The Politically Inconvenient Truth

The UK is facing a crisis on an issue that has been looming for several years, and Judgment Day has come for a definitive decision to be made on May 8. The issue we are up against is the foreseeable power crisis the country will eventually face due to years of underinvestment in electricity generation, and rapidly aging existing infrastructure. The UK is facing a ‘perfect storm’ of issues relating to the National Grid, with demand close to all-time highs, and supply currently stretched to the maximum. In the most recent Quarterly Report on energy the UK Government revealed in Q3 2014 the country produced its lowest amount of electricity since 1998, and imported 7% of its electricity requirements over the same period.

In the last 25 years gas generated electricity has increased precipitously as a contributor to the National Grid, from virtually no contribution in 1990 to over 40% in 2011, offsetting a similar drop in the use of coal. This shift away from coal legally must continue if the UK is to abide by EU legislation on large power stations, which comes into force in 2016. The political distancing from coal continued this week as the leaders of the three ‘major’ parties (Conservatives, Labour, and Liberal Democrat) signed an agreement to “end the use of unabated coal for power generation.” This expected drop in the use of coal is exacerbated by aging nuclear power stations that supply nearly 20% of the UK’s electricity, all but one of which are scheduled to come to the end of their working lifetimes between this year and 2023 according to the World Nuclear Association. Scotland is in the worst shape within the UK, with 58% of power generation capability due to close in the next eight years.

Tough political decisions need to be made on where the UK decides to go in regard to electricity generation, as each of the options available have issues associated with them:

  • Nuclear: Nuclear power plants are both very expensive to construct, as well as take a long time to come online to the power grid. There are also big question marks around the cost of decommissioning, as well as what to do with waste atomic material.
  • Gas: The UK’s production of gas from the North Sea is falling quickly, and gas is being imported at increasing rate from Norway and Qatar and the production of domestic shale gas reserves has been met with a great deal of political and local opposition;
  • Coal: The UK is increasingly moving away from the use of coal for environmental and legal reasons;
  • Renewables: Wind power in particular is remarkably fickle and can fluctuate from producing at 100% of its capacity to nothing on a still day. On average in the UK, wind farms are operating at only 25% of their tagged capacity

The UK Government in the coming years will have to make some difficult decisions about the direction of the country’s power generation. Whatever decision they make it will likely be unpopular to some parts of society, but overall it is time for the politicians to start taking our energy policy seriously, invest in a multi-faceted energy mix, and soon.

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