U.K. Renewable Energy Push May Prevent Electricity Crisis

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Five people were arrested yesterday near the Sellafield Ltd. nuclear reprocessing site in Cumbria. Close

Five people were arrested yesterday near the Sellafield Ltd. nuclear reprocessing site in Cumbria.

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Photographer: Suzanne Plunkett/Bloomberg

Five people were arrested yesterday near the Sellafield Ltd. nuclear reprocessing site in Cumbria.

The U.K. is heading for power blackouts within five years unless Prime Minister David Cameron devises a better strategy to build new nuclear plants, the former government’s chief scientific adviser said.

“The risk of the lights going off is very serious,” Sir David King, who advised Tony Blair and Gordon Brown’s administrations through 2007, said in an interview. “At the moment the industry sees an amber light on nuclear new build. We need a much clearer vision of the long-term future.”

The comments, accompanying a report released today from Oxford University’s Smith School of Enterprise and Environment, add to concerns that the government is dragging its feet on replacing a quarter of its electricity generators that finish service by the end of the decade.

The energy regulator estimates 200 billion pounds ($320 billion) must be spent by 2020 building new power stations and upgrading the electricity grid to cope with additional demand and the plants that retire from service. Electricite de France SA and Centrica Plc (CNA) are leading the companies seeking to bid for work building new nuclear stations.

King, who heads the Smith school, is aiming to prod the government into streamlining its decision-making process and coax the Treasury into making energy a priority as Chancellor of the Exchequer George Osborne plans a budget statement on March 21.

Source: Smith School of Enterprise and the Environment via Bloomberg

U.K. former government's chief scientific advisor Sir David King. Close

U.K. former government's chief scientific advisor Sir David King.

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Source: Smith School of Enterprise and the Environment via Bloomberg

U.K. former government's chief scientific advisor Sir David King.

The professor suggested ministers set up an independent “commissioning authority” that would order nuclear, gas and renewable power developers to erect plants, cutting through existing bureaucratic channels at the national and local levels.

Blackouts in Five Years

King said power outages could occur as early as 2017 as old nuclear, oil and coal-fired power stations are closed because not enough is being done to replace them. The school's study shows Britain can’t meet its goal of cutting carbon emissions 80 percent by 2050 without ramping up nuclear power and electrifying both transport and heating.

The comments contrast with findings by Bloomberg New Energy Finance, which last month concluded that growth in renewable energy will prevent the U.K. from suffering an electricity crisis. Britain will build more than 30 gigawatts of capacity by the end of 2016, two-thirds of it in solar, wind and biomass and the rest largely fired by natural gas, according to the researcher.

‘Expensive’ Renewables

King said that switching all generation to renewables would be “enormously expensive” because everything would need to be backed up by equivalent gas-fired capacity for when the wind doesn’t blow. The power grid could support a maximum of 20 percent large-scale wind power, alongside smaller turbines, solar panels and geothermal heat pumps fitted to homes, he said.

The professor also said he thinks the U.S. shale gas bubble is “hype,” with wells depleting after a year or two of extraction, and that the U.K.’s “North Sea Oil bonanza is now over” after production peaked in 1999. Output now is below half those levels.

“We have lost something like 50 billion pounds a year worth of oil at $100 a barrel,” King said. “If we’re going to make ends meet, we need to end up by 2050 switching transport onto the grid and switching heat onto the grid. We can have a completely domestic energy production by mid-century.”

The Smith School studied four future supply and demand scenarios for the U.K., each of which entailed at least 40 gigawatts of nuclear generating capacity in 2050. The U.K. currently has about 11 gigawatts of nuclear power, with all but 1.2 gigawatts scheduled to close down by 2023, according to the World Nuclear Association.

New Nuclear

EDF’s Hinkley Point reactor, due for completion in 2018, will be the first new atomic plant built in the U.K. in more than 20 years.

Cameron last month signed a nuclear energy agreement with France, paving the way for a new wave of plants. France’s Areva SA, along with Westinghouse Electric Co., in December received U.K. regulatory approval for their new reactor designs.

Cameron’s Conservatives lead a government that includes the Liberal Democrats, a party that opposed nuclear power before it joined the administration. The coalition is now encouraging its development, and last year introduced a carbon “floor price” that taxes power from fossil fuels, benefitting nuclear power and renewables. That’s not enough to spur sufficient nuclear, King said.

“The basic idea from DECC of setting a floor to the carbon price is a very good one, but I don’t think you can sit back and let the market deliver because the market is short-term,” said King, who served as chief scientific adviser to the government from 2000 through 2007.

King also suggested the U.K. should consider converting its plutonium stocks into so-called MOX fuel, and then leasing that to utilities for electricity generation, retaining the obligation to dispose of the waste. That would lower the cost of disposing of current stocks of nuclear waste, it said.

King’s team said that experimental fast reactors would lower the need for uranium fuel, which may become scarce if other countries pursue an expansion of nuclear.

“We need a strategy for energy production for the U.K. that optimizes our development and optimizes the business of keeping the lights on,” King said. “We’re not there yet.”

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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