Along with protecting our territorial integrity, securing energy supplies must be the top priority of any government. But it hasn’t been for nearly 30 years, with disastrous results...
For the past 25 years we have had governments that have placed our energy supply in serious jeopardy. In this, they have been aided by the European Union, by green bigots, by reliance on the so-called free market and finance capital – and by the failure of the working class to understand just how serious the position is.
For a succinct summation of the problem, listen to a capitalist, Rupert Soames, a grandson of Winston Churchill. He runs a rarity, a British manufacturing company – Aggreko, based in Dumbarton, where it makes mobile generators used not just for one-off events but also for countries where the power supply is not secure (which is most of the world). It’s a huge manufacturing success: on 18 October it announced it would make pretax profits of at least £320 million. About a year ago Soames warned that urgent action is needed to secure Britain’s power supply. This is what he told the Scottish Parliament:
“Over the next eight years a third of our coal-fired capacity, two-thirds of our oil-fired capacity, and nearly three-quarters of our nuclear capacity will be closed down either through age or the impact of the European Large Combustion Plant Directive.”
He went on:
“I don’t know an example of any industrial country anywhere in the world planning to lose so much of its generating capacity so quickly. Absent a massive and immediate programme of building new power stations, with concrete being poured in the next two years, we will be in serious danger of lights going out.”
The National Grid stands to lose 30 per cent of its capacity by 2019, and we are probably beyond the point at which we can start building to plug the entire gap. Then Britain will join the developing countries that are Aggreko’s big customers. And when lights go out, industry and commerce stop, operations stop in hospitals, traffic lights fail, sewage farms stop working. People die.
It could happen earlier: by the end of 2013 the EU Large Combustion Plant Directive will have shut 9.8 gigawatts of oil- and coal-fired generation – on their own, 12 per cent of our total capacity: Tilbury, Cockenzie in Scotland, Didcot, Ferrybridge 2, Ironbridge, Kingsnorth, Littlebrook, Fawley and the Isle of Grain.
The EU Directive came into force in Britain in 2008, and applies to all combustion plants with a capacity of more than 50 megawatts (in practice, all the coal, oil and gas plants linked to the National Grid). It sets limits on the maximum levels of emissions of nitrogen oxides, sulphur dioxide and particulates (bits of ash, etc). Power stations had two options: either “opt in” by meeting the new limits (through technologies such as flue-gas desulphurisation) or “opt out” and close by 2015 at the latest.
In the intervening period, “opted out” plants have new limits on their emissions, forcing them to burn low-sulphur coal – which means coal from outside Britain. Never mind that our coal still produces less sulphur (1.6 per cent average) than burning oil (2.9 per cent average).
Out of around 27 gigawatts of coal-fired generation, power stations generating 13 gigawatts “opted out”. So here was the first sign of planning for over a decade: planning to lose around half of our coal-fired capacity. Planning for decline, but no planning to fill the gap. In addition, closures of 8 gigawatts of ageing nuclear power stations are anticipated by the end of 2015. Since 2008, though, some nuclear plants have had their lives extended, in particular Hinkley Point B, Hunterston B, Hartlepool, Heysham 1. But the extensions reach just to 2019.
Britain has around 80 to 85 gigawatts (thousand billion watts) of generating capacity. The bulk – 80 per cent – comes from burning coal, oil and gas; and almost half of this is gas. Nuclear provides around 13 per cent, other renewables (mainly wind) just 6 per cent, and hydroelectricity 1 per cent. Not all of the energy is available all the time: no power stations can run continuously, and wind power, obviously, needs wind. So we need the 80 to 85 gigawatts to service average maximum demand of around 60 gigawatts. Around 7.5 per cent is lost through transmission. We need a safety cushion, and we are losing it fast.
How did we get to this point? Go back 25 years and Britain’s energy industry – electricity and gas – was in state hands. Gas and electricity were both nationalised in 1948 following the disastrous winter of 1946/7 when the government had been unable to maintain electricity supplies. Power was switched off for 5 hours a day, industries lost power completely, radio broadcasts were reduced, television suspended, magazines told to stop publishing, etc.
Following nationalisation, British Gas and the British Electricity Authority (that became the CEGB) set about securing the nation’s energy supplies, and did so with great efficiency. It’s called planning – out of fashion these days – and it built up a highly developed industry.
Then the capitalist state decided that it would not assume any responsibility for the provision of energy. In came privatisation, and out went planning. The idea was that the market would provide, specifically the wholesale electricity market, with government intervention limited to incentives to produce power. If new power stations were needed, industry would build them. But the market hasn’t provided; hence the looming shortage.
Photo: Elene Elisseeva/Shutterstock
The solar power money machine
Solar power is an expensive bad joke for most of Britain. One of Labour’s last contributions to Britain’s energy disaster was the introduction of special feed-in tariffs and incentives for domestic solar power. You could install solar panels and be guaranteed 41p per kilowatt-hour for any electricity you feed into the grid. That’s about 10 times what you get for feeding electricity in from a hydroelectric plant.
If you lived in a house with a large enough south facing roof, and had £10,000 spare to invest in the installation, you would be getting an inflation-linked, tax free return of around 10 per cent, guaranteed for 25 years. The estimated cost to the taxpayer was £8.6 billion – £70 per UK household per year for 20 years. Or to put it another way, a transfer of wealth from everyone who doesn’t own a house with a large roof and hasn’t £10,000 spare to people who do. That’s the kind of redistribution of wealth Labour got into.
When the government halved the subsidy recently – it’s still a pretty attractive investment, better than buying government debt! – Friends of the Earth threatened legal action. ■
In 1986, Thatcher privatised British Gas to be followed four years later by the privatisation of electricity supply. Fortunes were made by the new owners, increasingly foreign. E.On and RWE (npower) are German, EDF is French, Scottish Power Spanish. That’s four of the big six electricity companies.
No one loved the market more than Blair. He even pushed it onto a not-unwilling EU in 2007: “The European Council decided in particular that supply and production activities should be separated from network distribution to allow competition on the networks, as already happens in the UK. … This means that for the first time, at least at distribution level, British companies can compete on equal terms with French or German companies—in particular, in France and Germany, not just here in the UK. That will bring reduced costs to business and to customers, and again it has our full support,” he said.
Yet our supply is less secure than at any time in history, and French, German and Spanish companies have moved in to take over the bulk of Britain’s energy distribution. Increasingly, these foreign owners are treating the British people as a captive colonial market. As the Daily Mirror exposed last year, French-owned EDF Energy increased gas prices here by 22.9 per cent and electricity by 12.3 per cent since the start of 2011. In France, gas prices went up 15 per cent and electricity by just 3 per cent. At npower, owned by RWE, gas rose in January by 21.6 per cent while in Germany RWE’s customers faced an 11 per cent rise. E.On’s UK customers had leaps of 21.4 per cent for electricity and 21.6 per cent for gas; its German customers saw electricity rise by an average of 6.7 per cent and gas by around 9.1 per cent.
There are effectively no controls on electricity prices – not since Labour told Ofgem, the Office of Gas and Electricity Management, to remove price controls, which it did in a phased way between 2000 and 2002. No wonder we pay a fortune for power. And those who can’t afford it die. According to the charity National Energy Action, between 25,000 and 30,000 old people die early in the winter because they can’t keep warm enough.
When prices started soaring, so did fuel poverty – that’s when you have to spend 10 per cent or more of household income on fuel costs to maintain sufficient health and comfort. Labour pledged in 2001 to abolish it for vulnerable families by 2010, and for all families by 2016. Then it took the brakes off price rises in 2002. From 2 million households in fuel poverty in 2003, this year the figure reached 6.6 million households.
If there’s one thing that’s even worse than expensive electricity, it’s no electricity. But get used to the idea. Steve Holliday, chief executive of the National Grid, told Radio 4’s Today programme on 1 March 2011 that the days of permanently available electricity are coming to an end. People, he said, would have to “change their behaviour” and consume electricity “when it is available”. It’s hardly sarcastic to speculate that this will mean you can only put the fire on in daylight hours when the sun is shining and a good wind is blowing.
In February last year Ofgem warned that after 2015 our energy supplies might not meet demand. Well, surprise, surprise. Actually, the mining and electricity supply unions were warning in the 1980s that this would result from privatisation.
“If there’s one thing that’s
even worse than
expensive electricity, it’s
no electricity. But get used
to the idea…”
How can Britain fill the gap? One way would be to use the coal that still sits in vast quantities under our land. But there we come up against the Large Combustion Plant Directive. New plants will need to stop carbon gases being emitted – and there is a way: it’s called carbon capture and storage technology. This and the previous government say they want to “encourage” the technology. It is still not fully developed though tests in Norway have been very successful. Nothing has been achieved so far apart from a tiny pilot plant at Ferrybridge, Yorkshire, that is looking at one-fortieth of the station’s output and then only at one part of the process. At present there is not a single idea for a new coal-fired station that has planning consent.
The nuclear necessity
Another way would be – and will probably have to be – nuclear. If we don’t build any new nuclear power stations, all but one (Sizewell B) are scheduled to close by 2023. In October 2011, the nuclear industry announced plans to build up to 16 gigawatts of new nuclear capacity in Britain, but nothing has actually happened. It takes time, rightly, to get plans right and go through the planning process. But we are woefully late. Ten years ago, when the government looked at the loss of nuclear generating capacity, it thought, fancifully, that renewable energy could fill the gap. So nothing was done until 2007, when it announced plans for 10 new nuclear stations.
But as with just about everything Labour did, it expected the market to carry out the plans. So here we are, four years on, without a single planning permission for a new nuclear station. EDF expects to put in a full planning application for Hinkley C in 2012. Just wait for the green screams – but if we don’t get these power stations, people will die for lack of power. The truth is that nuclear power is stunningly safe. The latest designs in China have a physics that shuts them down automatically when reactor temperatures get too hot.
We could plug the gap with gas. Gas-fired power stations are relatively easy to build, and increasingly efficient. But gas is costly, and we have to import it. Hence the significance of the gas deposits found in shale off Blackpool. They are simply enormous: enough, at current rates of consumption, to provide Britain’s entire gas requirements for 60 years or so. Of course, the greens object to any new use of gas, because it has to be burnt.
What about renewables? The short answer is that they are very costly. Wind power cannot be a solution. We’re paying for it already: in 2009 every single bill payer was shelling out £13.50 a year to subsidise renewables, mainly wind; by 2020 the figure for subsidising wind alone is set to rise to £70 on every bill per year.
What we need is simple: enough energy to run our lives and develop Britain. And we should do so at a reasonable cost, not hand billions to the rich. To get it, we will need energy from a variety of sources, nuclear and coal included. We must also attract more young people into the energy industry: some 80 per cent of the UK’s energy workforce is expected to retire by 2025. Power stations don’t build themselves, and their construction cannot be left to the market and the profit motive. We need investment by the state, including in science and in education and training.
The challenge for the working class is stark. Do we want a civilised life? Do we want a life without power cuts, random or not, and energy rationing? If so, think hard about what capitalism is doing: let it rule, and we will end up in the new Dark Ages. Think hard about what green activists say: let them influence things, and we’ll also be in the Dark Ages. We can’t all become energy scientists, but we can all make a bit more effort to find out what’s really going on. It’s called taking responsibility. ■
This article is an edited and updated version of a speech given at a CPBML public meeting in London in November.