Utility Week

UTILITY Week 15th July 2016

Utility Week - authoritative, impartial and essential reading for senior people within utilities, regulators and government

Issue link: https://fhpublishing.uberflip.com/i/703125

Contents of this Issue


Page 9 of 31

Policy & Regulation 10 | 15TH - 21ST JULY 2016 | UTILITY WEEK Analysis T he UK's dramatic vote to leave the EU has major implications for certain aspects of its energy policy. Brexit's success may be the death knell of the Hinkley Point C nuclear project. It may also have implications for the future of UK renewable energy and the generous subsi- dies that it attracts. However, it does not mean that vari- ous elements of Germany's controversial Energie wende – energy transition – should be ignored as the UK seeks to address its desperately low plant capacity margins. While the Energiewende policy has had many years of gestation, it was the Fukush- ima nuclear accident in 2011 that proved to be the catalyst. With more than half an eye on forming a coalition with the Green Party, Germany's chancellor, Angela Merkel, sud- denly decided that all German nuclear power plants should be closed by 2022; this gave the Energie wende new momentum. From the 1970s, the city of Freiburg in Baden-Württemberg had pioneered the roll- ing out of combined heat and power (CHP) plants as well as installing solar panels on many prominent city buildings. Recently, the Energiewende has taken off in Germany, with a major expansion in wind and solar output. For example, in the state of Saxony-Anhalt, there are 23,000 photo voltaic systems and around 2,700 wind turbines installed at 97 separate power plants. Last year, 48 per cent of Saxony-Anhalt's energy was generated from wind, solar or biomass plants. Central to the Energiewende's principles is the delivery of various long-term targets, with renewables due to account for 60 per cent of gross final energy consumption – and 80 per cent of gross electricity consumption – by 2050. These are highly ambitious targets and above the UK's long-term aspirations. Managing demand and promoting energy saving are key aspects of the Energiewende. Such priorities are becoming more appar- ent in the UK as National Grid controver- sially seeks to strike deals with the NHS, for example, to conserve power at times of peak demand. Minimising greenhouse gas emissions is also integral to the Energiewende, with far more emphasis being placed on wind and solar generation. For many years, German renewable com- panies have benefited from the payment of feed-in tariffs (FITs), which provide a guar- anteed per kWh price: only recently did the UK adopt FITs. Allied to this are the tortuous efforts to operate an effective market for carbon certifi- cates. In recent years, far too many free cer- tificates have been issued, thereby removing the incentive to cut carbon emissions. While a more efficient carbon mar- ket seems probable, the UK government has pledged to phase out all its coal-fired plants by 2025, although there remains some 'wriggle room' to defer this date. Despite their carbon emissions, gas-fired plants are in effect within the Energiewende. Their availability should assist grid stabilisa- tion, especially at times of low wind speeds, freezing temperatures and high electricity demand. For varying reasons, UK gas-fired invest- ment has stalled. To reinvigorate it will be challenging, especially if – as the Energie- wende policy implies – it has to be designed around wind and solar generation plants. Using the heat generated from thermal plants more productively is also central to the Energiewende, as Freiburg's focus on CHP indicates. In the UK, CHP genera- tion levels are low, despite the output from the SSE-owned 35MW Slough and the Eon- owned 44MW Lockerbie CHP plants. With the impending closure of many coal-fired and nuclear plants – and receding prospects for Hinkley Point C – a generation portfolio that eventually focuses on gas, wind, biomass, solar and CHP seems the most likely outcome. Aside from its new coal- fired plants, this would broadly replicate what is currently operational in Germany. However, it is electricity transmission that provides Energiewende with its most testing challenges. Power supplies in the south of Germany, notably in Bavaria, are very dependent upon nuclear output, at least until the planned closure date of 2022. However, most renew- able power will be generated in north Ger- many and from offshore wind plants in the Baltic Sea. Consequently, a vast amount of power will need to be continuously 'wheeled' south. Such a scenario presents formidable technical challenges, particularly during periods of high demand and varying output levels from generation plants. The costs of designing and building new networks, as well as modernising existing infrastructure, are immense. It explains, in part, why German electricity prices are soar- ing: they are way above the levels of those in France, where nuclear power dominates. Within the UK, National Grid is already facing major challenges in accommodating new renewables-generated output. Many renewables sites are remote, unlike nuclear plants whose output can be readily plugged into the existing transmission network. The likelihood is that National Grid will continue to face considerable technical challenges in updating its infrastructure, although the broad components of heavy north-to-south power transfers have been established for decades. And, as in Germany, any technical step- changes in being able to store substantial amounts of electricity over a decent time- frame will become increasingly valuable – it remains the industry's holy grail. It is rather ironic that, aer the historic Brexit vote, the UK's electricity network will need to adopt many of the principles of Germany's Energiewende. Nigel Hawkins, director, Nigel Hawkins Associates Lessons from Germany In the wake of the Brexit vote, the UK will need to reconsider its energy policy; adopting elements of Germany's controversial Energiewende could be part of the solution, says Nigel Hawkins. What is Energiewende? Energiewende is German for energy transition. On a broader scale, it is the transition by Germany to an energy portfolio dominated by renewable energy, energy efficiency and sustainable development. The final goal is the abolition of coal and other non-renewable energy sources.

Articles in this issue

Archives of this issue

view archives of Utility Week - UTILITY Week 15th July 2016