MorganEnergy

The EIA’s Annual Energy Outlook is due to be issued today. The report has been available in overview since March, but today’s release should see the complete document coming available. Highlights of the forecast are available on the EIA web site. The report is unlikely to be happy reading for the renewables lobby. It predicts that the percentage of electricity generated from renewables will fall from 18% in 2005 to only 15% in 2030. Production by nuclear generation is also forecast to fall, from 15% to 11%. Meanwhile production from natural gas is forecast to increase from 20% to 25%, and production from coal to increase from 41% to 46%. The remainder of the production is from liquid fuels. As Platts notes, the increase in coal production is mainly a result of the rapid increase in capacity in China.

Conservation groups in the UK have been delighted today by a report that they commissioned from Frontier Economics proving that a barrage across the Severn Estuary is one of the least economic ways of helping the UK meet its targets for renewable generation. The report is available online, so we took a look to see what numbers Frontier had come up with.
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National Grid has issued its annual winter consultation document for the UK’s gas and electricity markets. The document is available from the Ofgem web site. The outlook appears fairly bullish, although there is some concern as to when the new LNG terminals at Milford Haven (Dragon and South Hook) will begin commercial operation. The Ofgem press release quotes a reserve margin in generation of 26.8%. However, perusal of the document shows that this is based on the Seven Year Statement’s figure of 79.4 GW of contracted capacity, whereas National Grid’s operational viewpoint suggests available capacity of between 75.4 and 76.1 GW.

A theme running through the electricity sections of the report is the difficulty of predicting availability from wind generation. National Grid presents figures showing that the load factor of wind plants varies significantly through the year, but is rarely over 40%. Historical data suggests that the average availability during the winter peak should be about 35%, but the actual figure for 2007/08 was only 8%. As the volume of wind capacity on the system increases, this will become more of a concern for system operators.

This report from The Times suggests that the UK blackout could have been prevented if National Grid had been prepared to accept what it regarded as an overly high price for power from E.ON‘s Isle of Grain power station. Isle of Grain is an oil-fired power station (as are RWE‘s Fawley and Littlebrook, from which the article says National Grid eventually bought power), so the bid price of £950/MWh ($1900/MWh) is not surprising. This does, however, highlight the fact that National Grid does have a certain amount of leeway as to how it manages meeting demand. It is not obliged to take every offer that comes its way if it thinks that a better one can obtained, and it is able to balance long-term considerations against short term expediency. Also National Grid is apparently insisting that Grain wasn’t actually available then needed though someone is obviously telling The Times that it was. Ofgem may have a little bit of trouble sorting this out.

With the UK’s electricity supply now back in proper working order, the search for someone to blame for the blackout has begun in earnest. The Times has a number of good articles here, here and here that sum up most of what we have heard from our contacts. The Register also has a well informed article on the subject.
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Thousands of customers across the UK were without power yesterday as a result of a perfect storm of plant outages that left National Grid struggling to schedule sufficient generation. The problem began around noon when the grid operator issued a “High Risk of Demand Reduction” notice following the unexpected and almost simultaneous shutdown of both the Sizewell B nuclear plant (British Energy, 1180 MW) and the Longannet 1 coal-fired plant (Scottish Power, 576 MW).
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So British Energy has been put up for auction, and they got only one bidder. Ah well, that’s better than when the UK’s electricity industry was first privatized. Then no one wanted to buy the nuclear plant.

But what to do? For that lone bidder is not a safe and reliable British company, but rather a dastardly Frenchman! Well, Electricite de France (EdF) does know rather a lot about running nuclear power stations. It is not surprising that they are interested. But the British public, quite understandably, is nervous about selling such high profile resources to Johnny Foreigner.
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