The Government’s energy strategy at the election earlier this year was for gas, particularly from fracking and nuclear energy, but this now seems to be changing for nuclear and off shore wind.
The UK used to get 100% of its gas from the North Sea, and we are now only 43% self-sufficient in gas. The gas price has currently peaked due to an explosion in the main gas refinery in Austria supplying gas from Russia to Europe and a split mains pipe from the North Sea, which has disrupted supplies for several months. Gas produces CO2 emissions unlike renewables and nuclear.
The Government are keen to promote nuclear energy but the cost of the new Hinkley Point C nuclear reactor, which will produce 7% of the UKs electricity is &92.50MWh fixed for 35 years plus RPI, but there have been large cost over runs and delays, and it is not expected to be completed for at least 8-10 years. In the meantime all the remaining coal fired power stations, which produce 9% of the electricity, are going to close by 2025. Also all the ageing nuclear power stations are going to close by 2024, so there is going to be a big gap in the energy supply.
The saviour to the UK’s energy supplies is renewables, which is currently producing 25% of the UKs energy. Not only does renewables have zero CO2 emissions, but the costs have fallen dramatically, so that some projects are now viable without any subsidy. For example, offshore wind in a recent Contract for Difference auction tendered a price of &57.50MWh for 2022/23, which is nearly half the price of nuclear. The price of on shore wind and solar is slightly lower than the cost of gas fired power stations, at about &65MWh.
So renewables are as competitive as traditions power stations and in in the case of off shore wind substantially cheaper. The main issue with renewables is they are intermittent. The wind does not blow or the sun does not shine, but this is being overcome with a 'Smart' grid and the use of battery storage, to store energy when it is cheap and put it back into the grid when there is a shortage, and the price is high.
Scotland has a target of 100% renewables, as do some other countries and the use of renewables was endorsed at the recent Paris Climate change conference by the whole world, except for President Trump. The UK government will be keen to go with what every diversified energy sources produce the cheapest energy and that is going to come from an energy mix, which will include an every higher percentage of renewables.
For further information contact Mark Newton on 01858 411215 or email here
