Dear Mr Hezlet, Thank you for your piece from which I learned several things.
But in judging the worthwhileness of our transitioning to renewables I thought you missed two important points.
1) Its not only about climate. Installing rooftop solar is like a second mortgage - this one saves you paying for energy bills life long.
2) Transitioning to renewables saves the UK import bill on the imported fossil fuels. So our balance of payments will be less in the red, a good aim I would think.
3) For the UK to transition helps put pressure on oil exporters to look at other alternatives - eg exporting electricity instead.
4) Electric road vehicles have same effect, so another reason to embrace these as well.
5) What are the costs of transitioning our railways to all electric, I wonder? Again would reduce our imports of oil still further.
Well a few thoughts for you. be interested in your answers. Ian
1. Agree with the sentiment - but I think rooftop solar is economically 'over rewarded' at present - in that for every kwh of grid electricity you avoid, you can dodge not only wholesale costs, but levies, capacity market costs and some network costs that instead got borne by others. Solar still has value in terms of avoided gas (and carbon) costs, but I want broad based cheap electricity for everyone - to ensure we don't encourage too much defection from the grid. I wrote a little on the topic here - https://britishprogress.substack.com/p/post-haste-lets-care-for-our-electrical
I am very very impressed with the way solar technology and costs have developed. Will be of massive global significance, especially in countries that have lots of electricity use in summer (e.g. those that need lots of air conditioning)
2. Thats fair - the North Sea has declined a lot already, so reducing imports of fossil fuels should help our economic resilience. There is a balance here though - in that most of our fossil fuels use goes into powering cars and heating homes - which can be electrified to reduce imports very considerably (heat pumps/ev's much more efficient than gas boilers and combustion engines) - so I'm prepared to tolerate gas remaining on the electricity system for longer then consensus of it helps reduce electricity costs and speeds up electrification.
3. Perhaps - I'm nervous about too much interconnector reliance for national security reasons. But agreed that of fossil fuel demand drops, exporters might look at different business models which would be positive.
4. Agreed on EV's!
5. Very much agreed on electrifying the railways too!
But are there optimum prices for electricity - ones that won't discourage electrification of railways and much else, but not be too low to discourage the transition to renewables? We need to do both. Ian
Ed … from my perspective it’s been a year well spent.
Excellent article, useful insights and some refreshingly pragmatic suggestions (that’s a compliment by the way from a jaded engineer who has read far too many ‘thoughts’ on energy policy from policy wonks) for how to move forward.
Nice article Ed, broadly agree, have a few thoughts
1. As you say at the end, many of the pathologies making our nuclear so expensive apply to other infrastructure including transmission. A world in which we sort out nuclear costs is maybe also a world where we can justify more wind north of the major constraints
2. I personally don’t see that north sea licenses matter much either way - they currently contribute 4% of corporate tax which is itself 8% of total tax revenue, and reserves do not seem to me big enough to meaningfully impact prices. I’d grant licenses largely because it’s good politics domestically. But the main opposing argument is that it would hurt our diplomatic credibility when pushing for other countries to decarbonise. This is definitely a point up for debate, but I think needs engaging with
3. I don’t understand why we’re not more focused on onshore wind. It is already reasonably priced despite atrophied supply chains and continuing restrictions on things like turbine height. We can surely knock the price down further - and this would seem to be an obvious way to bring down bills
1. Agreed - we have built both nuclear and transmission much more cost effectively in the past and need to get back to doing so! Also quite interested if we can get dynamic line rating working so we can increase transmission capacity when it is windiest.
2. Agreed its not the biggest tax - but every little helps and I like its countercyclical properties (income when we are under pressure from a fossil fuel spike. No strong view on reserves - just note that the oil and gas industry has been incredibly innovative in the last decade and technology might allow us to get at more than expected. I want to continue production for as long as we need it - and I'm worried that prematurely losing volumes will mean infrastructure closes early etc.. Your point on diplomatic credibility may well be right - I just don't have any faith that anyone is following the UK for energy policy pointers at this point, so it's not something I weight very heavily.
3. Good point - I have impressed and surprised at the divergence that has opened up between offshore and onshore wind. Will be interesting what the economics look like for repowering projects where some of the infrastructure is already in place. I suspect it gets relatively little attention at the moment due to boundary constraints - but if its cheap enough and transmission costs can be reduced then there should be scope for more of it.
As a country we've become incapable of building any major infrastructure either cost effectively or on time. A lot balme is laid at the door of govt and bureaucracy but thats not all of it. We are paranoid of our shadows these days and completely risk adverse is also a contributor.
We should be extracting every last molecule from the N.Sea where ist cost effective thats energy security which should the priority not cost.
Nobody wants onshore wind anymore so you can forget it unless its imposed. Repowering is a good option but means removing turbines as they need to be taller and grid connection capacity means no additional generation
Matt, thanks for these thoughts. Which countries are we trying to convince and to what competitive advantage for the UK? A weaker poor country has less power, and diminishing North Sea revenues contributes to less diplomatic influence too. Reserves also depend on investment, there may be many more barrels. We can use those reserves, especially gas for 95% clean power with CCS - at lower cost than AR7 wind CFD prices.
Wind and solar are unsuited for grid supply, intermittent and meet none of the essential technical requirements. They only exist with the support of conventional generators, which we run in parallel, i.e two types doing one job.
There is no scientific reason for decarbonise, despite the wide spread belief. Science is not an authority, but a search for answers and there is not one iota of proof that CO2 is driving our climate.
Dear Mr Hezlet, Thank you for your piece from which I learned several things.
But in judging the worthwhileness of our transitioning to renewables I thought you missed two important points.
1) Its not only about climate. Installing rooftop solar is like a second mortgage - this one saves you paying for energy bills life long.
2) Transitioning to renewables saves the UK import bill on the imported fossil fuels. So our balance of payments will be less in the red, a good aim I would think.
3) For the UK to transition helps put pressure on oil exporters to look at other alternatives - eg exporting electricity instead.
4) Electric road vehicles have same effect, so another reason to embrace these as well.
5) What are the costs of transitioning our railways to all electric, I wonder? Again would reduce our imports of oil still further.
Well a few thoughts for you. be interested in your answers. Ian
Thanks for the comment!
1. Agree with the sentiment - but I think rooftop solar is economically 'over rewarded' at present - in that for every kwh of grid electricity you avoid, you can dodge not only wholesale costs, but levies, capacity market costs and some network costs that instead got borne by others. Solar still has value in terms of avoided gas (and carbon) costs, but I want broad based cheap electricity for everyone - to ensure we don't encourage too much defection from the grid. I wrote a little on the topic here - https://britishprogress.substack.com/p/post-haste-lets-care-for-our-electrical
I am very very impressed with the way solar technology and costs have developed. Will be of massive global significance, especially in countries that have lots of electricity use in summer (e.g. those that need lots of air conditioning)
2. Thats fair - the North Sea has declined a lot already, so reducing imports of fossil fuels should help our economic resilience. There is a balance here though - in that most of our fossil fuels use goes into powering cars and heating homes - which can be electrified to reduce imports very considerably (heat pumps/ev's much more efficient than gas boilers and combustion engines) - so I'm prepared to tolerate gas remaining on the electricity system for longer then consensus of it helps reduce electricity costs and speeds up electrification.
3. Perhaps - I'm nervous about too much interconnector reliance for national security reasons. But agreed that of fossil fuel demand drops, exporters might look at different business models which would be positive.
4. Agreed on EV's!
5. Very much agreed on electrifying the railways too!
But are there optimum prices for electricity - ones that won't discourage electrification of railways and much else, but not be too low to discourage the transition to renewables? We need to do both. Ian
Thanks for all that - more to think about. Ian
Ed … from my perspective it’s been a year well spent.
Excellent article, useful insights and some refreshingly pragmatic suggestions (that’s a compliment by the way from a jaded engineer who has read far too many ‘thoughts’ on energy policy from policy wonks) for how to move forward.
Good luck with the new gig.
Thanks very much! And hope all is well with you!
Nice article Ed, broadly agree, have a few thoughts
1. As you say at the end, many of the pathologies making our nuclear so expensive apply to other infrastructure including transmission. A world in which we sort out nuclear costs is maybe also a world where we can justify more wind north of the major constraints
2. I personally don’t see that north sea licenses matter much either way - they currently contribute 4% of corporate tax which is itself 8% of total tax revenue, and reserves do not seem to me big enough to meaningfully impact prices. I’d grant licenses largely because it’s good politics domestically. But the main opposing argument is that it would hurt our diplomatic credibility when pushing for other countries to decarbonise. This is definitely a point up for debate, but I think needs engaging with
3. I don’t understand why we’re not more focused on onshore wind. It is already reasonably priced despite atrophied supply chains and continuing restrictions on things like turbine height. We can surely knock the price down further - and this would seem to be an obvious way to bring down bills
Hi Matt - thanks very much
1. Agreed - we have built both nuclear and transmission much more cost effectively in the past and need to get back to doing so! Also quite interested if we can get dynamic line rating working so we can increase transmission capacity when it is windiest.
2. Agreed its not the biggest tax - but every little helps and I like its countercyclical properties (income when we are under pressure from a fossil fuel spike. No strong view on reserves - just note that the oil and gas industry has been incredibly innovative in the last decade and technology might allow us to get at more than expected. I want to continue production for as long as we need it - and I'm worried that prematurely losing volumes will mean infrastructure closes early etc.. Your point on diplomatic credibility may well be right - I just don't have any faith that anyone is following the UK for energy policy pointers at this point, so it's not something I weight very heavily.
3. Good point - I have impressed and surprised at the divergence that has opened up between offshore and onshore wind. Will be interesting what the economics look like for repowering projects where some of the infrastructure is already in place. I suspect it gets relatively little attention at the moment due to boundary constraints - but if its cheap enough and transmission costs can be reduced then there should be scope for more of it.
As a country we've become incapable of building any major infrastructure either cost effectively or on time. A lot balme is laid at the door of govt and bureaucracy but thats not all of it. We are paranoid of our shadows these days and completely risk adverse is also a contributor.
We should be extracting every last molecule from the N.Sea where ist cost effective thats energy security which should the priority not cost.
Nobody wants onshore wind anymore so you can forget it unless its imposed. Repowering is a good option but means removing turbines as they need to be taller and grid connection capacity means no additional generation
Matt, thanks for these thoughts. Which countries are we trying to convince and to what competitive advantage for the UK? A weaker poor country has less power, and diminishing North Sea revenues contributes to less diplomatic influence too. Reserves also depend on investment, there may be many more barrels. We can use those reserves, especially gas for 95% clean power with CCS - at lower cost than AR7 wind CFD prices.
Matt,
your views do not stand scrutiny.
Wind and solar are unsuited for grid supply, intermittent and meet none of the essential technical requirements. They only exist with the support of conventional generators, which we run in parallel, i.e two types doing one job.
There is no scientific reason for decarbonise, despite the wide spread belief. Science is not an authority, but a search for answers and there is not one iota of proof that CO2 is driving our climate.