Electricity System Resilience (S&T Committee Report)

Lord Rees of Ludlow Excerpts

Tuesday 3rd November 2015 Lords Chamber

[Lord Rees of Ludlow (CB)]

My Lords, it was a privilege to serve under the noble Earl, Lord Selborne, in preparing this report, which highlights the narrowing gap between supply and potential demand. Further decommissionings in the last few months have surely sharpened these concerns.

We talk about keeping the lights on, but if there is a power cut, the blackout of lights is by no means the worst downside. IT systems, the infrastructure of cities, the habitability of high buildings all depend on electric power. Rather than multiplying the number of emergency diesel generators, at great expense and no little environmental damage, it is surely prudent to prioritise an enhanced safety margin in our primary generating capacity.

Moreover, although National Grid’s methodology is careful and transparent, it underweights the most devastating risks, about which the noble Lord, Lord Harris, has just been curdling our blood. When crises arise, there can be a knock-on effect, where a malfunction, either mechanical or cyber, cascades through the system. The Cambridge Judge Business School, in collaboration with Lloyds, recently explored a hypothetical scenario of this kind in the eastern United States, claiming that economic damage could run into hundreds of billions of dollars. So I think we should be prepared to pay a higher insurance premium, as it were. This clearly requires a change in the regulations and incentives to ensure that fossil fuel stations are not decommissioned prematurely.

The downside of gaining this extra security would, of course, be to raise our CO₂ emissions in the short run. Indeed, the most plausible projections towards 2050 envisage continued substantial dependence on gas-powered stations, but the hope, of course, has been to fit them with carbon capture and storage—CCS. However, the construction of CCS demonstration plants worldwide, especially in the UK, is lagging compared to what we had envisaged five years ago. Even if a demonstration project works, can we be optimistic that the technical, legal and environmental hurdles will be surmounted on a scale that allows widespread deployment, even by 2050? I wouldn’t bet on it.

If we are serious about achieving 80% reductions in CO₂ emissions by 2050, as mandated by the Climate Change Act, then diminishing optimism about CCS means that nuclear power must be a bigger part of the mix. Indeed, DECC projections indicate that 30 or 40 gigawatts of nuclear power may be required—far more than current plans envisage.

According to recent statements from EDF, the operators of Hinkley, it should be on stream by the end of 2023, but few consider this credible. There may be legal challenges within the EU to be dealt with first; it might in any case be prudent to wait until at least one of the comparable EPRs now under construction, in France and Finland, have been completed. They are both famously billions over budget and years behind schedule. Realistically, Hinkley cannot be on stream before 2025, and if it suffers even a fraction of the delays of its two precursors, this date could slip towards 2030. It is not clear whether the lifetimes of existing power stations can be extended that long, nor that Bradwell could be constructed by then. Even if we are optimistic about the growth of renewables, nuclear cannot provide all the balance so there will be a gap that would surely have to be met by gas, without CCS.

Let us look further ahead. Decisions we make today will resonate well beyond 2050 and on that longer timescale there are prospects, even in the nuclear arena, that could lead to more economical and flexible baseload generators. There is no other high-tech area where one would be satisfied with 30 year-old designs. This was emphasised in a short debate last month initiated by the noble Viscount, Lord Ridley.

Can we seize these opportunities? In an earlier report in 2011, the Science and Technology Committee discussed the nuclear industry, revealing a depressing picture. We have lost expertise in fields where the UK was once a world leader. That is why new nuclear reactors will be state-owned, but by the French or Chinese state and not by us. That is why we do not have the indigenous expertise to be major players in the development of fourth generation nuclear reactors.

We should surely aspire to spearhead some of the developments, especially when we are budgeting £80 billion over the next few decades to decommission Sellafield’s dreadful legacy of nuclear waste. From that perspective, it is anomalous that the National Nuclear Laboratory cannot spend more than the current few tens of millions per year on R&D.

Looking beyond 2050, there are exciting prospects for renewables. Although wind, tides, geothermal and bio have contributions to make, my prime long-term bet would be Europe-wide large-scale solar energy generation. We would need DC grids, which are transcontinental, carrying solar energy from north Africa and Spain to the less sunny northern Europe, and east-west to smooth peak demand over different time zones.

Moreover, if solar or, indeed, wind is to become a dominant source of energy, it must be capable of being stored, and supplied when and where it is needed. There is already a big worldwide investment in improving batteries. An exciting potential breakthrough in lithium air batteries was intimated just last week in an important paper from Professor Clare Grey and her Cambridge colleagues. There are also other possibilities, including thermal storage, capacitors, compressed air, fuel pumps, flywheels, molten salt, pumped hydro and hydrogen.

This is an arena where public and commercial efforts need to mesh together. The forthcoming Paris conference offers an opportunity to encourage nations to expand and co-ordinate their publicly funded R&D into clean energy, especially solar power, storage techniques and the design of smart grids. I would add fourth generation fission and, indeed, fusion into the mix. At the moment, only 2% of publicly funded R&D is in clean energy. Why should energy research not be comparable to spending on medical or defence research, higher than it now is?

This welcome and timely debate has focused on the short-term resilience of the electricity on which our lives depend. It is a wake-up call, a reminder that we need a long planning horizon. Our present anxieties are a legacy of decisions dating back decades. Likewise, decisions made today will resonate to 2050 and beyond, so let us hope that we get them right.