Thursday, 17 March 2016

The Electricity Trilemma

From a recent City AM:

Margaret Thatcher’s former energy secretary [Lord Howell] said that with coal stations being phased out by 2025 and nuclear coming online “10 years beyond that”, the UK faces a huge energy gap.

“Wind can come on when the wind is blowing, and we can get up to quite a high percentage of green electricity, but there’s still a big gap.”

He also slammed successive governments’ attempts to address the country’s energy “trilemma” – reconciling affordability, supply security and decarbonisation – dubbing policy on this front a “failure”.

“We’ve got some of the most expensive energy in Europe, even more expensive than Germany. That hurts people, particularly the poorest, and hurts industry and undermines our steel industry. We’ve got the most unreliable system.”

Fair enough, that is the trilemma, those are your three constraints (reliability - cost - "greenness/sustainability"), to which different people attach different importance*.

Minitrue resolves the trilemma by sticking its fingers in its ears and whistling:

A DECC spokesperson told City A.M.: “Our priority is crystal clear – to ensure our families and businesses have access to the secure, affordable and clean energy supplies they can rely on now and in the future.”

* My view is:

1. Security is paramount - which probably means slight overcapacity; which in turn means slightly higher costs and probably prices to consumers. Electricity is so fundamental to so many things, society grinds to a halt without it, but in terms of input costs it is only a tiny percentage unless you are an aluminium smelter or steel forge (which raises the question, why don't they build their own power stations and tell the government/generators to go hang?).

2. Cost - of course, for a given capacity, we should use whatever generation method is cheapest in pence per kWh. Whether that is solar, wind, nuclear, gas, coal or hydro is a separate topic. We have to ascribe monetary values to pollution and potential loss of output and factor them in, this is important albeit difficult/subjective.

3. Greenness/sustainability - is a subset of "cost" IMHO. We could have 100% solar/wind/hydro by tomorrow if we wanted, All we would have to do is shut down everything else, but then you have the add back the cost of economic collapse/sky rocketing electricity prices.


Graeme said...

it's the alleged externalities that matter however....obviously nuclear should be in the mix. However, the way we are heading...wind/solar supported by diesel lorry engines on farms suplying the gap between demand and supply is obviously the worst of all worlds.

As a first thought, abandon wind and solar and let controllable power sources handle demand.

James Higham said...

Mix of all types, you think?

Mark Wadsworth said...

G, JH, I don't know, that's not what the post is about.

It is about accepting that the three requirements (reliability - cost - greenness) are opposing factors and you have to prioritise one or two of the three - you cannot prioritise all three of them at the same time as the morons at the DECC appear to believe.

Having set our priorities, we then decide the mix. For example, if A wants greenness regardless of cost or reliability, then the answer is wind and solar. If B wants reliability at reasonable cost, regardless of greenness, then the answer is coal. And so on.

Within their own terms of reference A and B have succeeded in choosing the right mix.

L fairfax said...

No form of power is 100% green. However nuclear IMHO is both green and reliable but not cheap.
If you want green and reliable nuclear is the answer.
(Let assume that we do).

Nick Drew said...

In practice, whatever the rhetoric the government (all govts?) priortises security. They then try to sneak in as much greenery as they think they can get away with.

De facto they pretty much ignore cost - and the greens are of course cheering on higher prices, when they dare - although when someone gets up in arms (industry / voter) they (a) do something headline-grabbing & usually silly; (b) rehearse the sophistry that runs "it would will be even higher in future if it wasn't for [whatever ridiculous green policy is being complained of]

For the most part they can comfortably ignore cost because, as MW indicates, the utility value of electricity is so high, and its substitutablity so low, you can charge a lot more han we pay now and still we'd buy it

(by way of illustration, prior to the introduction of competition in the late '80's, with the exception of free-market theorists, literally nobody - not even heavy industry - was complaining our gas & electricity cost much more than it needed to, due to the way the monopolies behaved. But it was true, very true. The introduction of competition was a purely doctrinaire political initiative, with no pressure for it from any part of public opinion or consumer lobbying.

Following this (and largely though not 100% because of it) real gas and electrcity prices fell significantly, across all sectors. No-one really noticed or cared, just as they hadn't cared before.)

Mark Wadsworth said...

LF, fair answer. What do you rank first - reliability or greenness?

ND, thanks, you're the expert, so it appears I'm on the right lines.

There are horror stories about so many coal fired being shut down that we are putting supply at risk. Is there anything to them or is it just scare mongering by the electricity producers?

Bayard said...

There are two reasons not to burn coal: one is that the resulting carbon dioxide in the atmosphere will make the earth so hot that there will be crocodiles in the Baltic and the second is that when we've burned it all, that's it, there won't be any more.
Whether the first is important to you depends on whether you believe that the CO2 levels in the atmosphere have any effect on the global climate. If you don't (and, AFAICS, it is a matter of belief no different from believing in God) then the first is a non-reason. As to the second, now that very little else apart from power stations and a few heritage railways use steam, there really isn't a lot you can do with coal so we might as well burn it while the boffins make nuclear fusion a practical reality.

Nick Drew said...

Govt will authorise, nay terrrorise, the Grid to do Whatever It Takes to keep the lights on in homes and hospitals - that's all we can say

they are really sailing close to the wind next winter - the coal closures are significant, as you suggest, and the expedients will be costly

Mark Wadsworth said...

B, two good points.

ND, ah, I really am a bit worried now.