Energy has been hardest hit by the deluge of EU directives instructing us what we could do and how we could do it…
The most corrosive impact of Britain’s membership of the EU has been on planning. In particular it has created energy supply chaos.
From fishing to farming, from trains to textiles, every facet of production had to fit the EU plan and not Britain’s interests. Growing more potatoes than allowed, grub them up. Producing more steel than permitted, mothball the plant. Generating more electricity from coal than the directive dictates, close the power stations – and kill off coal mining into the bargain.
As well as destroying industry, the EU approach undermines Britain’s ability to plan for the future. As successive governments have followed the Brussels planning line on this, our capacity to decide for ourselves what is important for our future has become rusty. Nowhere is this more apparent than in energy production, a sector that needs planning over decades. Instead chaos and short-termism rule.
As a country we are heading for independence from the EU. But as a direct result of flawed government policy decisions, we are also heading for dependency on continental Europe for electricity.
The commitment to renewable energy production, coupled with a delayed introduction of new nuclear power capacity, has left a shortfall in national plans for electricity generation from other sources including coal and gas. Such provision is crucial to balance increasing dependency on intermittent or weather dependent sources such as wind turbines and solar cells.
The energy Capacity Market introduced in 2014 aimed to ensure security of supply by guaranteeing that entrants into the market would be viable over time. But this has not encouraged enough investment in new power stations. Estimated demand was for four new large gas power stations. Yet only two medium sized plants have been built.
On current projections, the country needs 26 gigawatts (GW) of generating capacity from new gas plants by 2030 but is set to have 14.3 GW. This in itself may not lead to power shortages but will lead to price surges because of the way the prices are struck. The current overall capacity in 2016 was 78 GW, down from 81 GW in 2015.
The result is that just as Britain becomes independent again, we will become more dependent on foreign electricity imports. The latest estimate in October 2017 was that by 2030 electricity imports would be 67 terawatt-hours annually. That’s ten times the amount originally projected back in 2012.
To this end the government has subsidised the construction of interconnectors to the Continent. These will create import capacity of 5.5 GW by 2020. Electricity will come from France, Holland, Germany and Belgium.
‘If this government is serious about its Industrial Strategy, it will have to sort out its energy policies too.’
Herein lies the problem. Energy dependence can translate into political dependency as well as practical issues such as the vulnerability of undersea power lines. In 2016, a ship dragging its anchor in storm conditions damaged the connector to France and halved supplies for two months. And the future energy requirements of exporting countries will affect what we can import.
France has been able to produce surplus electricity because of past investment in nuclear power. This is less certain in future. Nuclear reactors in France are almost all products of 1970s technology; many are now over 40 years old and are reaching the end of their lifespan.
Twenty units have required partial shutdowns for repairs to water circulation and coolant plants. Tricastin nuclear site north of Avignon required major safety work and shutdown its four reactors last September, cutting capacity by 3.6 GW.
President Macron is determined to cut nuclear power generation by about a third, closing 17 power stations in the next eight years. A quarter of French production will need to be from non-nuclear sources at the same time as the British government wants to import more power from France.
The same problem applies to Belgium and the Netherlands. In spite of EU energy directives they have a greater dependence on fossil fuel production than Britain and that can't continue if they are to meet emissions targets.
Germany has multiple complications that call into question reliance on their surplus. While Britain penalises fossil fuel production, Germany has opened 11 GW of new coal fired generation since 2011. Lignite-burning stations now contribute over 40 per cent of their electricity. Germany’s nuclear power reactors will be phased out by 2022.
Britain faces a perfect storm. Imports from high emission sources supplant production here. They pay no Carbon Climate Levy and are imported using British state-subsidised interconnectors. We have failed to build our own power plants and battery storage facilities at precisely the same time as imports are likely to become less available and more expensive.
This has significant implications for our manufacturing base. Industrial electricity consumption is declining because of technological advances such as improvements in heat insulation and battery development. In addition it’s due to the decline in manufacturing capacity.
Closure of a steel works does not mean we stop needing steel. It simply means we must get it from somewhere else, and we have lost direct control over quality and availability. Steel is an essential product; and the issue of quality is important for our future.
Low-grade steel bought at low cost from another country might be appropriate for some applications. Specialist applications in instruments, tools and nuclear plant demand the finest quality, produced by a skilled and inventive workforce. Steel is an energy intensive industry and needs a dependable power supply if we are to make it here.
Britain needs a long-term, planned mixed energy strategy. This must reduce supply risks and has to be based on the interests of the people and industries of Britain. The EU’s political aims or the balance sheets of overseas companies are not our concern.
If this government is serious about its Industrial Strategy, then it will have to sort out its energy policies too, and quickly. It will need some prompting.
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