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Keeping the lights on

Douglas Fraser | 10:08 UK time, Thursday, 4 March 2010

Windfarms, nuclear, carbon capture or lots more filthy coal? The question of how to keep the lights on is keeping policy-makers working late into the night.

A conventional response is from the energy utilities themselves. They're telling government and regulators: give us adequate rates of return, with market signals on your preferred generating mix and guarantees of market security, and we'll put the generating capacity and grid improvements in place.

That conventional response is to build big new power stations, and even more new wind turbines. A less conventional response is to build much smaller, more local power stations, which could combine heat with power.

And there's another response, set out this morning by Aggreko, along with its annual figures: put in lots of temporary capacity, with capital costs per megawatt around a third of conventional power stations.

That's a big opportunity for Aggreko, the Glasgow-based company, which only 13 years ago was spun out of the venerable Scottish food processor, Christian Salvesen, and which today announces its revenue has powered through the billion pound mark.


Superbowl power


The company grabs headlines by providing the extra power required to keep the world's great events from blowing a fuse; the Vancouver Winter Olympics following on the Beijing Games, 20 consecutive Superbowls, the FIFA World Cup later this year, and Glastonbury music festivals among many others.

In Vancouver, the stadium at the opening ceremony required the support of five units, each reckoned sufficient to power a 100-room hotel.

But Aggreko may grab the headlines by other means, if it's right in an unusually open assessment about the way ahead for the energy market. The highlights:

It estimates the compound rate of growth in global demand for electricity will be around 4% per year, while the growth in capacity will be around 3%. By 2015, that leaves a gap growing each year by 50,000 megawatts (as a guideline, Scotland's demand is around 6,000 megawatts).

That gap is likely to be widest in emerging markets, by which they mean developing countries. But there's a significant gap opening up for developed economies too.

They suffer from the twin problems of ageing power stations, with insufficient planned replacement, and the need to shift to low-carbon generation.


Breaking bow wave


The scale of the problem is shown by Aggreko's reckoning that between 2000 and 2007, the amount of generating capacity outside China that was over 40 years old more than doubled, and yet the amount of new capacity being commissioned outside China fell sharply. By 2015, more than quarter of the world's generating capacity (again, outside China) will be more than 40 years old.

"We believe the developed world is building up a bow wave of delayed investment that, sometime in the next ten years, will have to break," says the power company. "The most immediate effect of the wave breaking will likely be rapid inflation in the building costs of new plant as plant operators rush to order the plans that should be in construction."

With a sceptical eye on wind power, it quotes figures from Ireland's 900 megawatts of installed capacity. In the first quarter of last year, there were 12 occasions when power output varied by more than 100 megawatts within 15 minutes, and 76 occasions when that happened within 30 minutes.

Peak output was 940 megawatts, but when the wind drops, it's down to nine megawatts. And in winter, the wind drops most when it gets coldest, and demand is highest - as indeed, it's been doing this winter as well.


Confiscation


To policy-makers, that's the headache of providing baseload when the wind drops. To Aggreko, it has the sound of a loud 'ker-ching'.

It reckons conventional power plants, whether gas, hydro or nuclear, will struggle to justify capital costs when they are intended for intermittent use. So the company is offering its multi-fuel generators, which can be powered up within 30 seconds. And coming in one megawatt blocks, it can be picked up and moved to where it's needed within a couple of days.

The plan is to be ready for this new market emerging from around 2015.

Meanwhile, the many markets in which Aggreko operates brings with it at least one risk - its equipment being confiscated. That's happened on two occasions in the past three years over tax and import duty disputes.

Comments

  • Comment number 1.

    Smaller and local would seem the best response - easier to maintain, easier to spot problems, easier to fix. Perhaps a system unique to each locale is what is required - wind power where there's wind, solar power where there's ample sunlight, etc.
    The foregoing idea is meant to offset the gap in power generation that is foreseen by Glaskow's Aggreko. We have to get homes, small businesses, etc off the major power grids so that hospitals and other large establishments will have sufficient power.
    In fact, I’ve often thought that building designers/archtects should be designing and constructing homes & buildings that are totally energy sufficient – solar panels, wind power, roof greenery, partially built into hillsides or the earth (for warmth), stones to radiate heat and cold. Designers/architects should have lots of ideas and should be doing a lot more. The Government should stipulate that new homes/buildings must be (I don't know what's feasible, maybe) 50% self-sufficient.
    The answer cannot lie in building more and more power stations, which takes time and which is a high maintenance proposition. Most certainly nuclear power stations are not the answer - unless your country is prepared to accept its own nuclear waste and somehow (not bury it but) neutralize it.
    The scale of the problem as Aggreko reckons: plants over 40 years old more than doubled. By 2015, more than quarter of the world's generating capacity; so now is the time to plan how this vacuum will be filled...before the world goes dark, grid by power grid.
    As far as wind power fluctuation - we store electricity, don't we? So why can’t we store store windpower?
    Obviously I don’t have all the answers, but there are companies now that are trying to design and construct energy self-sufficient homes and edifices that are in addition, ecofriendly. Perhaps we should get these guys together and see what they can plan for the future.

  • Comment number 2.

    Ah, the elephant in the room. Without a massive growth in energy storage facilities (e.g. pumped hydro) or a continental-scale HVDC grid, wind and solar are scams, and actually a burden on national grids and the poor technicians who have to try and keep them load and phase balanced.

    The question to ask proponents of renewables isn't "How much power do they generate?" but "How much does fossil and nuclear fuel use dropped when renewable energy is being generated?"

    The answer - and good luck getting any admission of this from the people who have bet the planet on it - is: little to none, since steam turbine plants still need be kept hot at all times to meet sudden drops in supply from wind and solar.

    Renewables are a piece of the puzzle, but at the moment are makign the problem worse, not better. We need politicians who are interested in asking the right questions rather than throwing tax money at the first snake oil salesmen to promise them thousands of local jobs for local workers.

  • Comment number 3.

    Rogerborg - still trotting out those tired old myths about wind power having to have thermal generators "spinning on standby" "in case the wind drops"

    Absolute rubbish - 200 studies reviews by the UKERC back in 2006 put that one to bed, but you guys still trot it out time and time again.

    Big Thermal plants, especially Nuclear - drop off the grid with monotonous regularity, when there is a technical problem, but still the grid survives. Wind power is predictable, and there is such things as weather forecasts........

    And off shore wind - especially around Scotland - is pretty efficient, with the two demonstrator 5MW turbines in Moray Firth operating at over 70% efficiency (and I can see them from my window, and they spin even on the most windless cold days here on the Caithness Mainland). So tie in the six gigawatt of offshore planned for Scotland in the next eight years, with the two new major pump storage schemes the SSE are planning for the Great Glen, and off-shore wind becomes the new base load!

    Off-shore wind promises Scotland two things - a construction and fabrication boom similar to oil and gas back in the 70's, and clean, reliable, carbon free electricity.

    Not that I've anything against Nuclear - I live and work in Caithness - but I'd rather invest in Scottish firms to build a new industry, than buy French reactors to perpetuate an nuclear industry with at best an unsure - and uncosted - future.


  • Comment number 4.

    #3

    Ho ho ho..... There will be no offshore wind boom in Scotland. The Westminster Govt and their chums in the financial services sector let us all down again and weren't interested in investing in wind technology. So it will be all be coming from overseas and that includes the ships to put them in....

  • Comment number 5.

    As a nation as a whole we cannot let energy deficiency ruin what economy we have left. I for one would like to see a national energy plan combining Wind, wave, solar, and new clean coal and oil powered carbon capture plants. So that when mother nature lets us down Ie storms or alternatively low wind levels etc (which hopefully we can have forcasted) we can carry base load using hydro and cleaner carbon based energy technologies. Im not a fan of nuclear as I believe the question of waste and decomissioning is still not costed or secure in any environmental way. However a number of independant Energy surveys have suggested that as world growth increases, demand for oil will over take production in the next 5-10 years. China are targeting growth rates this year alone of 8%. Nothing Scotland can do can change this but we must be ready for the huge increase in oil prices in the future. So what is a reasonable solution given the prospect of 200$ per barrel of oil in 2017.
    We need to combine all reasonable technologies, Which could mean at least two mid sized nuclear power stations located between the larger population centeres to reduce waste in energy transport. One between glasgow and Edinburgh and one between dundee and aberdeen. This combined with wind, wave, Hydro,and Carbon fueled power stations should be able to secure energy production throughout scotland with reduced amounts of nuclear waste as they would be run on minimal levels until demand depending on weather conditions. Like I said before not Ideal to have nuclear but unless we can find a cheaper way than oil based generation I have serious doubts about scotlands future energy supply.

    Its an interesting time !

  • Comment number 6.

    I have no qualification in energy studies but there appears to me to be something fundamental missing from all the above comments, and that is addressing the demand for energy. The human race likes to learn the hard way and will consume any resource to the brink of exhaustion unless rigid controls are put in place. The arguments of large-scale power plants against more sustainable generators will surely become clearer as the contribution data of more wind & wave projects become available, but we need to be careful of so-called "expert advisers" who are paid by those with vested interests. The answers of production probably lie somewhere in between large and small scale plants, and it's a mixture of resources which I think will provide the most robust supply. Scotland is indeed uniquely placed to harvest renewable resources and it makes sense to invest as much as we can in wind, wave & hydro schemes, backed up by coal, gas & nuclear. But coal, gas & uranium are finite (I wouldn't like to be living in France when uranium supplies run out) and this is where I find it strange that there seems to be a lemming-like attitude to the use of power. Take television as but one example - how much energy does it take to produce and broadcast a major tv show (eg The X-Factor) and the thousands of shows like that made round the world every year? Or the Olympic Games? I could go on, but you get my drift - I think it's high time we started to include arguments about whether we want power to heat our homes & cook our food and get us to work, or to provide us with inconsequential entertainment when we talk about energy. Maybe entertainments like films, tv, & pop videos should carry an energy rating like appliances do. I've no axe to grind against the entertainment industry as such, I'm just using it as an example, but if energy is going to be in shorter supply, where and when are we going to start making the savings? We need our politicians to grasp the nettle but there's not much chance of any leadership or common sense from them.

  • Comment number 7.

    The truth is that oil and gas are simply the most efficient sources of power we have right now. Renewables are good in the abstract but are far too unreliable to be taken seriously as an alternative to nuclear. The real fear is that successive governments have allowed nimbyism and a reflexive pandering to environmental groups to stymie development of a proper network of nuclear power until we are on the very cusp of the lights going out. And so whoever is in power next time round is going to be faced with the unpopular reality of trying to find billions of pounds at very short notice to build nuclear power stations in the teeth of uneducated protests. Ridiculous!

    That said, I can't be alone in seeing an irony in .

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