Lights Out in London (and the rest of the UK)

Milliband's power plans are unachievable.

It’s been a frenetic week in the (new) department of Energy Security and Net Zero, which seems to be far more focussed on the net zero part of its remit. Energy Secretary Ed Milliband ignored his advisers and banned the issuance of new oil and gas licenses. A day later it appeared he might not have - although the source was quoted saying “we will not issue new licences to explore new fields. We will also not revoke existing oil and gas licences and will manage existing fields for the entirety of their lifespan.” So new exploration is in fact banned, as reported. Routine obfuscation may have seduced the mainstream media and won power for Starmer and his Marxists. It’s no help to energy companies managing their investment plans.

Extracting oil and gas from under North Sea has always been technically challenging (read expensive). When there was huge demand nearby that made economic sense for the investments, risks and costs. Now that the UK oil and gas market is being reduced by Labour nomenklatura  decree, windfall taxes are becoming routine and expansion is forbidden few will want to do business there. Most of the majors are pulling out or have already gone. The ban  on new licenses will, of course, be the death of exploration in the North Sea, destroying many of the UK companies that specialise in it. It’s conceivable that those currently producing will end production early.

The  Secretary of State for Energy Security and Net Zero has made us more reliant on imported gas - which is a novel interpretation of “energy security.” It won’t do the government’s budget any good either. Last year the OBR was forecasting £10 billion annual income from the North Sea. It will be less than that now.

Unfortunately it gets worse.

The government has set itself a target of a zero CO₂ grid by 2030. Shamefully, but typically, none of the mainstream media questioned whether this is possible. It might be in the minds of Ed the Marxist and his coterie of policy wonks like Torsten Bell and Chris Stark – the latter now being in charge of the strategy’s “Mission Control”. Setting targets and establishing offices with cool names is easy. Engineering isn’t. Those who know about energy are less than convinced as (industry expert) Kathryn Porter reported in her Watt-Logic blog “There is widespread disbelief within the energy industry that Labour’s [energy] plan is achievable.” “Widespread disbelief” is a masterful understatement. One of the few industry players who dared to put their heads above the parapet was Mitsubishi Power’s CEO, who warned the target would require “huge sacrifices.” Strange that Labour didn’t mentioned that in their election campaign.

It’s worth reviewing the numbers to understand how dangerous the Labour policy is and to see how much pain we’re in for.

In 2022 (the latest available figures) the UK generated 324 terawatt hours (TWh) of electricity, of which 133 TWh came for coal, oil and (mostly) gas fired power stations. (A terawatt hour is one billion kilowatt hours) Delivering a zero carbon grid therefore means producing this 133 TWh in some zero CO₂ way – unless the plan is simply to reduce the UK’s electricity consumption by over 40%.

The nuclear option is the simplest. Generating an additional 133 TWh per year wou;ld take about five more Sizewell Cs. That would mean building one per year. Sizewell C itself is likely to take at least a decade to build and it hasn’t started yet. This option won’t work. There is an emerging idea for Small Modular Reactors (SMR). These are to be standardised and thus cheaper and quicker. None has yet been built and the programme has been beset with bureaucratic delays. Delivering the required electricity would need about 34 of them, and they take four years to build. They could well be a viable solution, but not by 2030.

Generating an additional 133 TWh from wind requires a near doubling of the current wind and solar infrastructure. In 2021-22 offshore wind generation increased by 10GWh and onshore wind by 6 GWh. Delivering the green generation therefore needs 10 year’s growth delivered in half that time. That engineering challenge is further complicated by the reality that last year no wind power developer was prepared to bid as the price offered was too low (at £44/MWh). There are qualified bidders for this year’s auction, but who know what the price will be? Labour seems to be keen on onshore wind, which is cheaper to build and operate but generally produces less power (wind over land is slower than over sea) and often have expensive planning challenges – NIMBYs don’t like windmills.

With wind and solar generating the power is only part of the problem; either storage is needed to bridge the gap between when the wind blows but there is no demand and when there is demand but no wind. (The current solution, firing up a gas fired  power station is not zero CO₂). The most extreme disparity between supply and demand is a 100 hour “dunkelflaute” when there is weak winter sun and still air. These are an almost monthly occurrence in a North European winter.

The UK’s electricity requirements for that 100 hours is around 3.7 TWh. Storing that much electricity in batteries is not cheap. At current prices that comes out at a cost of £1.5 trillion pounds, even if you could get the raw materials. For comparison the current global battery storage totals just 0.06 TWh; delivering Miliband’s plan would require the UK to install 70 times the entire world’s battery storage in just five years.

The other option for storing energy is pumped hydro. (When you have surplus electricity you pump water uphill. When you have a shortage you reverse the process, generating hydroelectricity). It’s straightforward, known technology and it works. In the UK we have a pumped storage facility at Dinorwig, which can store about 9 GWh. Covering the Dunkelflaute requirement would therefore need around 400 Dinorwigs. The cost would be around £1.8 trillion. Dinorwig took 10 years to build, in an abandoned slate quarry. Finding suitable locations, building the necessary dams, flooding the valleys, installing the machinery and connecting to the grid by 2030 is unlikely.

Of course, the emissions problem would go away of all existing fossil fuelled power stations had carbon capture and storage (CCS) fitted. Much touted by the green fanatics, CCS is far from straightforward. Currently no UK power station has CCS. Two new, CCS equipped gas power stations are under construction. Retrofitting CCS to all the UK’s fossil fuelled power stations in five years seems unlikely to be affordable or achievable.

The UK’s gas fires power stations emitted some 63 million tons of CO₂ in 2022. Could we plant trees to absorb that much? One hectare of new woodland will absorb 270 tons of CO₂ in 30 years. So absorbing 2022 emissions would require about 230,000 hectares of new forest. 2023 would require another 230,000 hectares, as would 2024 so on. That comes out at planting 1% of the UK to woodland every year.  What will that do to agriculture? Taking land out of food production simply drives up food price inflation. Ed Milliband seems not to care.

Such reforestation will not be cheap – using the government figure of £11,000 per hectare it comes out at an annual cost of £2.7 trillion. That’s more than the entire GDP of the UK, or the national debt. Doubling that every year will simply lead to a bond crisis far, far worse than anything that happened under Liz Truss.

The last alternative is known as direct air capture, removing CO₂ from the atmosphere. The problem here is that for all the hype, CO₂ is only 0.04% of the atmosphere. To remove one ton of CO₂  mechanically requires compressing and liquifying 2,500 tons of air and the costs of that are enormous. There are chemical methods, but the 0.04% makes them expensive and inefficient too. The current cost range is estimated at £70 to £500 per ton, although these are not proven technologies . At £300 per ton CO₂ the cost of dealing with the UK’s power generation emissions would be £20 billion a year, or 6p/kWh - a 25% increase on the capped domestic electricity price. However the technology doesn’t exist at scale, so it can’t help Milliband achieve his targets.

That’s it. There are no other options. We have elected a government whose energy policy is risible. The brazen lies about a net zero grid propagated by Milliband, Bell and their buddies are appalling. That they were unchallenged by the mainstream press and BBC is incredible. When did the UK press decide to model itself on the Soviet Union’s Pravda - reporting government statements as absolute truth despite the evidence.

The incoherent Labour energy policy can have but one effect – energy costs will rise. That will cause inflation (everything good or service that we buy has an energy component) which will lead to higher interest rates. Rising costs and high interest rates are not a sound basis for private sector growth, so there won’t be any. The tax take will therefore fall and the deficit will rise. That combination upsets the bond market, which did for Liz Truss and it will do for Sir Keir Starmer. He may last longer than 50 days, but he won’t last five years as his energy policy will destroy the economy.

The only political party opposed to the folly of net zero is Reform. Think on that when your electricity bills rise and the lights go out.

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