Securing Energy Supply (1)

When it comes to energy policy-making in the 21st Century, for most developed economies it is built around a 'triad' comprising these elements:

• environmental - reducing the detrimental impact of obtaining usable energy
• economic - delivering 'affordable' energy
• security of supply - delivering energy reliably
  

To state them as briefly as this is to skate lightly over huge complexities, but let us accept that we broadly know what is intended.

Attempts are constantly made to reconcile the three strands, since it is hard to see they can all be delivered at the same time - an issue sometimes referred to as the 'Energy Trilemma'.  We can have cheap, secure energy, but living near a 1970's vintage lignite-fuelled power station degrades and shortens your life.  We can have secure, low-carbon energy, but at tremendous cost.  We can have cheap, low-carbon energy but it may very well not be there when we need it.  The EU's official energy policy claims to square the circle (if a triad can do such a thing) - "fully balanced, integrated and mutually reinforced", claims the EC: but its reasoning is akin to that of the medieval schoolmen and the results not convincing at all.

(Charmingly, they have official nicknames for each leg of the policy triad - see the diagram: the environmental is called 'Kyoto' for obvious reasons; the economic is tagged 'Lisbon', after the conference and treaty of the same name that were intended to deliver competitiveness to the EU in every sphere; and the security moniker is 'Moscow' ... I wonder why ...)

Source:  European Commission

In this and following posts we focus on security, and consider mainly gas and electricity with some comments on oil.  There are two primary aspects: strategic security, against politically-motivated shortages; and day-to-day reliability.

Reliability was until recently not a matter that greatly exercised policy-makers in advanced economies.  Indeed, the enormous fundamental difficulties of continuously (and safely) supplying electricity, gas and oil had been so comprehensively solved, many had forgotten what an achievement it was.  Permanent access on demand to these three commodities - electricity in particular - has become essential to everyday existence, to the point where we cannot really countenance its interruption beyond the shortest of periods.

And permanent access is what we had become accustomed to, often forgetting that continuous supply of a commodity that is subject to all manner of complex contingencies, is a major practical challenge.  This challenge becomes all the greater when the commodity cannot readily be stored.  Compared to the relatively straightforward storage of (e.g.) coal or oil, the difficulty of storing natural gas is great; and of storing electricity very great indeed, almost to the point where we might say it cannot be stored (except in trivial quantities) unless one has access to large-scale hydro-electricity with pumped-water reservoirs - a privilege enjoyed by rather few of world's population.  But the engineers and markets are equal to the task, and the lights stay on.

If these problems have been so impressively solved, how then do we come to talk of reliability in the past tense ?  The new factor is wind-generated power, imposed on electricity systems by politicians responding (as they would see it) to lobbying by 'greens' for 'decarbonisation' of electricity in general, and by turbine manufacturers for wind turbines in particular.  We can fairly say 'imposed' because in almost every instance wind turbines cannot be justified economically per se (without recourse to a highly disputable case based on 'future avoided costs of CO2 emissions'), and thus only exist when installed by fiat and/or developers in receipt of large subsidies.

The characteristic feature of wind-power is 'intermittency', illustrated by the dismal long-term average output from windfarms which in most installations struggles to achieve 25% of its rated (notional) capacity.  If this 25% came in a predictable pattern - as, for example, does the equally low-performing solar power, which always peaks at midday - it could be accommodated fairly readily in a large electricity system.  However, in practice the pattern is near-random, with forward predictability of a few hours at best.

Yet electricity systems must be balanced continuously, and intermittent input in more than de minimis quantities is a challenge, growing ever greater as the amount of wind-power to be accommodated expands.  We considered the consequences of this in the two specific cases of Denmark and Germany in an earlier series of posts.  Summarising: through a combination of good engineering, access to hydro-electricity (in the case of Denmark), and throwing large amounts of money at the problem, to date these two countries have succeeded in accommodating large wind-generation sectors - but, in the case of Germany, only just.  Indeed, it is possible that Germany may be about to demonstrate dramatically the boundaries of what is feasible as regards wind-power: and it will be at levels of wind capacity a lot lower than many greens have hoped and promoted.

In any country or grid-region which must accommodate wind-power without having ready access to hydro, this serious challenge to reliability will persist until cheap and efficient power storage becomes a reality.  Such storage is as eagerly sought as any Holy Grail, but as yet is beyond us.  Thus, as the wind fetish shows little sign of abating in the corridors of power, reliability will become an ever-greater problem in electricity supply.  In some regional systems this might have knock-on consequences for gas reliability, if gas-fired power plant is called upon to meet ever more extreme wind-driven electricity-system balancing duties; but, by and large, gas grid operators (having at least some storage capability) have proven a match for this challenge and as yet, fears over gas security predominantly stem from strategic considerations.

It is to the strategic issues of energy security threatened by political factors that we turn next. 

[Continue to Part 2]

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