A major row erupted in Holyrood after Scottish Energy Minister Fergus Ewing warned MSPs that England runs the risk of power cuts within two years unless urgent action is taken to bring new generating capacity on-stream.
As reported two days ago in Scottish Energy News – Ewing rebuked the UK Government for inserting a clause in the UK Energy Bill to remove the Scottish parliament’s power and discretion over the Renewables Obligation in Scotland. This amendment was approved by the House of Lords in a late-night debate at Westminster.
Turning then to the ongoing UK energy market reforms (EMR) the Scottish Energy Minister then issued the Scots Government warning that England faced a far higher risk of power black-outs under EMR than Scotland.
Ewing told MSPs: “I also share the concerns expressed by the Office of Gas and Electricity Markets and the National Grid about the risks to security of supply. Electricity margins could drop in England to as little as 2% by 2015-16, which is a huge challenge to security of supply. The margin is the difference between the aggregate capacity to generate electricity and the peak demand. In contrast, the equivalent Scottish margin is 20%.
“Scotland exports around a quarter of its output, helping keep the lights on across the UK. Longannet, Scotland’s largest power station, for example, could feasibly meet 25% of our annual electricity demand.
“But Longannet needs significant investment and Ofgem’s transmission charging review and the design of EMR’s capacity mechanism are key factors. The UK Government’s locational pricing methodology and EMR will impact on Longannet.
“The uncertainty also means that we have the ridiculous situation at Peterhead where the station has de-rated from 1,800 to just 400MW. Meanwhile, there are no plans to develop the new gas station at Cockenzie, which was consented to two years ago, due to UK energy policy confusion and uncertainties.
“Our thermal generation must be cleaner, and it can be, but those stations will power Scotland while new technologies are developed, balancing the grid and seeing the UK through this period of investment hiatus. The UK Government must ensure that electricity market reforms take into account Scotland’s role in providing secure supplies of power across the UK.”
The Minister then underlined the Scots Government’s commitment to renewables, while Murdo Fraser, MSP, the Scottish Conservatives’ Energy spokesman pressed the case for nuclear power.
Ewing said :”Hydro matters in Scotland. That is why we used our discretion under the Renewables Obligation to maintain higher support for hydro than there has been in the UK. Indeed, Scottish & Southern Energy told me that its £30 million project at Glasa was explicitly linked to Scottish Government RO support.
“Meanwhile, work on support for island renewables shows that Orkney, Shetland and the Western Isles could provide up to 5% of total Great Britain electricity demand by 2030. However, the current UK Government proposals fall short of what is required to deliver that potential.
“Indeed, the contrast with the UK Government’s support for imported nuclear technology could not be clearer. Consumers will pay up to £1,000 million each year for 35 years, which is more than twice the period of 15 years that is available for renewables technologies. That contract will give new nuclear electricity double the current wholesale price for electricity.
“England faces very real risks of brownouts – or intermittent power supply – and even blackouts as soon as two years from now. We are extremely keen to avoid that situation and, indeed, the thermal generation capacity at Longannet, Peterhead and our two nuclear power stations is significant enough to supply that power.
“Offshore renewable energy technologies have huge economic potential for Scotland and the UK – unlike nuclear, which is all cost and little benefit.”
“The contract length that has been agreed between the UK Government and EDF Energy for the new Hinkley Point-C nuclear power station will be 35 years and the contract will be worth an estimated £1,000 million a year. Given that the station may not be in commission until 2023 that means that UK consumers will subsidise nuclear electricity until 2060.
“There is another difference: decommissioning costs. The existing decommissioning cost of clearing up the UK’s nuclear waste legacy at Sellafield has reached £67.5 billion, and there is no idea when the costs will stop increasing.
“The total cost of subsidies to the nuclear industry is not far off from being on a par with the cost of the subsidies for the renewables industry.
“Two nuclear power stations are being constructed in mainland Europe as we speak. At the EDF project at Flamanville, the cost has increased to £8 billion from the original estimate of £3.3 billion – it has more than doubled and is four years behind schedule.And Finland’s fifth nuclear reactor is six years behind schedule and has a cost overrun of up to £3.6 billion.
“The cost overruns of new nuclear power stations are a strong argument for not adopting them.”
But Murdo Fraser (Mid Scotland and Fife) (Con) replied: “What we need in Scotland and across the UK is not only a balanced energy policy but a properly informed debate.
“I was rather confused by the minister’s comments on the cost of new nuclear power and the partial picture that he painted. I have with me the draft contract for difference strike prices, which shows that the price per megawatt hour will be £105 to £120 for biomass; £95 for hydro; £125 for large solar photovoltaic; £155 for offshore wind; and £100 for onshore wind.
“As I am sure the minister well knows, the strike price that has been agreed for the new nuclear station at Hinkley Point is £92.50, which is cheaper than the price for wind, solar, hydro, biomass or tidal and, unlike wind, nuclear has no problems with intermittency or unpredictability.”