Full steam ahead for gas
With rolling blackouts predicted for UK cities in just two years time, we are running out of energy options fast, says Lochinvar managing director David Pepper
Between now and the spring, 8% of our total national power generation capacity is to be shut down. Over the next three years, as the end of coal-fired power arrives, as much as 25% of our national supply will go. What is going to replace it and keep our lights on?
Ofgem chief executive Alistair Buchanan told the recent CIBSE Annual Lecture that the UK would have, at best, 4% spare energy capacity by 2015. This will, almost certainly, lead to powercuts at times of peak demand in many parts of the country. He added that the country's renewables development programme was moving 'profoundly slowly' and still could only account for less than 10% of our national energy needs - far short of being able to plug our energy gap.
'The UK's power demand is falling, but our capacity is falling faster,' he said.
The first of our new nuclear power plants - Hinkley B - is not due to come on stream until 2021, which is two years later than planned. The rest of the new generation of nuclear generators are at least another five years behind that. The start of the carbon floor tax this April will make our remaining coal-fired energy plants uneconomic to operate - yet coal provided 45% of the UK's entire electricity capacity in 2011.
Plenty of gas around
Thankfully it seems there is plenty of gas around, particularly with the emergence of the massive global reserves of shale gas. The Chancellor's Autumn Statement confirmed that the Government sees this as our saviour and has swept any concerns about contamination of water supplies or earthquakes from the 'fracking' extracting process under the carpet. It is full steam ahead to the new age of gas.
When our push for renewable energy began, gas was expected to be providing just 30% of our total energy needs by 2020. Now, as Mr Buchanan informed the CIBSE lecture, it will need to be providing as much as 70% - or we will be in big trouble. His main priority now is to persuade the Government to build more gas storage capacity.
George Osborne announced plans to build 30 new gas-fired power stations and the availability of tax breaks for shale gas firms. The US is fracking huge amounts of gas out of the ground in a bid for energy independence and lower consumer bills - and our government is intent on doing the same. They don't want us to be at the mercy of overseas suppliers who may not wish us well. Last February Russia set a lot of alarm bells ringing when it arbitrarily reduced gas supplies to the West by 10% during a cold snap.
End users might be hoping that greater availability will lead to falling prices, but most forecasters are not predicting lower costs for this 'new' gas as it is expensive to extract and competition for supplies will become increasingly fierce. This should, hopefully, provide an incentive to minimise wastage and, with the right energy efficiency measures, help to preserve these valuable natural resources.
Look how quickly we squandered the natural resources of North Sea oil. In less than a lifetime we have frittered away what should have been a precious asset for future generations. If we are lucky enough to have a second opportunity thanks to the emergence of shale gas we must do our best to preserve it. Also, gas is a fossil fuel so there will be an environmental price to pay if we burn it recklessly.
The Chancellor could not be expected to fully understand the technical aspects of energy efficiency, but we might have hoped that he would recognise the potential business and social benefits. The Government's own figures show that energy reduction could cut £10bn from our annual electricity costs - with or without new gas supplies. Simple energy efficiency measures, like upgrading heating or increasing insulation, could almost wipe out the expected annual rise in average consumer energy bills of £175, which would be good news for the most vulnerable in our society. The same principle would apply to commercial buildings.
There is a real danger that policy makers will see the emergence of huge reserves of fossil fuel as the answer to their prayers and disregard everything else. The planned roll out of Display Energy Certificates (DECs) to private buildings has already been dropped and important changes to Part L of the Building Regulations are delayed. A further 20% reduction in emissions from commercial buildings is proposed by DCLG, but this is now in danger of going the same way as the 'consequential improvements' that were also supposed to be in the new Part L and paid for by the Green Deal.
The energy and engineering industries are almost unanimous in urging the Government to keep up pressure on building operators to measure and monitor their energy use - yet officials seem to be putting their fingers in their ears again.
The existing DECs are also only to be revisited every ten years, which makes them almost totally useless. If we lose focus on energy consumption, building operators will quickly slip back into their old bad habits and we will waste any new energy we have.
There is, at least, the Electricity Demand Reduction Consultation, which is considering a 'Feed-in Tariff' for energy saving and electricity efficiency measures such as improved controls for heating, ventilation and air conditioning.
Reduced electricity use
The department believes that these measures could lead to a 10% reduction in electricity use by 2030 and cut annual costs by £4bn. Our industry can already deliver the simple engineering adjustments in buildings that would take us towards these impressive figures and hugely reduce the pressure on our National Grid.
So do we really need yet another consultation? Surely, we simply need to enact and police the legislation we already have and roll out a programme of common sense engineering?
In general, however, the focus back on gas should be very good news for the commercial boiler and water heating sectors. Manufacturers have spent the last two decades developing and refining gas-fired equipment so that they are now available at peak efficiencies.
If policy makers are confused or oblivious, then it will fall on our industry to keep the focus on energy efficiency and ensure new gas supplies are put to the best possible use. Contractors are very familiar with gas products and know how to select the most appropriate solution in each case. They have the expertise to help drive down energy waste and costs and, at the same time, make our 'new' gas last as long as possible.
3 January 2013