We've all heard of globalisation. Ofcourse it also affects energy as well - so when Wulf Bernotat (chief executive of Eon) says that "We operate on a worldwide scale, so it is normal that we want to invest where conditions are right so that we can make a good return... principally you go where you can get the best possible conditions" we should probably sit up and take notice.
He's hinting that, with Eon making a loss on its retail arm in the UK this year, Eon may pull out of the UK in favour of investing elsewhere - after all with the global credit crunch they do only have finite resources.
It's a really good interview, published in the Sunday Times, and well worth a read.
“You have old nuclear plants, old coal, expensive gas, a need to invest in renewables to reach unrealistic targets, and a slow [planning] process. Doesn’t that sound like a problem to you?”..
Yeah, it does.
Monday, November 17, 2008
Saturday, November 15, 2008
CO2 in America
Remember the Simpsons Movie - where the EPA put Springfield under a big dome?
Well, they're taking over the world again, but in a much, much better way.
The EPA (or a body internal to it) has decided that it should think about regulating CO2 emissions - possibly only from coal, but possibly across the entire nation.
This is a fantastic thing (almost). The great thing is that it could bring the US in line with the EU, where CO2 emissions are capped and cannot (regardless of what is done) legally exceed the cap.
The bad news is that it will delay the certification process for new coal fired power stations over there for a year or two.
Perversely this bad news could be good news for the UK - if no one in the US can build a new coal power station the prices for a power station in the UK could fall, not only making Kingsnorth more likely, but lowering the cost of our electricity bills.
Life seems to me to always be one step forwards and two steps back, but today, much like the day Obama was elected, life seems to have forgotten about stepping back - at least for the UK.
Well, they're taking over the world again, but in a much, much better way.
The EPA (or a body internal to it) has decided that it should think about regulating CO2 emissions - possibly only from coal, but possibly across the entire nation.
This is a fantastic thing (almost). The great thing is that it could bring the US in line with the EU, where CO2 emissions are capped and cannot (regardless of what is done) legally exceed the cap.
The bad news is that it will delay the certification process for new coal fired power stations over there for a year or two.
Perversely this bad news could be good news for the UK - if no one in the US can build a new coal power station the prices for a power station in the UK could fall, not only making Kingsnorth more likely, but lowering the cost of our electricity bills.
Life seems to me to always be one step forwards and two steps back, but today, much like the day Obama was elected, life seems to have forgotten about stepping back - at least for the UK.
Friday, November 14, 2008
Eon
Kingsnorth raises passions - that's certain.
Yesterday it was revealed that Eon have pulled out of recruitement fairs nationwide after more protesters than students showed up - at least that's the theory which is bounding about. Green groups are naturally claiming victory (that's what they do best), but personally I think that it's pretty sad.
What they've really done is reduced the choice that students have - really I would be surprised if that many people did go to the stalls, and created the feeling that Eon is under attack.
That's a shame, because they are doing an awful lot of work to reduce the CO2 intensity of the electricity which they provide. Seen the "wind of change" adverts?
Wind power is never going to replace fossil - even with the proposed European super grid which could increase the stability of electric grids as the proportion of wind power within them is increased.
Fossil gives us the option of gas or coal. I've heard that gas is four times the price of coal. Which would you rather purchase?
A final argument: if Eon can't recruit they'll have a stills shortage in all areas, not just coal (they'll internally adjust) and wind will also suffer.
Why would 'green' groups do that?
Yesterday it was revealed that Eon have pulled out of recruitement fairs nationwide after more protesters than students showed up - at least that's the theory which is bounding about. Green groups are naturally claiming victory (that's what they do best), but personally I think that it's pretty sad.
What they've really done is reduced the choice that students have - really I would be surprised if that many people did go to the stalls, and created the feeling that Eon is under attack.
That's a shame, because they are doing an awful lot of work to reduce the CO2 intensity of the electricity which they provide. Seen the "wind of change" adverts?
Wind power is never going to replace fossil - even with the proposed European super grid which could increase the stability of electric grids as the proportion of wind power within them is increased.
Fossil gives us the option of gas or coal. I've heard that gas is four times the price of coal. Which would you rather purchase?
A final argument: if Eon can't recruit they'll have a stills shortage in all areas, not just coal (they'll internally adjust) and wind will also suffer.
Why would 'green' groups do that?
Thursday, November 13, 2008
Ocean acidification
I wanted to come back to ocean acidification. It's a problem that probably doesn't receive as much coverage in the media as global warming does.
Possibly (since we're not fish) it's not quite as scary!
I was told (at the UK Carbon Capture and Storage Consortium meeting) that the shells of some sea creatures will start dissolving pretty soon unless something is done about it.
This came from a marine biologist at Plymouth University (Carol Turley perhaps?). She's published an article online about ocean acidification.
Very simply the argument is some of this excess CO2 in the atmosphere will dissolve in the worlds oceans and lower it's pH. This weak acid will dissolve the shells of some sea creatures (such as snails) meaning that, not only (when they die and sink to the bottom) is a large carbon pump lost, but that other species (such as pacific salmon, whales) will loose their food.
It's not a happy thought.
Worse still is that this is a very rapid effect (unlike global warming we'll see it in our lifetimes). I've seen a respected estimate of 2030 as to when this will start becoming a problem.
This does, I suppose, fit quite nicely as to when we must also stop emitting CO2 to prevent danagerous climate change (if not already too late).
What can we do about it?
Well, we have to stop emitting CO2. The emission of other greenhouse gasses (whilst unacceptable for global warming) are okay as far as ocean acification goes.
Best way to stop emitting CO2?
Carbon capture and storage.
Possibly (since we're not fish) it's not quite as scary!
I was told (at the UK Carbon Capture and Storage Consortium meeting) that the shells of some sea creatures will start dissolving pretty soon unless something is done about it.
This came from a marine biologist at Plymouth University (Carol Turley perhaps?). She's published an article online about ocean acidification.
Very simply the argument is some of this excess CO2 in the atmosphere will dissolve in the worlds oceans and lower it's pH. This weak acid will dissolve the shells of some sea creatures (such as snails) meaning that, not only (when they die and sink to the bottom) is a large carbon pump lost, but that other species (such as pacific salmon, whales) will loose their food.
It's not a happy thought.
Worse still is that this is a very rapid effect (unlike global warming we'll see it in our lifetimes). I've seen a respected estimate of 2030 as to when this will start becoming a problem.
This does, I suppose, fit quite nicely as to when we must also stop emitting CO2 to prevent danagerous climate change (if not already too late).
What can we do about it?
Well, we have to stop emitting CO2. The emission of other greenhouse gasses (whilst unacceptable for global warming) are okay as far as ocean acification goes.
Best way to stop emitting CO2?
Carbon capture and storage.
Wednesday, November 12, 2008
Carbon
Carbon dioxide is a commodity that can be bought or sold like anything else. It has a price, which is set by the market. If there are too many emission allowances on the market the price falls.
The price has, over the last few days, been falling. I assume that this is because of the economic downturn - after all not as many people are going to buy cement or steel if the construction industry is bankrupt. This means less production at these plants and so more emission allowances on the market.
This, ofcourse, affects the power generation sector.
Fossil power stations emit CO2. Gas power stations emit a little over half of what a coal power station will emit for the same electrical output (7/11ths or something like that - not sure really). When the third phase of the EU emission tradeing scheme starts companies will have to buy all of their allowances on the market - and if you know how this affects the price of electricity from coal (when compared to gas) you're doing better than me. It could still be cheaper - but this depends on the price of gas (to which the price of carbon is also connected).
It's all rather complicated.
Two things are for sure:
A higher carbon price makes coal more expensive, but drives generators further towards carbon capture and storage.
A more stable carbon price gives greater confidence to investors, making it more likely that they will get their money back if they invest in carbon capture and storage.
So, generally, a weaker carbon price is bad news.
The problem is that these decisions need to be taken today (see the BBC blackout article published today to understand the scale of the problem).
From where we stand today I'd invest in coal - at least to replace the plants which are being shut down. After all it's a cheaper fuel (although the capital cost is high) and with CCS it can have lower CO2 emissions than gas (where CCS is more expensive - so less likely).
The price has, over the last few days, been falling. I assume that this is because of the economic downturn - after all not as many people are going to buy cement or steel if the construction industry is bankrupt. This means less production at these plants and so more emission allowances on the market.
This, ofcourse, affects the power generation sector.
Fossil power stations emit CO2. Gas power stations emit a little over half of what a coal power station will emit for the same electrical output (7/11ths or something like that - not sure really). When the third phase of the EU emission tradeing scheme starts companies will have to buy all of their allowances on the market - and if you know how this affects the price of electricity from coal (when compared to gas) you're doing better than me. It could still be cheaper - but this depends on the price of gas (to which the price of carbon is also connected).
It's all rather complicated.
Two things are for sure:
A higher carbon price makes coal more expensive, but drives generators further towards carbon capture and storage.
A more stable carbon price gives greater confidence to investors, making it more likely that they will get their money back if they invest in carbon capture and storage.
So, generally, a weaker carbon price is bad news.
The problem is that these decisions need to be taken today (see the BBC blackout article published today to understand the scale of the problem).
From where we stand today I'd invest in coal - at least to replace the plants which are being shut down. After all it's a cheaper fuel (although the capital cost is high) and with CCS it can have lower CO2 emissions than gas (where CCS is more expensive - so less likely).
Tuesday, November 11, 2008
The UK Carbon Capture and Storage Consortium
The UK Carbon Caputre and Storage Consortium (UKCCSC) had their final meeting yesterday at the Insitution of Mechanical Engineers. Malcolm Wicks even showed up.
On the whole it was a very pleasent experience, with some mixed messages to take away:
1) By about 2100 the Southern and Artic Oceans will be so acidic (from all the CO2 dissolving in them) that any crustacians living in them will disolve.
2) The science now says that we really should be committed to an 80% reduction by 2050, with several reduction deadlines along the way.
3) China (probably amongst other nations) is feeling bullied into emission reductions and is still talking about efficiency improvements (probably for local air quality and to ease the pressure of supply) rather than CCS for large emission reductions
4) The electrical supply situation is a bit tight this week, with there only being 1GW spare on the grid. Go on there greenpeace, trip a coal fired power station and see what happens, I challenge you.
On the whole it was a very pleasent experience, with some mixed messages to take away:
1) By about 2100 the Southern and Artic Oceans will be so acidic (from all the CO2 dissolving in them) that any crustacians living in them will disolve.
2) The science now says that we really should be committed to an 80% reduction by 2050, with several reduction deadlines along the way.
3) China (probably amongst other nations) is feeling bullied into emission reductions and is still talking about efficiency improvements (probably for local air quality and to ease the pressure of supply) rather than CCS for large emission reductions
4) The electrical supply situation is a bit tight this week, with there only being 1GW spare on the grid. Go on there greenpeace, trip a coal fired power station and see what happens, I challenge you.
Monday, November 10, 2008
CCS competition
Interesting.
BP have just announced that they have pulled out of the governments CCS competition - leaving just three competitors (Kingsnorth [Eon], Longannet [Scottish & Southern], Peel power) in the mix.
What's even more interesting is that RWE are trying to force a judicial review to get their power stations back into the competition.
The competition does take a long time, and it's interesting to try and work out what could be fitted with CCS (by the competition) within the relevant timescales.
The answer is perhaps Blyth (or so I've heard), a proposed RWE power station in Northumberland; the competition is dragging so much that investement decisions have to be made prior to the outcome.
Whilst CCS can of course be retrofitted the companies just may not wish to go down this route.
Of course the EU's ban on coal fired power stations may just stop everything.
BP have just announced that they have pulled out of the governments CCS competition - leaving just three competitors (Kingsnorth [Eon], Longannet [Scottish & Southern], Peel power) in the mix.
What's even more interesting is that RWE are trying to force a judicial review to get their power stations back into the competition.
The competition does take a long time, and it's interesting to try and work out what could be fitted with CCS (by the competition) within the relevant timescales.
The answer is perhaps Blyth (or so I've heard), a proposed RWE power station in Northumberland; the competition is dragging so much that investement decisions have to be made prior to the outcome.
Whilst CCS can of course be retrofitted the companies just may not wish to go down this route.
Of course the EU's ban on coal fired power stations may just stop everything.
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