INSIGHT: There’s no answer when the wind doesn’t blow

08 January 2010 17:20  [Source: ICIS news]

By Nigel Davis

An offshore wind farmLONDON (ICIS news)--Cold weather in northern Europe has prompted concern again about UK energy supplies and the country’s gas storage capability.

The sub-zero temperatures have also, however, raised concerns about a much wider issue: the country’s push to renewables and its base load electricity generating capacity.

Spikes in demand during the cold snap have put strain on the supply of gas to major industrial users although the chemical industry has largely been unaffected by supply interruptions.

The perennial problem is of storage capacity: the UK used to produce a lot of gas from the North Sea so it didn’t need much; now that North Sea supplies have dwindled it has to import more. The rate of decline of output of gas from the North Sea is something like 7% a year.  

More storage capacity is being added, although far from enough, and certainly not fast enough, say some. The UK can store only about 4% of its gas needs while Germany and France can each store 20% of theirs.

The UK can balance supply and demand with imports of gas from continental Europe, though an interconnector pipeline, but users suffer from relatively high gas prices.

Prices in the liberalised UK gas market can be volatile and high compared with prices in much more tightly controlled markets across northwest Europe.

But for some, current nationwide concerns about gas supplies draw focus away from a mounting, critical problem for the UK and its industrial as well as domestic energy users.

High pressure sitting over northwest Europe has driven the Jet Stream south and with it milder air from the Atlantic, leading to the current cold snap. And when the pressure is high, the wind tends not to blow.

On Friday, the UK’s wind farms were operating at only about 5% of rated capacity. Wind power was supplying just 0.1% of total grid capacity.

But British politicians want to see a much stronger push towards renewables in the energy supply mix.

The contribution of wind power to electricity production in Germany is about twice that in the UK even though the wind blows stronger off the British Isles. The contract for the largest offshore wind farm in UK waters, on the Dogger Bank in the North Sea, was awarded on Friday to the Forewind consortium.

Britain is potentially advantaged in that it can also use wave and tidal power to help move away from hydrocarbons-based power generation.

But delivering a reliable and flexible base load of power looks as though it will be more of a challenge than many have recognised.

Not surprisingly, perhaps, in the current freezing weather, coal-fired generating capacity has stepped in to balance output, supplying something like 45% of power needs. Yet coal generating capacity will be cut back by close to 50% under plans to rebalance supply and reduce carbon emissions.

Nuclear is an option and will be needed to match electricity demand but the challenges to make progress with a new generation of cleaner coal and nuclear power plants are immense.

The problems highlight the need for decisions to be made sooner rather than later on a balanced and reliable energy complex that can deliver power under challenging conditions of supply and demand.

Chemicals producers are great users of energy most of which is used to control process conditions. They need competitively priced energy options and steady supplies if they are to maintain or improve process efficiencies.

Alternative sources of energy will be needed if the country is to reach its carbon dioxide emission control targets. But the contribution of hydrocarbons to the energy mix has to be fully appreciated.

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By: Nigel Davis
+44 20 8652 3214



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