Mind the EU energy gap
Once you interfere as comprehensively as the EU has done in energy provision you create difficulties in keeping the lights on, and you make energy considerably dearer. Another reason to rethink our relationship with Brussels
The closures of perfectly good coal burning power stations are coming thick and fast thanks to EU rules requiring their premature closure. The older nuclear stations are also approaching their shut down dates.
The UK has lost its normal margin of reserve capacity, and is now close to the point where on a cold day in winter with no wind we will have to import sufficient power to meet demand. The ability to import is becoming part of the calculation of how we keep the lights on.
This is in accordance with the EU’s wish to create a unified energy market across the EU, so all EU countries come to depend on each other and look to Brussels to control their energy policies as a result.
The UK government is well aware of the dangers to security of supply. Some of us have been arguing about this for years, knowing that it takes years to plan, design and build new generation capacity. Last week, the government did decide to authorise a new large nuclear power station at Hinkley Point. The investment will be made by a lead French investor and a supporting Chinese investor.
UK taxpayers and electricity consumers will not have to put up any money for the planning and construction phases, but the government is going to guarantee a high electricity price once the station is working. This is the price of pursuing a low carbon economy, as the price of gas capacity would be lower.
The nuclear station on its own will not be enough to take care of all the closures and any increase in demand we might need in the years ahead. The UK has to plan for its rising population, and for the EU passion to switch a lot of transport, both rail and road, to electricity from primary fuels.
I would like to see the government announce new gas power stations. They should represent the cheapest and easiest way of increasing generating capacity, and may well in future be fuelled by gas found in the UK.
Unfortunately, owing to the decision to rely much more on wind energy for baseload power, any gas or other similar power will be dearer. As the wind farms take precedence when the wind is blowing, the grid cannot guarantee demand to new gas power stations. They are needed for cold days, days of high demand, and days with no wind.
This makes their power dearer as well, as the consumers have to pay for excess capacity anytime the wind is blowing.
Once you interfere as comprehensively as the EU has done in energy provision you create difficulties in keeping the lights on, and you make energy considerably dearer. Now the best we can do is a quick fix of more gas generation at a price. Meanwhile industry has been warned that if we do have high demand days with no wind, they will be asked not to use power at peak times.
Mr. Redwood's writing is re-posted here by his kind permission. This and other articles are available at johnredwoodsdiary.com
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