The Economist on Britain’s Electricity Situation

The Economist recently wrote an editorial called “How Long Till the Lights Go Out?” describing the electricity situation in Britain. The byline was

Thanks to its posturing politicians, Britain will soon start to run out of electricity. What should it do?

As a long time writer on electricity and energy, I was pleased that The Economist at least hit on the core of the issue:

In 2009 Britain’s electricity demand peaked at 59 GW. Just over 45% of that came from power plants fuelled by gas from the North Sea. A further 35% or so came from coal, less than 15% from nuclear power and the rest from a hotch-potch of other sources. By 2015, assuming that modest economic growth resumes, a reasonable guess is that Britain will need around 64 GW… where will that come from?

This is the HEART of the issue. Electricity has to be generated from somewhere, and traditional sources of generation are 1) Coal 2) Gas 3) Nuclear 4) Hydroelectric 5) everything else (generally insignificant).

For environmental reasons, no new hydroelectric will be sited anywhere in a Western country of any significance ever – due to the fact that this floods areas and alters streams and rivers – it just isn’t happening.

There won’t be any significant new capacity coming on for nuclear power in any Western country – don’t let the press releases fool you – and the current capacity is getting old and winding down.

Coal has a bad environmental rap and it is hard to imagine any new coal plants being built in any Western countries (but they are throwing them up as fast as they can in China, and since we all have the same atmosphere, what is the difference? But that is grist for another post).

Thus you are essentially down to natural gas. The economy of Britain has been floated by the fact that the UK has north sea resources so this can be tapped and used to fuel power plants without causing adverse effects on national finances (since Britain can tax the natural gas and the money flows within the country as opposed to going overseas to dubious regimes, although in this case it would be Norway).

After hitting the nail right on the head by focusing on generation as the true issue, then The Economist opens up on what is likely to occur next, which is the deterioration of service, as in “when the lights go out”. The longer companion piece to the editorial discusses South Africa, where frequent blackouts left home owners security systems down leading to criminal attacks until a crash building scheme alleviated the issue. This is what is also occurring today in London and parts of the United States, as a lack of generation results in more frequent blackouts, outages and power curtailments that are only going to get worse as the fleet ages and there is nothing in the pipeline to replace the equipment.

There are three issues that The Economist doesn’t hit hard enough:

1) the fact that when the UK and the US rely heavily on natural gas, and the gas isn’t sourced locally within the borders, this will start to significantly erode the public finances of the our countries the same way sending large amounts of dollars for gas and oil (mainly to Arab countries, dictatorships like Nigeria and Venezuela, and also Russia) has done, while propping up many of the most odious and troublesome governments. We easily have the ability to source power within our borders using local fuel if we use other sources, such as coal, or use a modest amount of natural gas
2) even if you are a big believer in environmental issues, “pinching” the US and British economies by starving it of reasonably priced and reliable electricity does nothing in the grander scheme to slow global warming because China is adding 100 GW / year of power capacity, 2/3 of which is coal fired (with little environmental equipment, by Western standards), as much as the entire generating capacity of Britain. It is like we are focusing on a match in the corner while an entire forest burns over to our right, completely pointless
3) businesses are being hit by the unreliability of generation today, in that they have to buy expensive backup capacity and make many other decisions based on the fact that electricity is unreliable and the situation is about to get significantly worse in the future. Plants / buildings / data centers are planned based upon the availability of power, which is mostly an historical artifact of decisions made decades ago or lack of residential growth in a specific area, and this is distorting to our economy
4) China is building a powerhouse economy, powered by cheap and reliable electricity, while we are starving ours of power and investing little or nothing in base load capacity. This may not be a good omen for the future. Western pushing on human rights recently gained nothing in Tibet, where China cracked down with impunity (sorry, Beastie Boys, those sit-ins didn’t do the trick)

Cross posted at LITGM

13 thoughts on “The Economist on Britain’s Electricity Situation”

  1. The Economist is solidly in the Global Warmenist camp and this affects their analysis. Funny to see a magazine that used to be fairly pro-capitalist now stating ‘Companies must be cajoled or bribed into building gas storage’.

    Excessive regulations have made it almost impossible to expand generation capacity and there is the ever present threat of additional carbon taxes. Power companies seem to have realized this and are willing to stick to their second best alternative: reap increasing profits from their existing facilities as electricity becomes scarce.

    As the currently very popular quote puts it: “If something can’t go on forever, it won’t.”. My hope & expectation is that the East block EU members will be the first to value prosperity over ‘Climate Change’ and start building capacity, probably with an eye on exporting power to the West. Poland seems to make some noises in that direction and is preparing to build a nuclear power plant:

  2. Nothing the current generation of leftists are doing will do more lasting damage than their war on electricity. An advance economy is basically a means of using electricity to turn dirt into useful things. Without electricity, we’re materially poor and powerless.

    Of course, they don’t see themselves as crippling us. As always, leftists are according their fantasies as much validity as proven reality. They believe that their fantasies about “alternative” power are every bit as proven and practical as “non-alternative” power.

  3. Point of order: That’s not actually a ‘byline’. Rather, it’s a ‘subhead’. ‘Byline’ indicates by whom a piece was written. Economist is famous for never using bylines other than pseudonymously.

  4. The French have a lot of nuclear plants and do not share the U.K.’s (and Germany’s) aversion to nuclear power. They could build more plants and sell the electricity to Germany and the U.K. for a handsome profit, of course.

    Can transmission lines be run underneath the English Channel? If not, I guess the U.K. is SOL.

  5. Speaking of the U.K., my impression is that the U.K.’s white working class is about as dysfunctional as the black underclass we have here in the U.S. and that it is actually a majority of the U.K.’s population. And I hear that Scotland’s even worse. If this is true, energy generation is a fairly minor problem in comparison.

    Can anyone from the U.K. comment on this?

  6. Richard North at EU Referendum, on the blogroll here, has been pounding away at the point,for years and been ignored for his troubles. The culture there has gone bad. It’s not just the working class-the political/ chattering class is every bit as stupid and worthless. This won’t end well

    The Economist-for them Economics is an intellectual game,but nothing sensible follows because basically,they are as gutless as the rest of the commentariat there. Not surprisingly they endosed Obama. THAT gives it all away.

  7. Duh I meant 4 items not 3… like I said over at LITGM it is like the Monty Python sketch r/e “The Spanish Inquisition”

    If anyone is interested in power and electricity here I have a bunch of articles under energy and power generation on this site and many over at too (where I have been talking about it for much longer).

    No one listening, though. Sigh.

  8. I am sanguine. There is lots of natural gas in the US, and Americans are rich and can afford their own generators. I have an extra garage bay and could buy a diesel generator for it. This does nothing to help the environment, but that is not my problem.

  9. One minor quibble, the US is fairly secure in it’s NatGas position. The great majority of our gas comes from domestic sources and a few huge new fields have been opened up by new drilling tech. Of the stuff we import, I think around 80-90% comes from Canada.

    Otherwise, I echo your call to the wilderness in terms of generation. I was never for the stimulus, but when it was first proposed I thought, “Here’s Obama’s chance to do something big and building a grid like the Interstate system and ramping of new generating plants would be one way to do it.” Unfortunately (and really unsurprisingly), we got what we got and we are where we are.

  10. Ah… natural gas. I have been involved in this industry for 20+ years… long enough to remember when we stopped natural gas hookups for housing across the country due to a natural gas shortage.

    The issue is that as we move towards more and more natural gas we unbalance the US heating market and we have put much of the natural gas drilling areas off limits. Recent price hikes have increased drilling but this will probably fade away as prices fall.

    In general, natural gas should be part of the US fuel solution, but to make us overly dependent on it is a mistake. Agreed that we have lots of resources and import from Canada.

  11. Agreed on the need to not be overly dependent on it, particularly since even though we supply mostly the domestic market, it’s still subject to price pressures from the outside market (I think).

    You’d be interested to know I used to work for a guy who’s 81 year old father (who still came into the office) started a heating oil distribution company back in the 40’s and sold it when he saw the gas writing on the wall.

  12. It seems like Sarah Palin has made a major contribution to the energy problem in the United States, with her natural gas pipeline from Alaska to the lower 48 states.

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