30 minutes before and wind speeds had also reduced.

National Grid’s control room reported the spike in power demand; an approximately 600 megawatt TV pick-up in the moments after the address which is the equivalent of 190,000 ovens switched on at once.

Demand dropped before the Queen’s speech as we stopped what we were doing to watch, then picked up dramatically afterwards as we collectively resumed where we had left off.

This is a topical example of what happens when electricity from wind and solar has been supplying the majority of demand, but quickly falls away.

Systems need to maintain high flexibility in order to be able to ramp up other sources of reliable generation quickly when the pattern of supply shifts, such as when light and wind drops.

This is best done with gas fired plants which can respond quickly.

Also, without new viable energy storage then large supplies of weather dependent power always risks undermining the stability of the grid.

A consequence of the virus is the postponement of the COP26 climate conference until next year.

Ministers now have more time to consider how they can better showcase leadership on energy and climate action.

The UK starts from a position of strength.

In 2019, it became the first major economy to legislate for a net-zero target for greenhouse gas emissions, and can also boast the fastest rate of decarbonisation among G20 nations this century, but it must do much more to strengthen energy security.

A wider point here is the high carbon footprint of other UK energy imports as well as imported electricity.

The UK will be locked into high carbon gas imports such as long distance shipments of liquefied natural gas (LNG) so long as we neglect our own gas resources.

Irrespective of the pollution then the sources of those long term gas suppliers should also raise eyebrows.

It is forecast that the UK will depend on Qatar for growing amounts of its gas in the future. Importing gas on LNG ships from the Arabian Gulf, which travel 6,000 miles over 18 days before they berth at Milford Haven is one of the world’s longest energy supply lines and UK dependence has grown in recent months as domestic gas producers have struggled with lockdown.

The process of cooling and loading the LNG – and then unloading and warming it back into a gaseous state is carbon intensive; this carbon burden must be acknowledged rather than being hidden and ‘offshored’.

Since energy policy is not devolved, the Welsh Government must use its planning powers to help steer policy and swerve bad schemes which do nothing for air quality, green growth, carbon reduction or keeping bills down.

The recent collapse of the Swansea Bay tidal lagoon plan is a case in point.

This was ultimately a victim of the project’s poor economics and its inability to convince ministers that its subsidy would be value for money in the medium term.

But if economics killed a tidal scheme why aren’t air quality and emissions concerns blocking a new waste plastic energy burner at Newport?

Plans to convert the old 1950s Uskmouth coal plant to burn ‘waste derived plastic pellets’ shipped in from England clearly needs a thorough review and closer inspection.

One important question will be its emissions and impact on local air quality as well as more detail on the pellets themselves.

What are they made from; how will they be handled on site; what are their pollution characteristics when incinerated?

Where will the waste ash go?

The fallout from Covid-19 allows for a British energy policy re-set in the national interest to deliver more flexibility and security of supply.

Carbon accounting must stop making imports of key raw materials and electricity preferential over cleaner domestic production.

The present position is both disingenuous and bad policy.

  • Tony Lodge is a research fellow at the Centre for Policy Studies and author of The Great Carbon Swindle – How the UK hides its emissions abroad