It’s a Gas Gas Gas
A few days ago I tweeted the surprising news from the UK Government’s Digest of UK Energy Statistics that the load factor for wind power exceeded that of gas power stations in 2012. In fact, I was wrong. The statistic was about offshore wind power, whose load factor of 33.7% was somewhat above the four-year average of 32.9%. Bringing onshore wind’s lower load factor of 25.6% into the mix made wind’s overall load factor 28.0%. Not that load factor is a big deal for wind because in any case you’d never expect it to be operating at very high figures. The wind doesn’t blow perfectly for wind generation all the time.
But load factor is an important factor for conventional power plants. Here’s a graph showing the load factor of gas and coal plant in the UK from 2008 to 2012.
Several factors affect the load factor. Scheduled maintenance of facilities means that no facility will ever operate at 100% load factor. We also need to consider unscheduled maintenance – the result of mechanical failure, breakdown and human error. But those factors cannot possibly explain the cataclysmic reduction in load factor for gas – now well under half of its load factor just four years previously.
Which brings us to the economics. Electricity generation companies will use their most economically favourable plants first, all things being equal. That means that renewables get priority because their fuel costs are nil. Then the companies will look for the fuel that provides the best return on investment. Coal-fired power stations take a while to start generating, which is why gas-fired stations haven’t fared worse: gas-fired stations can start operating very rapidly to provide electricity when it’s needed at short notice. When it’s needed at short notice it’s expensive, which is why in 2012 it was profitable to operate gas powered stations at all, given the low cost of coal.
But the low cost of coal has cannibalised the operating hours of gas-fired power stations. What we’re looking at in the graph above is proof that gas-fired power stations have been sitting idle for more than 50% of the time in 2012. That’s a big headache for companies that have invested, in some cases, billions of pounds in new gas-fired generating plant.
It’s a story that ties in the shale gas revolution in the USA, because the Tyndall Centre for Climate Change Research has shown that low gas prices in the USA have led to huge surplus coal stocks there, which have brought down coal prices worldwide making it the cheapest generating fuel.
The surge in coal-fired generation can’t last, however. The Large Combustion Plants Directive places a limit on the number of operating hours for high-emitting plants that are destined for closure by the end of 2015. Plants due to close total 8.7 GW of coal-fired stations and 3.6 GW of oil-fired stations, none of which is in Wales. The coal-fired stations slated for closure represent 38% of total UK capacity of such stations; 100% of the oil-fired power stations will close.
So operators of gas-fired power stations simply need to hold their breath until 1 January 2016 at which point an additional 38% of coal-fired capacity will be made available, ready to be catered for by gas. Phew!
But there’s something that’ll be niggling at the back of their minds. The graph below shows the generation profile of different types of generators, again from 2008 to 2012 inclusive.
I’ve already mentioned that with zero fuel costs, renewable generation will be the preference for electricity generating companies. How much of the ‘retired’ coal-fired generation will be consumed by increased renewable generation?
If we go on the basis of a proportionate increase in generation over the past five years being mirrored in future years, we get the results below.
, 2008, 2009, 2010, 2011, 2012, 2013, 2014, 2015
Renewable generation (GW), 6.8, 8.0, 9.2, 12.3, 15.5, 17.7, 19.9, 22.1
So between 2013 and 2015 inclusive we can expect to see a further development of 6.6 GW of renewable energy, assuming no acceleration in installation (and David Clubb has already described the rate of renewables installations as ‘picking up’). So new renewables will have gobbled up more than three-quarters of the coal-fired capacity that will be retired by the end of 2015 (oil-fired generators are no more than bit-part players in the electricity generation game). This isn’t like-for-like capacity – we already know that the load factor for wind is usually lower than for conventional plant. But time isn’t on the side of the fossils.
Perhaps electricity use will start to shoot up in the near future, justifying all that investment? Well, although the long-term prognosis is good considering the need to shift to using electricity for transport in line with decarbonisation targets, the immediate prospects are not great, as there was another decline in electricity consumption in 2012 (albeit a decrease of less than 0.1%).
So where does that leave current proposals for new fossil fuel infrastructure in Wales? SSE have what they describe as a ‘shovel-ready’ consented and permitted power station at Abernedd, near Neath. No investment decision on construction is anticipated “until 2015”.
And how will the two proposals for gas-fired power stations in Hirwaun and Wrexham find investors willing to plough money into fossilised ventures when existing power stations are sitting idle and renewable generation is booming?
Guest post by Gareth Clubb, Director of Friends of the Earth Cymru
 Load factor used here is plant load factor, defined as “The average hourly quantity of electricity supplied during the year, expressed as a percentage of the average output capability at the beginning and the end of year” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225067/DUKES_2013_published_version.pdf page 129, or “how intensively each type of plant has been used” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225067/DUKES_2013_published_version.pdf page 120.
 Aggregate renewable load factor in 2012 was 35.9% https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/225067/DUKES_2013_published_version.pdf page 187; coal-fired load factor in 2012 was 57.1% (page 142)