Saturday, January 29, 2022
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Blundering blindly into an energy emergency

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IT looks as though the energy crisis is about to hit hard. An industry expert has already warned that factories will probably have to be switched off over the winter to conserve scarce gas supplies for households. This followed another warning, that the electricity price cap is likely to be lifted by 40 per cent (yes, that is 40 per cent) in the spring. Net Zero Watch, where I work, has called on the Prime Minister to declare an emergency.

This worrying news finally seemed to have been enough to awaken at least one minister from his slumbers. Kwasi Kwarteng, the man in charge of the nation’s energy policy, took to Twitter to defend what he sees as the Johnson government’s achievements in reducing reliance on ‘volatile gas from abroad’ and ensuring ‘greater energy independence’.

‘£1.7billion for large nuclear!’ he trumpeted. ‘£210million for small modular nuclear!’ he beamed.

As a way of demonstrating the almost complete disconnect between Westminster and the needs of the country, this was hard to beat. Hinkley Point C nuclear power station will not come on stream for another five years at best, and the money recently awarded to Rolls-Royce, ostensibly for small modular nuclear, is best understood as a way to stop the company from sinking, taking with it the country’s independent nuclear deterrent. Don’t expect a Rolls-Royce SMR in your town any time soon.

And while SMRs are an exciting new technology, Rolls is a long, long way from market, apparently not even having a design yet. Others are much further forward. A company called Nuscale has completed design approval for its SMR in the USA and hopes to start building in a year or two. The Japanese are even further ahead, with a 30MW SMR up and running.

The point of small reactors is, of course, to try to reap economies of repetition, by building multiple units to identical design in a factory. Before that can happen, anyone who wants to build one here has to overcome the formidable – and probably insurmountable – barrier of the UK’s nuclear licensing regime. Established to deal with traditional large reactors – in other words, one-off designs – and testing every nut and bolt to destruction, this is a process that is entirely inappropriate for the new approach to nuclear. Indeed, an industry insider recently told me that it would take ten years and cost £500million to get a £200million SMR through the process. In a sane world, we would simply adopt US and Japanese design approvals and start building. But Whitehall will never let that happen, and so it’s not just Rolls-Royce SMRs that are likely to be conspicuous by their absence in coming years.

Could gas save the day? The UK is lucky to be on top of a vast reservoir of the stuff; there are decades of our needs down there. Here again, the government stands in the way. The moratorium on fracking, introduced in 2019, remains in place, so the wellheads are closed and the pumps stand idle. Manufacturing industry, meanwhile, wonders whence its supplies are going to come. Even if we were to overcome the doubts of investors and the mobs of green protesters and get the onshore industry going again, regulation and planning constraints make it unlikely that meaningful quantities of gas would flow soon. This would be the work of six years, not six months.

Is there anything that could be done on shorter timescales? Well, you might think about replacing old gas-fired power stations with new ones. The improved efficiency would at least reduce demand for gas from electricity generators, but politicians of every shade of opinion having convinced the markets that the aim of policy is to shut these plants down for good, it is implausible that anyone will invest in new plant until we have an administration that rejects the scaremongering climate narrative.

In essence, then, there is nothing we can do about securing a domestic supply of energy – and therefore the nation’s energy security – for this winter, and probably not for several more winters. We have to hope that LNG (liquefied natural gas) imports can be secured for 2022 onwards in volumes sufficient to save the day.

That said, how much manufacturing industry, or how much of the energy supply industry, will survive the winter remains to be seen. The cold months promise to be interesting for everyone, and who knows what the country will look like by the spring? In a lecture in London last week, Steve Koonin, a former scientific adviser to President Obama, wondered whether western countries’ ill-considered climate policies might eventually lead to societal unrest or even breakdown. I think he’s right. Looking at the speed with which the energy crisis is unfolding in front of us, he may be proved correct much sooner than he thought.

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Andrew Montford
Andrew Montford is Deputy Director of the Global Warming Policy Forum GWPF does not accept funding from energy companies or anyone with a significant interest in an energy company.

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