Reading beyond the nuclear headlines
11 September 2017
With an overwhelming abundance of news clogging our Twitter timelines, Facebook feeds and news apps, it can sometimes be difficult to get beyond a headline.
If you read something that chimes with your own intuitions, it can be nice to breeze past it, knowing you can later back up your own opinions quoting a headline and source.
Today’s welcome news about the falling costs of offshore wind, as expressed in auction results run for new capacity, is a prime example.
If offshore wind can be developed at £75 and £58/MWh, and reading the headlines about how offshore wind is now cheaper than gas and nuclear, you could easily mould your argument and say we should build hundreds more offshore wind turbines, turn off the gas taps and tear up the UK’s nuclear new build plans.
But, if you care to delve a little further into the subject then it becomes clear that one technology can’t deliver the UK’s future energy needs alone.
With two thirds of the UK’s centrally available capacity due to retire by 2030, including all but one of the current nuclear fleet, the UK will need the full range of low carbon technologies to replace ageing infrastructure and provide the reliable, secure supply of power we need.
As the National Grid’s latest Future Energy Scenario’s report highlights, the grid needs nuclear. Its findings show “new nuclear build is required in all scenarios” because of its ability to generate the always on, low carbon electricity, which intermittent renewables simply cannot provide.
The government’s latest Digest of UK Energy Statistics show in 2016 that offshore wind generated electricity for 36% of the time compared to nuclear energy’s load factor of 77%. You can predict the weather but you cannot dictate when the wind blows and the sun shines.
This is why you need a balance of low carbon sources to meet demand, especially demand which is set to increase. National Grid estimates demand for electricity could as high as 85GW in 2050 compared to 60GW today, because of millions more electric vehicles and less carbon intensive heating. The distinction between energy and electricity is diminishing, and even with new technology, efficiency and storage we will need more power rather than less.
The cost of energy is rightly an important consumer issue and much press focus has targeted Hinkley Point C’s strike price of £92.50/MWh, but if you compare it to the £140/MWh agreed for the Hornsea offshore wind project at a similar time, both delivering in the next decade, then it presents a very different picture to the simplistic approach of some. Indeed, even when you include today’s auction results the average cost of offshore contracts, if they are all built, is more than £115/MWh. Even those costs are not comparing like with like, and why we should be wary of judging a complex picture with simplistic slogans.
But industry can’t be complacent and it is working to reduce its costs, and the National Audit Office recently highlighted in its own analysis that using different financing structures could result in lower strike prices for future projects. Given the impact the cost of capital has on large infrastructure projects we hope government is listening to the advice outlined by the NAO.
The pointless technology v technology debate we’ve heard from some today that pits nuclear against renewables risks the UK’s low carbon future. Without nuclear you will need back up, baseload gas or coal, and without renewables the same is true.
All low carbon power sources will be necessary if we are to meet our carbon targets and the focus should be on the reality of how we do that. Catchy headlines, wishful thinking and wilful ignorance won’t tackle climate change.