As the terrible tragedies in Japan unfold, the share price of renewable energy firms rises, while that of nuclear firms drops. What will be the long term impact of the events in Japan on the nuclear industry? No one knows. It’s hard to see western countries maintaining their current standard of living without nuclear power, but the nuclear option, already politically unpopular, looks even less appealing now.
The world’s second largest producer of oil, with a little under 10million barrels per day, is Russia. The politics of Russian oil is complex, and is best illustrated by a short story.
Last week Bob Dudley, the newly appointed boss of BP ( his predecessor Tony Hayward resigned after the Deepwater Horizon disaster) shook hands with Russian Prime Minister Vladimir Putin. They agreed a $16bn deal for in a joint venture between BP and Rosneft, Russia’s state controlled oil company, to develop Russia’s arctic oilfields. From a business perspective, the deal makes sense: Russia gains access to BP’s skills, and BP gains access to some unexplored oilfields. Politically, it’s more interesting. Before he became head of BP, Bob Dudley was head of a Russian joint venture called TNK-BP, and actually fled from Moscow in 2008 in fear of his life when it was intimated that he’s upset some of his Russian business partners. Dudley is still unpopular with the oligarchs who run TNK; they claim that BP has no right to do a deal with anyone else in Russia. Presumably he feels he’s safe now he’s got Vladimir Putin and the Kremlin on his side. Rosneft’s main assets used to belong to a company called Yukos, owned by another oligarch called Mikhail Khordorkovsky. Some years ago, Khordorkovsky and Putin fell out: Khordokovsky is now in jail and the assets of his firm were acquired at a knock down price by Rosneft, via a mysterious company registered at the address of a vodka bar in Tver, a small town north of Moscow.
This is what it’s like in the oil business in Russia.
The world’s largest consumer of energy? China (the United States remains the largest consumer of energy per person, by quite a long way, but in absolute terms it’s China)
The world’s biggest producer of oil? No longer Saudi Arabia, and certainly not the United States – it’s Russia.
Until now, most Russian pipelines had transported oil westward towards Europe. Today, for the first time, oil starts flowing through pipes eastwards. The pipeline will supply China with 300,000 barrels of oil a day.
The balance of power has shifted.
One of the reasons we need so many power stations in the UK is that we must always have enough power to meet peak demand – even if that demand lasts only a few minutes. Click here to see the kind of pressure the UK national grid comes under when East Enders finishes and 1.75m people put on their kettles.
Smart grids could change all that. If domestic appliances could switch themselves off and on according to the nationwide demand for electricity, and if the grid could draw more power from small scale renewables, and sometimes even from the batteries in electric cars, we could get by with fewer big power plants. That’s why smart grids are being piloted in Liverpool, Leeds and the North East.
The world’s largest offshore windfarm opened today off the coast of Kent. The 100 turbine, £740m project will provide 300mW of power to the grid, bringing Britain’s total wind capacity to around 5GW – about the power produced by five medium sized coal or nuclear power stations. Swedish company Vattenfall, which operates the facility, can expect at least £30m a year in government subsidies, in addition to the money it makes from selling the electricity.
Less than 2% of the UK’s energy is from renewable sources: more than 80% of Iceland’s is. To be fair, Iceland has two significant advantages over Britain: it’s small – with a population of only 320,000 its total energy consumption is just 1% that of Britain’s; and it is situated on one of the most tectonically active places in the world, which means there are plenty of hot springs and active volcanoes (like, Eyjafjallajökull which caused disruption to European airspace in the summer of 2010)
The hot springs are a great source of geothermal energy, which Icelanders use to heat homes and offices, and to generate electricity. With abundant hydroelectric power, Iceland would be close to being self sufficient in energy and carbon neutral if it weren’t for the oil needed to fuel cars and trucks. The country is working on this though, by developing a hydrogen fuelled transport system. The hydrogen is produced by electrolysis powered by geothermals.
Until recently geothermal was thought to be practicable only in places like Iceland where the geology allows hot steam to rise near the surface, but a newish technology called Hot Dry Rock (HDR) may allow geothermal power to be accessed anywhere. In essence, if you drill a hole deep enough (around 3 – 5 km down) you get to rocks hot enough to boil steam to drive a turbine in a power station. At the moment this is technically very difficult and the resulting energy very expensive. But more than 50 companies worldwide are working on making it easier and cheaper to extract this heat from the earth’s core. As the cost of conventional fuels rises, and governments become keener to promote renewables, the time may come when geothermal can be added to the mix of wind, water, solar and biomass as a feasible source of renewable energy.
The world currently uses 85m barrels of oil a day, and we have to get it from somewhere.
The easiest and cheapest way is to drill for it on land. Most of the world’s oil still comes from oilfields below land, principally in the Middle East. If you run out of land based oil, you can start to drill offshore. Offshore production is a lot more expensive than on land, but worth it if prices are high enough. That’s why offshore drilling in shallow waters began in earnest after the oil price shocks of the early seventies. Offshore drilling in the relatively shallow waters of places like the North Sea is tough enough, but nothing like the challenge of extracting oil form deep waters like the Gulf of Mexico. BP’s Deepwater Horizon rig was designed to extract oil from more than two miles below the sea bed using a rig floating a mile above it. By any standards this was a difficult, dangerous and expensive undertaking. Since the rig failed on 20th April, killing 11 of her crew and sending 3m barrels of oil into the sea, the costs have risen dramatically. BP had agreed to put $20bn into a fund to pay for damages and lost earnings; $100m into a fund to compensate oil rig workers affected by the suspension of normal operations; and may face another $17bn or so in fines.
Whether this accident turns out to be the of 9/11 of energy, as President Obama predicts, is not yet clear, but one thing’s for sure – the price of oil is going to be increasing substantially for the foreseeable future.
Will this mean that it continues to be profitable to extract oil not only from deep water but using other expensive methods like oil shales and tar sands? Or that we start to rein back on oil in favour of cheaper sources of energy? Time will tell.
One of the key environmental commitments of the UK’s new coalition government is to implement a smart electricity grid. But what exactly is a smart grid?
A small power station
Our present electricity grid is pretty stupid in at least two significant ways. Firstly it regulates supply, but not demand. Since demand fluctuates wildly day by day and week by week, we need quite a few power stations idle for much of the time, but ready to come on line at very short notice. Secondly, the electricity flows only one way – from big, inefficient power stations to end users.
A smart grid addresses these problems. A smart grid regulates demand as well as supply: here’s how. Instead of the price of electricity being fixed for long periods of time, the price varies second by second in line with demand. This information would be sent down the cables with the electricity itself. When electricity happens to be very expensive, some devices, like fridges or battery rechargers would turn themselves off for a bit until the price fell or they really needed to be on. Other devices such washing machines would wait for cheap electricity before turning themselves on at all.
Secondly, electricity would flow both ways. When you plug in your electric car to recharge, it would generally be drawing power from the grid. But if there were a sudden demand for power, you might want to sell the power in your car’s batteries back to the grid. You’d be happy because your car would be buying electricity when it was cheap, and selling it when it was expensive. The power generation companies would be happy because you’d be providing them with the infrastructure to deal with peak demand, instead of their having to build extra power stations to cope with such surges.
When will we have a smart grid in the UK? This is where the government is a bit vague. But if we don’t do something soon to reduce demand or increase supply we’re going to run short of electricity in the UK by the end of this decade.
This graph first appeared in a report to the UK House of Lords Economic Affairs committee, published in 2008. It shows that peak demand for electricity in the UK will exceed supply sometime in 2015.
The main reason for this is that a number of coal fired power stations – including Drax, which supplies 7%of the UK’s total electricity – will have to close as they fail to comply with EU emissions regulation due to come into force in 2016.
However, thanks to some recent wheeling and dealing by the power companies and the British government, the EU has now agreed to give the UK a further three years grace before enforcing the regulations. We now won’t run out of power until 2019 – unless significant new sources of nuclear and renewable energy come on stream by then.
As the UK general election campaign draws to a close in its own inimitable way, all three main parties are committed to reducing CO2 emissions and promoting a low carbon economy. One policy difference between the Liberal Democrats and the other two involve nuclear power. The Lib Dems are against it; the Tories and Labour are all for it. Who’s right?
The three arguments against nuclear power are that it’s expensive, dangerous and unnecessary. Taking each issue in turn:
One nuclear power station costs about £3bn and delivers about 1GW of power. An offshore windfarm delivering the same amount of power would cost about £6bn.
Since the Chernobyl accident in 1986 there have been 443 nuclear power stations producing 16% of the entire world’s electricity with no significant accidents. The World Health Organisation estimates that a total of 4000 people will eventually die prematurely as a result of the Chernobyl disaster. While this is a terrible toll, it is less than the 4000 miners who die every year in Chinese coal mines, or 24,000 people who die every year as a result of pollution from coal fired power stations.
We could generate all the electricity we need in the UK from wind – if we were prepared to cover an area the size of Wales with windmills. If not, we’re going to need an alternative source, and that’s probably going to be nuclear. For a well informed discussion on how the numbers for electricity generation add up, and why nuclear is probably going to be part of the mix, see David MacKay’s excellent book and website Sustainable Energy without the Hot Air.