This week was World Food Day. Since food security is such an important issue, I was tempted to write about the challenges facing us this century. But, as has often been pointed out, malnutrition is not primarily one of food production, but availability and affordability; if there are no roads or proper storage facilities, and if people have no money, then harvest sizes mean nothing.
The other key thing which occurred to me about food is that, just as the world is always only one harvest away from a crisis, so is it also possible (in principle) to boost food production from one season to the next. Planting a bigger area, sowing better seed, ensuring proper fertilization and adequate irrigation in dry periods all lead to bigger crops. So what is a vulnerability is also to some extent a strength.
But the other essential underpinning of modern societies – energy – cannot rapidly be upscaled (neither, barring a catastrophe, is it prone to fail as crops can). The decisions we make today will shape our future for decades to come. So, like any long-term investment, correct decisions are important. This is what makes the current love affair with renewable energy so difficult to fathom.
Renewable energy technologies for electricity generation (with the exception of biomass) are, by their nature, intermittent. It cannot be emphasised too much that this makes it impossible to rely on them as the mainstay of the supply grid until cheap energy storage becomes available on a vast scale (and it’s not even on the horizon yet). The integration of significant amounts of renewable generation into an existing supply is complex and costly and includes the need to have conventional capacity on standby.
This means that, even as the nominal costs of installation go down, the real costs remain higher than any combination of just gas, coal and nuclear. Although there is continued argument about the figures, there is an additional cost to energy bills from green energy policies. In the UK, this is becoming a big political issue, as the major energy suppliers have begun to raise their prices by several multiples of the rate of inflation and are pointing out that this is due partly to government-dictated green levies, as well as wholesale gas prices and rising distribution costs (British Gas to raise prices by 9.2%).
Germany has gone further down the renewable energy road than the UK and there too it has become a major political issue. As an article in the Financial Times this week (Soaring renewable energy costs set to stoke German energy debate) puts it: “Germany’s four network operators revealed on Tuesday that the annual cost to support German renewable energy feed-in tariffs is set to rise to €23.6bn in 2014, from €20.4bn this year. . .According to a Financial Times calculation the cost of subsidising feed-in tariffs under Germany’s EEG renewables law will therefore have increased to some €109bn since 2000, when the EEG law was introduced . . . There is growing concern among Germans that solar and wind subsidies are raising German electricity costs, threatening industrial competitiveness and making life tougher for the working poor.”
The situation is exacerbated for consumers because, in Germany, energy-intensive industries are exempted from paying the costs of feed-in tariffs, with the burden therefore falling even more heavily on domestic consumers. This nicely illustrates the government’s dilemma: passing the additional costs to industry would further reduce competitiveness and weaken the economy, making the present energy policy even less affordable, but ordinary voters are the ones to suffer in the meantime.
The UK finds itself in a similar predicament. As the BBC’s political correspondent puts it (Bashing the ‘big six’), “In truth politicians of all colours are having to grapple with not one energy crisis but three: rising bills, climate change and the very real threat of blackouts.” We have to remember that this whole policy is driven by the perceived imperative to tackle climate change and this objective is overshadowing the normal priorities of affordability and security.
An august committee from the Royal Academy of Engineering has this month published a report commissioned by the Prime Minister’s Council on Science and Technology on one of the three components of the energy crisis (GB electricity capacity margin). They point to the development of a worryingly small margin at periods of peak winter demand, with older coal-fired stations being decommissioned as they reach the maximum number of operating hours available to them under the Large Combustion Plants Directive, efficient Combined Cycle Gas Turbine plants being mothballed because they are becoming uneconomic to operate under the current regime and further investment held back by the uncertain nature of the electricity market in years to come.
The study recommends some joined-up thinking and the creation of some certainty regarding policy so that rational investment decisions can be made. It also recommends removal of uncertainties on the carbon price floor, but unfortunately the introduction of this will simply further disadvantage the UK compared to the other EU Member States. Britain would decarbonise more rapidly as jobs were exported faster than ever.
Finally, readers should note the following quote from the report: “In the mid to longer term, the increasing replacement of thermal plant with renewable generation, which is more intermittent in operation, will present challenges to the maintenance of a secure capacity margin. The government should ensure that the design of the capacity mechanism is robust to the transitional challenges of a future low carbon system and is accessible to capacity contributions from a range of sources, including demand-side response.”
The other thing the government could do, of course, would be to review the entire basis of renewables policy from first principles. This is surely going to end in tears at some point, but preferably sooner rather than later.
Apologies
As some readers have pointed out, a dropped aitch made a particular sentence in last week’s newsletter meaningless. The correct sentence is “... with photovoltaic systems contributing 5.1TWh to the country’s grid, with a maximum output of 24GW on 21 July contributing to a total of 50GW...). The original mention of ‘5.1TW’ was, of course, a careless slip. Apologies.
Martin Livermore
The Scientific Alliance
St John’s Innovation Centre
Cowley Road
Cambridge CB4 0WS
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