In the documents issued by the Department of Energy and Climate Change (DECC) late last year was buried a bombshell for energy management. While the news media moved from the Leveson Inquiry findings for just long enough to mash up the Energy Bill announcement, two reports on energy security from Ofgem went completely unnoticed.
At last year’s CIBSE Annual lecture, Ofgem’s Alistair Buchanan gave a chilling account of the developing energy landscape for Britain. First, the rate of power plant retirements is accelerating as old, high emissions plant reach the end of their environmental derogation and the Large Combustion Plant and Industrial Emissions Directives regulations kick in.
While this cliff edge has been known for some time it would appear that investors have thought it more profitable to sit on their hands (or more to the point their money). The Energy Bill puts in place a clearer market specifically for power capacity that should patch the problem but will take time to come into force. It also takes time for new large plant to come on stream. So we are on our own for the next few years.
The capacity margin as projected by National Grid could get down to a few per cent of peak load. Things get noticeably worse if, for example, a severe winter cold spell means that there is no spare capacity available on interconnectors to mainland Europe. ‘Brownouts’ here we come?
Downward slope
This would not be news to energy managers elsewhere in the world, where working round power cuts is a way of life. Of late this has appeared in developed countries as well. Old timers would have told you that life was much like that here in the 1960s and 1970s when they had had to work around OPEC production caps on oil and NUM action on coal production and the odd three day week.
But Natural Gas did away with all that. It did not need a large labour force working under extreme conditions to keep it flowing, and it was clean and ours. Not just the thing to heat water, but run highly efficient power plant. Unfortunately, as the second report on gas security shows, that story has come to an end.
Gas fields exhaust rapidly. We are on the steep downward slope of ours. When economic experts decry our lacklustre performance as an economy they would do well to remember that with declining domestic reserves we are running to stand still. The gap is filled by imports, at first from Norway.
The Norwegians are not minded to exhaust their fields all in one go. So an increasing proportion of gas has to come from somewhere else as Liquefied Natural Gas (LNG). A large global LNG market has developed and the UK has one of the most active ‘virtual’ hubs. Markets do what they do very well but that is not always what you want to happen. There could be spare gas at sea to buy in a UK emergency. The Norwegian gas fields often operate in extreme conditions and do get interrupted. But if the LNG shortage is of wider extent then it is the highest bidder that will get what is around.
Energy markets
And it’s not just our boilers that run off gas; it’s the power system as well.
Because we have had our own natural gas our gas storage facilities are proportionately less than many countries in mainland Europe. Increasing that capacity takes time. If the gas transmission system has to shave off gas the models assume for safety reasons that this will happen in power generation. But if the capacity margin is small that will mean ‘brownouts’. Without pumps and control gear there is not all that much point having gas! We seem to be sleepwalking into disaster.
What are new this time are energy markets. After all, the usual energy tariff absorbs the real market price movements by averaging over a quarter. But, given the kind of spikey prices that might be around in a tight situation, maybe building managers would like sight of the cherry to offer credible load shedding if suitably rewarded.
Many Building Management Systems were not installed for this kind of operation. They monitor for exceptions, schedule start up and manage evacuation emergencies. Indeed it is usually hard for more capability to survive value engineering.
Shedding load without inconvenience usually requires more micro-interventions. Switching to standby power is an option as long as it is not gas – in which case the gas engine will take more gas than was switched off at the closed CCGT!
We could slide through the next few tight years on ‘brownouts’ and blackouts until the Energy Bill measures kick in. But there could be a better, smarter way that exploits all our investment in smart metering and smart grids. If it’s a better way, shouldn’t we take it?