How will the UK keep the lights on this winter?

Today will see a policy speech by the Prime Minister on the subject of wind power and the offshore version in particular. Compared to our nuclear plans it seems extraordinarily cheap to say the least.

Every home in the UK will be powered by electricity from offshore wind farms within a decade, Boris Johnson will say in his conference speech on Tuesday morning.

Promising to “build back greener”, the prime minister will pledge £160m to upgrade ports and factories for building turbines.

The plan aims to create 2,000 jobs in construction and support 60,000 more. ( BBC News)

These sort of statements are revealing for what they do not say. For example “Every home” sounds all encompassing but what about industry? Also we are turning out eyes away from days when the wind does not blow.  Then we note the £160 million is just to have the ability to build the wind turbines. Finally we see that these jobs have an extraordinary multiplier of 30! Or Alice has gone through the Looking Glass yet again.

Actually the going through the Looking Glass theme continues.

He will say the UK is to become “the world leader in clean wind energy”.

“Your kettle, your washing machine, your cooker, your heating, your plug-in electric vehicle – the whole lot of them will get their juice cleanly and without guilt from the breezes that blow around these islands,” he will say.

We get some more details here.

The scheme will see the money invested into manufacturing in Teesside and Humber in northern England, as well as sites in Scotland and Wales.

Mr Johnson said the government was raising its target for offshore wind power capacity by 2030 from 30 gigawatts to 40 gigawatts.

The rhetoric becomes ever more extraordinary.

“Far out in the deepest waters we will harvest the gusts, and by upgrading infrastructure in places like Teesside and Humber and Scotland and Wales, we will increase an offshore wind capacity that is already the biggest in the world.”

The PM will also repeat his pledge for the UK to become the “Saudi Arabia of wind power”, adding: “As Saudi Arabia is to oil, the UK is to wind – a place of almost limitless resource, but in the case of wind without the carbon emissions and without the damage to the environment.”

Where are we now?

According to UK_WindEnergy this is the state of play as I type this.

GB Grid: #Wind is generating 4.50GW (13.53%) out of 33.26GW

In itself that is an achievement as there was a time we would not have believed it to be possible. There are times over the next day or so when it is expected to be much better.

Today’s forecasted metered #Wind peak is 10,180MW between 23:00 and 24:00 GMT Tomorrow’s is 12,105MW between 10:00 and 11:00 GMT

We get several perspectives from this. The first is that in theory some 40 GW of wind power would cover current UK electrical power needs. But as we move to practice we have the issue when we have less wind as we have as I type this or even worse a still day.

Also the numbers are even on the best days quite a bit below the maximum. As we stand according to RenewablesUK the maximum operational capacity is 24 GW yet we at best struggle to actually get much above half of that. They do a calculation to try to allow for that.

The load factor is the actual output of a turbine benchmarked against its theoretical maximum output in a year. The load factor is calculated by RenewableUK as a rolling average of the past five years.

What is it?

  • onshore wind: 26.62%
  • offshore wind: 38.86%
  • BEIS “all wind”: (onshore + offshore): 31.14%

As you can see for wind power in total we get about 31% of the maximum on average. Intriguingly the new plans suggest we will do much better?

BEIS also states that the load factor for new build offshore wind (2023/24/25) is 58.4%

Have we built the existing ones ( providing 38%) in the wrong place or has there been some new advance?

A Confession

Although they would not put it like this The Guardian has published a tacit admittal of my points today. Take a look at this by the author Chris Goodall.

We should go much further because we’ll need to generate far more electricity to meet demand from electric cars and from heat pumps for heating homes. If we increase generation by about 20 times from today’s levels, it will give us sufficient electricity almost all the time, significantly reducing the problems arising from the unpredictability and intermittency of most renewable sources.

There are two refreshing elements of honesty here. The first is the acknowledgement of the unreliability of renewable energy sources and the second is that we are going to need a much higher level of electricity generation in future. I am reminded of the electric car issue regularly as there are nine charging points around Battersea Park and for now there is plenty of excess capacity there. But we see that more electric cars are being purchased.

Demand for battery electric vehicles (BEVs) increased by 184.3% compared with September last year, with the month accounting for a third of all 2020’s BEV registrations. ( SMMT)

The requirements for such a plan are really rather extraordinary though.

Is such as massive expansion actually possible? I have calculated that the UK would achieve this target by devoting about 5% of its maritime zone to offshore wind, 2% of the land area to solar panels and about 12% to onshore wind.

Storage

There is a plan for that too.

Under the scenario described above, we will have far too much electricity almost all the time. Batteries can cope with some of this surplus but most of the power should be converted to hydrogen. Today, hydrogen is created from fossil fuels but it can be easily made from water using electrolysis. The gas can be stored to make electricity on the rare occasions when the available renewable power is insufficient. Hydrogen is hugely versatile; it can also be deployed to power vehicles, to provide the energy for steel-making and other industrial processes, and to act as the critical raw material for the chemicals industry.

With battery technology as it is I am struggling not to laugh at the mention of it. But let me hand you over to How Stuff Works on Hydrogen.

It’s expensive to pull hydrogen from water………..here are other problems as well: Scientists are still struggling with the challenge of how to store hydrogen. Because it has such a low energy density, hydrogen needs to be stored and transported under high pressure — which makes it bulky and impractical. The pressure issue compounds another issue with hydrogen energy; like gasoline, hydrogen is highly flammable, but unlike gas, it has no smell.

The latter was highlighted many years ago by the Hindenburg disaster.

Comment

There have been considerable achievements here over time. I have just checked on the UK government website and as of the end of August we have some 13.5 GW of solar capacity as well. In theory we are covered but of course practice is very different to that.

GB Grid: #Solar is generating 2.26GW (6.56%) out of 34.43GW ( @UK_SolarEnergy )

The solar problem is that it works for fewer hours and at weaker power at the time we most need it. On the upside it has been getting cheaper as according to the official figures the cost of small scale production fell by 12.3% between 2014 and 2018.

Added to the availability of supply when we need it is the cost issue. The price falls for solar are especially welcome as we have seen electricity prices rise by so much. Although price and cost issues get hidden behind a barrage of rhetoric like this from Chris Goodhall.

Author Chris Goodall says tackling the climate crisis is neither difficult nor expensive and can help boost the economy……..

It is hard not to laugh at the idea that his plan is ” relatively cheap “. Also later we get this.

Many other countries, such as the US, have publicly controlled energy companies that can act to meet local needs and minimise the cost of gas and electricity.

I am not sure that is going so well and given the quality of local government in the UK I fear the worst from this.

 The UK should follow the example of Germany and offer the chance to local governments to run all the utility networks in their areas.

After all isn’t the German system a bit of a mess?

Returning to my title here is Ofgem on the subject which for some reason they seem to be rather out of date on.

Electricity capacity margins (the average amount of extra electricity available compared to peak winter demand) are tightening in Britain. This is because older and less profitable power stations are closing. However, if needed, National Grid can use extra tools to balance the system in winter 2016/17.

Are those the same “extra tools” available to the Bank of England?

Here is Imperial College on last year.

When output from wind power fell sharply on cold, calm days the stress to the system increased and in one incident created a higher chance of blackouts, with just 0.2GW of spare capacity available, compared to over 4GW the following day.

Also some had to reduce usage.

An evening peak in demand was also managed with factories and supermarkets reducing their electricity usage, helping to maintain normal day-ahead power prices.

The balancing ability we have is pretty much supplied by gas with biomass also helping to some extent.

 

 

Of Bitcoin banks and electricity consumption

This morning opens with yet more Bitcoin headlines and news. I guess it is in keeping with the times that what was so recently a raging bull market should apparently so quickly become a bear one. From Reuters.

 

Bitcoin traded at $10,968, down 3.7 percent in Asia, after a fall of 16.3 percent on Tuesday, its biggest daily decline in four months.

Just over 24 hours ago it was above US $13,000 and of course in mid-December we saw a peak of over US $19,000.  It is also important to provide some perspective as if we look back a year we see that it was below US $900. Or to put it another way over a year we have quite a bull market and over a month a bear one.

Another way of putting it is shown below.

I think the mean needs to be higher but otherwise we get an attempt to explain human investing psychology with both its flaws and glory. One facet of this which I found particularly troubling came from CNBC just over a month ago.

Bitcoin is in the “mania” phase, with some people even borrowing money to get in on the action, securities regulator Joseph Borg told CNBC on Monday.

“We’ve seen mortgages being taken out to buy bitcoin. … People do credit cards, equity lines,” said Borg, president of the North American Securities Administrators Association, a voluntary organization devoted to investor protection. Borg is also director of the Alabama Securities Commission.

If only Borg had said “resistance is futile”! But he was on the ball in two big respects in that he was warning of a problem should people borrow into a surge and also later he pointed out that “innovation always out runs regulation”. It is hard not to note that the peak we have seen so far came quite quickly.

The banks and Bitcoin

However the apparently Bitcoin friendly behaviour of the banks did not last. From the Financial Times on Saturday.

Bitcoin investors trying to channel their new fortunes into UK property are being turned away by mortgage lenders and brokers who fear breaching anti money-laundering regulations.

There was a more specific example.

One public sector worker built up a deposit of £40,000 after investing in bitcoin, said Mark Stallard, a broker and principal at House and Holiday Home Mortgages. But he said he had been unable to arrange a loan because it was hard to prove where the funds had arrived from and to link them to his client.

 

“The first mortgage lender I rang asked me what a cryptocurrency was,” Mr Stallard said.

 

“I rang two other lenders and they said they would not touch it. “When I mentioned where the money had come from there was massive reluctance to help or understand the problem. I do not believe the mortgage providers in general are ready for this issue and research tells me that a lot more people will be knocking on our doors with funds made or raised in this fashion.”

There are various issues here as for example the client could say he has made the money by gambling/investing. Of course the latter issue of investing raises the issue of whether capital gains tax is due? So perhaps that is why there is a claimed issue with where the funds arrived from. Mind you the Building Societies Association have a cheek to say the least to say this.

“There is currently no regulation of these electronic currencies, which puts them into the highest risk category in relation to money laundering. In addition, it is well known that such currencies are popular with criminals, who use them to launder the proceeds of crime.”

Apparently you can however pay off your mortgage with Bitcoin profits.

Existing borrowers who want to use their bitcoin profits to pay down mortgage debts are free to do so. Daniel Hegarty, founder of online mortgage broker Habito, said a customer recently cancelled his remortgage application before it was completed, deciding instead to pay off his whole mortgage with his money from bitcoin investments.

So there is quite an inconsistency there as I again have a wry smile at the banking sector accusing others of facilitating money laundering and being popular with criminals!

Anonymity

This is an odd one with the cryptocurrencies.I am sure many of you know more about this than me but there is a clear contradiction in what we are told. Firstly we are regularly told that the trading is anonymous and that is one of the points of the system. Fair enough. But we are also beginning to be told that financial crimes can be spotted so we simultaneously do not know what is happening but we also do?!

Electricity and power

We are getting ever more stories about the energy consumption of Bitcoin as this tweet from John Quiggin suggests.

If mining ended tomorrow, China could reduce its coal consumption by an amount comparable to its entire import of Australian thermal coal (supporting calcs to follow)

Sadly he has not yet provided the mathematics behind this but there have been plenty of other suggestions in the same vein. For example from Bloomberg last week.

Miners of bitcoin and other cryptocurrencies could require up to 140 terawatt-hours of electricity in 2018, about 0.6 percent of the global total, Morgan Stanley analysts led by Nicholas Ashworth wrote in a note Wednesday. That’s more than expected power demand from electric vehicles in 2025.

There are plenty of arguments about the numbers but suddenly hydro-electric power seems to be en vogue as this from Bloomberg yesterday suggests.

A Canadian utility has already voiced enthusiasm. Hydro-Quebec has said it’s in “very advanced” talks with miners about relocating to the province and that it envisions the miners soaking up about five terawatt-hours of power annually — equivalent to about 300,000 Quebec homes — from the surplus created by the region’s hydroelectric dams.

If we move onto future power demands of which Bitcoin and the other cryptocurrencies may turn out to be significant I have a question. Are we not going to run out of electricity? My own country has been something of a shambles in providing new power generation as the ultra expensive plans for  a new nuclear point at Hinkley Point demonstrate and yet we are told this. From the BBC today.

Three-fifths of new cars must be electric by 2030 to meet greenhouse gas targets, ministers have been warned.

There have been some movements on infrastructure as for example there are now nine charging points around Battersea Power albeit they seem to be rarely actually used. But in a future where they are used a lot and that is not so inconceivable where is the electricity going to come from? It is not that there has been complete failure as for example I have just checked and wind power is currently providing over 10 GW but of course it relies on the wind blowing. It is helping in this cold snap but what if people wanted to charge their vehicles on a cold windless night? Perhaps that is when Smart Meters will really come into their own and not in a good way.

Comment

There is a lot to consider here as we mull two concepts that would have been regarded as separate only a short time ago which are Bitcoin and electricity. Here is another way of looking at it from Chris Skinner.

Part of the problem is, that all those Bitcoin miners are racing to solve the same problem, but only the miner who solves the problem first gets to actually claim the block. All the other miners lose out, and their energy goes to waste. Even with that probability, with 1 Bitcoin at roughly US$20,000, there’s plenty of incentive to try.

There is still a fair bit at US $11000. But unfortunately trying it at home will not work.

Even so, a fairly typical computer with an average type of SHA isn’t going to cut it — a recent estimate was that to mine a single Bitcoin using an average computer would take you around 1,367 years

So you would need something like Carl Sagan’s SETI project. However one way of looking at the message from Alex Hern below would be to think is Hinkley Point a way of nobbling Bitcoin?

The power consumption of bitcoin mining is purely artificial, and its equilibrium is essentially at the level where the cost of all the electricity used is equal in the long run to the value of the bitcoin granted in mining rewards.

The energy problem is simply that renewable sources of electricity are sometimes outside our control whereas things we are shutting down such as coal generation we can control. Yet the potential demands for electricity are rising with no clear plan to provide for them unless of course cold fusion finally works or we find a way of being able to store power efficiently.

 

The economics of energy

There was something that barely got a mention in the UK Budget on Wednesday and yet is a big deal in people’s lives and is perhaps the number one factor in any economy. Let me present it from a different perspective given by a BBC Four documentary which I watched. It pointed out that civilisations if they were to survive and thrive need to harvest enough energy from their local star or stars not only to live but to allow them to travel. If nothing else they need to get to the next star for a type of refuelling. Otherwise such a civilisation can rise but also will fall when its local star eventually fades. It or they may have existed but there would be no chance of ET coming visiting unless such a breakout is managed. In times to come that will apply to us as well which provides food for thought when our own space travel technology often involves lighting the blue touch-paper and sending a firework forth. Not quite to boldly go and all that is it?

It is easy to forget the wonder of nature and the way that a combination of chlorophyll and photosynthesis gives us the energy to exist and live although of course we normally think of it as food. That process has also provided us with what we more conventionally consider energy as our various sources such as wood, peat, crude oil and natural gas come from that. I sometimes wonder if future generations will curse us for our use of oil for energy when it can be used for so many other useful purposes. Though of course there is an irony in that we have got into quite a literal mess with the over use of plastic. Indeed it is rather symbolic that those who are supposed to be leading the green charge do this. From the Guardian.

More than 2.5m disposable cups have been purchased by the UK’s environment department for use in its restaurants and cafes over the past five years – equivalent to nearly 1,400 a day………..the House of Commons itself is also failing to get to grips with disposable cup waste, using almost 4m disposable cups in the past five years.

Much of this is based around the element carbon to which we also need to doff our caps as I recall the Star Trek episode where the alien robot described us as “carbon based units”.

Of course we have other sources of power one which is very old ( the wind) and two which are much newer which are solar or photo-voltaic and nuclear. These all have a flexibility problem though which is the first two rely on the weather and in the latter case daylight and the last one you turn on for say 6 months and let it run. So nuclear is for what is called your base load ( minimum power requirement) and the other two need some storage. Whilst there have been some improvements such as the large battery built by Elon Musk  anyone with a laptop or smart phone will know the problem. I am no great Apple expert but I understand the latest I-Phone has had particular problems in this area. So let us wish Elon well with this. From Mashable UK.

Tesla has completed installing its colossal lithium ion battery in South Australia, a Powerpack system with 100 megawatts of capacity. But now comes the test. Regulatory testing will begin in the next few days to ensure the battery is optimised and meets AEMO and South Australian Government requirements, before operation commences on Dec. 1.

South Australia had seen blackouts due to its reliance on renewables.

Hinkley Point

This links in with this weeks news because going forwards it looks set to have a large influence on not only individual and company budgets in the UK but also economics. The former comes from this.

 the UK government has guaranteed EDF a fixed price for the electricity it produces for 35 years.That fixed price, or strike price, is £92.50 per megawatt-hour………The strike price of £92.50 is in 2012 pounds, so will be considerably higher by 2025. Already, if you adjusted for CPI inflation, the figure would be about £97.

Phew, At least it is not RPI! This compares to a price of more like £44 in July. Even at the peak of last winter when if I recall correctly there was a shortage at one point it only just nudged over £67. So all electricity consumers will be dipping into their wallets and purses to pay for this and if it is repeated energy is on its way to getting a lot more expensive yet there is only flickers of debate. Imagine if a tax was raised for this! In a way it is but it is a hidden stealth one.

In terms of wider economics there is the issue of importing technology and the impact on the balance of payments. Even worse somehow we have involved the Chinese as well. As the problems mount there is also the issue that the technology involved has hit problems elsewhere. Just google Flamanville if you want to know more.

Wind power

This has seen successes. From the UK government about the second quarter of this year.

Onshore wind generation increased by 50 per cent (2.0 TWh), the highest increase across the technologies, to 6.0 TWh, while offshore wind rose by 22 per cent (0.7 TWh), to 4.0 TWh.

However there are cost issues too with offshore wind. From the Guardian on Wednesday.

Innogy recently secured a subsidy of £74.75 per megawatt hour of power to build a windfarm off the Lincolnshire coast, which is £17.75 cheaper than Hinkley and should be completed about three years earlier.

It may be a cunning plan to compare your product with something which is outrageously expensive but offshore wind remains reliant on subsidy and is very expensive too.

Solar

Wags will no doubt claim that the often cloudy UK is unsuitable for solar power but in fact we do have some and of course this is an area which has seen large advances in technology.

Generation from solar photovoltaics increased by 3.4 per cent (0.1 TWh) to a record 4.0 TWh
compared to 2016 Q2, due to increased capacity.

It is not so easy to find a wholesale price for the electricity but according to the US EIA this has happened in the last 7 years.

solar photovoltaic (down 81%),

Biomass

I have to confess this surprised me as I looked at the data from the UK government.

In 2017 Q2, generation from bioenergy1
, at 7.7 TWh, was down slightly (0.5 per cent) on a year
earlier. Within this, generation from biodegradable waste was up 30 per cent (0.2 TWh), due to
increased capacity; however, this was offset by reduced generation from landfill gas and plant
biomass.
Bioenergy had the largest share of generation (34 per cent)

Comment

There is much to consider here in a world of stealth taxation. But let me use this from Joel Hills of ITV.

Centrica boss says 20% of energy bills now “government policy costs”. He wants these transferred to general taxation as unfair on the poor.

Next whilst there has been leaps and bounds in technology both wind and solar need some form of back-up which requires us to have something on standby which in the UK’s case is mostly gas. Thus their economics needs to allow for that which it rarely does. Meanwhile there is the shambles which is nuclear in the UK. After all we do make reactors for the Royal Navy which are no doubt very different to domestic power but I cannot escape the feeling that we could have done it.

Next though is one of perhaps the most bizarre features of our time which is the ( so far) boom,boom,boom of Bitcoin. From Power Compare.

Bitcoin’s ongoing meteoric price rise has received the bulk of recent press attention with a lot of discussion around whether or not it’s a bubble waiting to burst.

However, most the coverage has missed out one of the more interesting and unintended consequences of this price increase. That is the surge in global electricity consumption used to “mine” more Bitcoins.

According to Digiconomist’s Bitcoin Energy Consumption Index, as of Monday November 20th, 2017 Bitcoin’s current estimated annual electricity consumption stands at 29.05TWh.

That’s the equivalent of 0.13% of total global electricity consumption. While that may not sound like a lot, it means Bitcoin mining is now using more electricity than 159 individual countries (as you can see from the map above). More than Ireland or Nigeria.

If Bitcoin miners were a country they’d rank 61st in the world in terms of electricity consumption.

Here are a few other interesting facts about Bitcoin mining and electricity consumption:

  • In the past month alone, Bitcoin mining electricity consumption is estimated to have increased by 29.98%
  • If it keeps increasing at this rate, Bitcoin mining will consume all the world’s electricity by February 2020.
  • Estimated annualised global mining revenues: $7.2 billion USD (£5.4 billion)
  • Estimated global mining costs: $1.5 billion USD (£1.1 billion)
  • Number of Americans who could be powered by bitcoin mining: 2.4 million (more than the population of Houston)
  • Number of Britons who could be powered by bitcoin mining: 6.1 million (more than the population of Birmingham, Leeds, Sheffield, Manchester, Bradford, Liverpool, Bristol, Croydon, Coventry, Leicester & Nottingham combined) Or Scotland, Wales or Northern Ireland.
  • Bitcoin Mining consumes more electricity than 12 US states (Alaska, Hawaii, Idaho, Maine, Montana, New Hampshire, New Mexico, North Dakota, Rhode Island, South Dakota, Vermont and Wyoming)

Time for Snap

I’ve got the power
I’ve got the power
It’s gettin’ it’s gettin’ it’s gettin’ kinda hectic
It’s gettin’ it’s gettin’ it’s gettin’ kinda hectic
It’s gettin’ it’s gettin’ it’s gettin’ kinda hectic
It’s gettin’ it’s gettin’ it’s gettin’ kinda hectic