Energy minister gives grudging nuke endorsement UK Energy Minister Chris Huhne has given a ringing endorsement of nuclear energy and lauded the potential of thorium reactor technology, in his speech to the Royal Society today. Actually, he didn't – that sentence is entirely a Johann-Hari style fictionalisation. Huhne did give a speech to the Royal Society on nuclear energy …
"Careful readers will note that without the burden of CCS, gas is by far the cheapest of all: and likely to fall dramatically as onshore unconventional reserves are exploited. We'll have more gas than we know what to do with."
So lets just fall into the trap! Lets just waste this resource until in 30 years or so were are back to square 1. Wow, was this comment considered in any way?
That'll be sorted in about 50 years time. That still leaves a 20 year gap to fill.
Any other major development can only realistically come from fission power, which the western world seems to be trying to sideline as much as possible, hindering the sort of major developments we really need.
How long before the idiots we elect to govern, regardless of political persuasion, realise that unless they spend billions in research into fusion (cold, warm, tepid or whatever), building new or replacing old fission reactors is about the only reliable way we're going to keep the lights on around these parts in the not too distant future?
Short of surrounding these shores with flocks of whirling windmills or tidal flow turbines and continuing to plant even more in what's left of our green and pleasant land (before the new planning bill covers it in concrete & tarmac) , use what's left of our coal reserves (heresy, fancy thinking of that) there's no RELIABLE, immune to changes in weather, wind, whatever, electrical source to provide enough to keep my Mac running so I can read El Reg.
Build enough and we might be able to sell some of the output back to the Germans?
Well, that might be a problem if we somehow had another ice-age, and didn't notice - to pile up moraines again.
you'll note the Norwegian coast has been surveyed pretty intensively, to check for potential for antoher such landslip - in order to understand the risk to oil and gas installations.
http://www.ngi.no/en/Contentboxes-and-structures/Reference-Projects/Reference-projects/Ormen-Lange-and-Storegga/
anywhere else you want checked?
"Ever heard of the Storegga Slide?" Yes, an event that would first need another extended ice age to create the underwater silt build-up necessary for a repeat, which kinda suggests we're not going to see another Storegga Slide soon. Of course, don't let those simple facts stop you Greenpeckers screamning about it like it was a reasonable idea.
Nuclear is still uneconomic after the taxpayer assumes all the disposal and insurance underwriting costs. Goodness only knows what it would be like if the nuclear industry had to pick up its own costs.
A minister who gave the nuclear industry a ringing endorsement after its relentless failures to bring projects in on time and on budget would be a minister who hadn't read his brief. And judging by the former flag bearer for the whole nuclear industry: Olkiluoto 3 in Finland; we're in for a whole raft of substandard construction, cost overruns (now 50% over budget) and delays (at least 3 years). Strange how the nuclear business has gone so quiet over Finland.
Nice to see the old thorium chestnut again. It's been a while since that brand of snake oil was given a good marketing. There isn't a single thorium reactor operating in the world. There isn't a licensed thorium design in the world. There isn't a prototype thorium reactor operating in the world. Nor is there a reprocessing plant to deal with the thorium cycle, nor even an international agreement to regulate the mountains of highly fissile U-233 which would be produced.
A tide generator that is producing the amount of power forecast as well as solar and wind power generators in the UK producing the forecast amounts of electricity 365 days per year in accordance with the lovely brochures that were sent out.
Oh sorry, just realised that old chestnut won't go away either since to date none of the renewable energy sources we are currently subsidising such that our fuel bills are over priced whilst the City and the companies involved make a fortune, is anywhere near producing the level of power that we need them to.
On the other hand, existing nuclear power stations continue to provide consistent levels of power and of course the people we will have to buy future power supplies from, the French are busy building new nuclear power stations.
Nuclear is the only option we have, we need to research new, safer methods of production but in the long term it is the safest and cleanest means of producing power.
the proponents of tidal power always forget one toher thing - although it's predictable, it's still intermittent - with all the problems that causes.
The Severn barrage as most recently proposed would cost about £20Bn. It's advocates quote it's PEAK power output - about 10GW. That's what it's make at the usual highest spring tide of the year.
On most days, it'd make 8-9GW - at peak.
But over a month, it'll average a LOT less - about 1.8GW.
In any given day, it'd run through a cycle of starting with peak output, gradually declining to zero over 6 hours or so. Then (as the reservoirs refill) it'd produce nothing for six hours, until coming back onto full power, then declining again, and refilling again.
So, dependent on the time of day when those peaks and troughs occur, I've got to cycle lots of other plant in and out - like, half of the entire current gas fleet. The implications of that would be dropping the capacity factor of those gas stations from about 65% to around 30%.
Then think about the implications of the fact that, ovr a month, the timing of the two peak outputs.
At this time of year, demand varies through 24 hours from a peak of about 47GW down to about 22GW and then back up again. Peak covers about 3 hours. is about 7pm (demand will be above , and demand is pretty much flat at a minimum from about 11 pm until around 5am. What's basically done is the the most efficient/lowest marginal cost stations run 24 hours as baseload (Sizewell B typically refuels then runs flat out for about 18 months until it needs to refuel again, for example). Accomodating the Severn Barrage means I can't use 22GW of plant in that efficient mode - I can use 12GW.
Worse, I've a 50% probability that one of the peaks of output from the Barrage would happen in that low demand period, and a 25% chance that one will coincide with the peak demand period.
To cut a long story short, integrating something like the Severn Barrage into a reasonably efficient grid, where other plant can run even close to optimally would be an utter nightmare.
If it is designed like the Rance Estuary scheme then it will produce power for those 6 hours as the water flooding into the reservoir turns the turbines,
Backwards, you might say.
No, there are two tricky periods, around slack water, when some otehr way of storing energy has to be used if you want continuous power.
Alternatively, you could sell power cheaply when the turbines will be spinning, and more expensively when it comes from other sources, and let power-users adjust themselves.
The tides have an advantage of being predictable for arbitrarily long times into the future, so scheduling is not ridiculous.
If you design for bidirectionality, you reduce the total flows available - worse, you tend to end up with complex multi-reservoir designs.
Here's FoE's comment:
http://www.foe.co.uk/resource/briefings/the_severn_barrage.pdf
Note
"The installed capacity, or maximum output, of the Project proposal would be 8,640 megawatts (MW) or 8.64 gigawatts (GW) and would have a load factor of about 23 %. Generation would occur on the ebb tide."
"If it is designed like the Rance Estuary scheme then it will produce power for those 6 hours as the water flooding into the reservoir turns the turbines,"
I had forgotten this fact entirely.
I suspect it's one of the *major* differences between conventional dams and tidal barrages.
Not obvious but pretty important.
"But over a month, it'll average a LOT less - about 1.8GW."
So its *average* output is close to *two* usual sized UK power stations. in a system with a life span at least as long as the Hoover dam or the Rohn barrage in France, rather than the nuclear power stations built so far.
With *no* nuclear waste disposal problem.
I'm not saying it's the best solution but like geothermal it's likely to last quite a long time (roughly until the Moon hit's Roche's limit and disintegrates, which won't be for a while).
Well, the EPR is designed at 1600MW, with an inherent stretch to 1800. And there's a design stretch for the AP1000 in the works to 1400MW. So, nearer to one than two. And both are designed around a 60 year design life.
The problem is, cost.
Even the Sustainable Development Commission saw a 1.8 GW average Severn barrage coming in at the £20-25Bn mark. Which conservatively prices the ouput in the £180/MW range, roughly comparable to offshore wind. That's excluding the system costs of the variability, by the way. Colin Gobson, former COO for National Grid estimates the incremental life-cycle costs for offshore wind are increased by about 50% by such afctors (transmission investment, back-up and variability compensation, inefficiencies in the compensating capacity) - that wouldn't be so bad, because there's at least some predictability, but it's still unlikley to add less than 25%.
The last review decided that the barage was unfundable - even assuming large government interventions. I've not seen anything to suggest otherwise since
The latest delay, announced here in Finland a couple of days ago, takes operational power generation by OIkiluoto 3 to 2014, a delay of five years from the original date.
Many of the delays have been due to the detection of substandard work, as you note, and one to the fact that a crucial part of the safety plan wasn't yet ready [*]. The long chain of subcontractors has complicated matters, and there has been at least one strike at the plant due to lowest-in-the-chain workers being paid a pittance. I'm sure that encourages quality work. Not.
And this was supposed to be a shining (no pun intended) prototype of a modern nuclear power plant which Areva hopes to sell many more of. After the fiasco of Olkiluoto 3, I wouldn't be so sure of that anymore.
Oh by the way, is the Register now of the opinion that climate change is, in fact, happening? This article was missing the usual snide comments on the matter, and in fact repeated the standard concerns of increased carbon output. Or is Lewis Page The Register's only denialist? And why isn't he doing his thing anymore?
[*] http://www.ecology.at/nni/index.php?p=site&s=207 says:
The Radiation and Nuclear Safety Authority Finland (STUK) has asked Teollisuuden Voima Oyj for further clarification of the overall design of automation systems for the Olkiluoto 3 nuclear power plant by 31 July 2009. This request for further clarification is related to the decision made in summer last year by STUK, in which it demanded that TVO revise the architecture of the plant's automation systems.
In its inspections early last year, STUK observed several deficiencies in the automation system design of the Olkiluoto 3 nuclear power plant. From a safety point of view, the most significant deficiencies concerned the mutual independence of automation system components that back each other up. In July 2008, STUK issued a decision, in which it presented comments on the automation system design and demanded that TVO revise the documentation. STUK particularly emphasised the significance of the overall architecture of the automation systems.
TVO submitted a revised plan for the inspection of STUK in December 2008. Although the plan had been improved, the documents still contained weaknesses and contradictions with earlier documents. STUK asked for further clarification and, through a separate decision, presented demands for a protection system for the reactor. The reactor's protection system is part of the key section of the automation system, the protection automation system, the function of which is to start up the plant's safety systems in case of accident or malfunction.
In March 2009, TVO submitted a new version of the plan concerning automation system architecture. Both the automation system design and its related documentation had been improved, but they still contained deficiencies, resulting in STUK having to request for a third time greater precision and revisions. STUK is now requiring TVO for updated documents by the end of July. In addition to the documents in question, STUK has also asked TVO for further clarification concerning the validation of individual automation systems and devices.
"Stuk requests more details on EPR systems
04 June 2010
The Finnish nuclear regulator has said that it is satisfied with the modifications proposed for the design of the control and safety systems of the Areva EPR under construction at Olkiluoto, but clearer documentation on the independence of the systems must still be provided.....
......The Finnish radiation and safety authority, Stuk, which first raised queries about the EPR's systems in December 2008, has now reviewed technical plans submitted by Teollisuuden Voima Oyj (TVO) concerning the control and safety systems of Olkiluoto 3. It concluded that "no notable change" would foreseeably be needed for the planned design.
However, whilst noting that considerable progress has been made in the design of the systems, Stuk said that it "has requested TVO to update the reviewed documentation in such a manner that it provides the necessary initial information of detailed system design in an unambiguous format."
In particular, Stuk requested that "the principles of securing the mutual independence of systems backing up each other are defined clearly enough.""
In other words, issue closed, now catch up with the paperwork.
You fail to note, by the way, the 3rd and 4th EPRs (at Taishan) are pretty much on time and budget - much as you'd expect with series build.
<snip>AHWR, which will use thorium as fuel, was designed and developed by the Bhabha Atomic Research Centre (BARC) and will mark the third stage of India's three-stage nuclear programme.<snip>
http://articles.timesofindia.indiatimes.com/2008-12-20/chennai/27892708_1_ahwr-heavy-water-reactor-breeder-reactor
<snip>India's Kakrapar-1 was the first reactor in the world to use thorium rather than depleted uranium to achieve power flattening across the reactor core. Both Kakrapar-1 and -2 units are loaded with 500kg of thorium fuel to improve their operation at start-up</snip>
http://www.power-technology.com/features/feature1141/
Facts? Yeah - we've heard of them...
It's not a contradiction. Nuclear is the cheapest low-carbon option, but if you force it to compete with high-carbon options that have externalised their environmental costs, it loses.
Actually I urge everyone to follow the link to the speech. It's not half as wild as the article suggests and (allowing for the fact that the Huhne seems to find it emotionally difficult to turn his back on an anti-nuclear childhood) reasonably sane. He *is* calling for a new generation of nuclear stations. He just doesn't want to write a blank cheque. Since I'd be underwriting that cheque, I'm inclined to agree with him.
Most of the swipes he takes at the UK's past exploits in the nuclear field are painfully true. The civil program was always hobbled by the priorities and the secrecy of the military one, and building the Magnox reactors to 11 different designs was quite astronomically stupid. If we are to avoid similar stupidity in the new nuclear program, we need to be able to admit that.
For christmas futures I would really like the following enery policy:
Sufficient nuclear base load to power the country, including capacity for electrification of rail where possible and for electric road vehicles as they come on line, and perhaps the ability to export electricity to our neighbours should they need it as they do to us currently (sorry about that).
Some diversification into other predictable renewables such as tidal, hydro-electric, solar (PV and Thermal) etc as technology improves just to ensure we're not totally nuclear dependent, with some gas fired generation for quick start backup as well. Microgeneration such as PV or "uplift" such as ground source to be incentivised although perhaps in the case of PV a bit more logically than at the moment. Wind to be dumped as a serious power source (as it isn't one).
Adapting where possible the non-electric road fleet onto products derived from all that gas they're finding, which could also be used for domestic heat and cooking if required.
Saving our remaining oil for things that cannot fall into the above categories such as avation, off-grid (as in gas) backup generators where high energy density is required, vehicles that cannot easily access grid connected "gas" etc. And the chemical industry which everyone forgets about.
I fear however, that as with the Lego sets I asked you for years ago I'll be disappointed.
But that's a definitely finite resource.
Forty years of lacklustre support for nuclear research will cost us dearly; only recently has HMG woken up to the pitiful lack of nuclear physicists and engineers and the army of highly skilled construction staff that a nuclear industry requires. The way things are going right now, its going to get increasingly difficult even to buy that expertise from abroad if the German anti-nuclear stance becomes popular elsewhere. Still, at least the French have their heads screwed on, right?
Maybe the Chinese will save us from ourselves, by keeping all their neodymium so they can build the fleets of electric cars that their power grid will be able to support and wind power will become even more grievously uneconomical than it is now. Lets hope they don't mind selling us their thorium tech, eh?
There are suppliers who specialise in providing tree-huggers with electricity generated from wind and PV, so co-called green electricity. But nowhere is there a supplier who buys nuclear energy for their customers as much as possible.
Perhaps more to the point, people who presently commit a few thousand quids to the installation of PV panels on their roof will be in receipt of inflated feed-in tariffs guaranteed for the next twenty-five years, increasing the price for everyone else in order to cover the subsidy. This scheme is a nice little earner for those involved.
What we need is a similar opportunity to buy a slice of equally 'green' nuclear generating capacity, a stake in new power stations. This energy wouldn't need to be subsidised, simply supplied free from the absurd loading that the wind and PV programme is and will for decades be adding to electricity prices.
May I suggest a slogan for you:
Adopt an Atom Today!
Said in a nice, stereotypical, 1950s BBC English voice. Could be a great campaign. You could have Adam the cuddly Atom teddies and badges, like BT's Buzby campaign in the 80s.
...Thinks... I've had a busy week, have I been overdoing it?...
A decade ago, I was talking with a bunch of farmers, and Chernobyl had hit farming in some places quite hard. You wouldn't expect them to be nuclear enthusiasts. But there was all the pressure to grow crops for fuel, and a tendency for these schemes to collapse between sowing and harvest. And farmers do tend to think long-term, more so than MBAs.
Nuclear power was something we knew how to build and operate. It was, ten years ago, clearly the best option available. It would take time to build, but everything does.
Fuel crop schemes still struggle. Wind farms are working. Tidal and wave power are still at little better than the prototype stage.
And we've wasted ten years on waiting for more nuclear power.
Some of the big coal-fired stations will now be worn out before any nuclear power plants can be built to replace them.
Gas should be sent direct to the consumer unaltered through the existing gas pipework network, not converted into electricity and diverted onto the electricity network. We've got 300 years of coal under the ground, that should be being used for conversion to electricity.
Throw in some diversified mixed source electricity production to spread the dependancies as well.
"Gas should be sent direct to the consumer unaltered through the existing gas pipework network...." That would require every household to have a miniture gas-burning generator for powering items like PCs, TVs, fridges, etc, which cannot be gas-powered directly - not very efficient compared to a centralised generator - and a massive increase in the gas infrastructure to cover the extra demand. Are you sure you don't want to think that one through again?
..... if the waste is still radioactive, doesn't that mean it's still got some PE in it? And if we harnessed all that energy, then it wouldn't be radioactive anymore?
If it's quite happy to give up that energy slowly, it probably could be persuaded to give it up a bit faster by bombarding it with the right kind of particles. Why isn't anyone researching turning radioactive waste into lead?
A fair amount of nuclear waste simply isn't very useful. Its nasty, toxic, awkward to work with and in most cases there's nothing useful to be done with it. There are various kinds of reprocessing that can be done to extract useful fuel from waste, but they're not entirely economical at present and many kinds of waste wouldn't yield anything usefully fissile. The radiation and heat you get from this useless waste is simply too low to turn into useful power... you'd be better off building wind turbines and photovoltaic panels instead.
There are various interesting things you could do with a working fusion device that produced a decent amount of neutrons that you use to irradiate radioactive waste, but a) we don't have a working fusion device, b) fusion devices that produce a high neutron flux will create their own hazardous waste products and c) no-one really wants to associate lovely shiny fusion power with nasty dirty fission waste.
Roughly 20-25% of *all* UK electricity is currently nuclear generated.
Those reactors are getting long in the tooth.
The fact that nuclear power comes out cheaper even when decommissioning costs are factored *in* is pretty astonishing. If the claim holds up the British civil service's apparent ability to handle *one* alternative energy source at a time looks even lamer than ever.
Note that "Thorium" comes in various different flavors and that nuclear reactor builders make most of their money in the (incompatible) fuel *elements*, not building the things in the first place.
Refueling a conventional reactor is complex and often done with it switched off entirely. Refueling a molten salt design (in principle) needs a shovel.
But we want higher energy bills, increasing fuel poverty, freezing elderly folk and the like! We can only do this with massively subsidised renewables that produce expensive power and cost money even when we have to turn them off:
http://www.telegraph.co.uk/earth/energy/windpower/8770937/Wind-farm-paid-1.2-million-to-produce-no-electricity.html
It's about time the government ignored sensible, practical and real alternatives. It's not like we have a debt problem to worry about because printing money, I mean... quantitative easing should completely solve the problem.
(On a genuine note, I have nothing in principle against wind power when it can compete fairly against other forms of power generation. At the moment not only is it too expensive when it works, it often doesn't work because we simply don't have the tech to store that much energy for later usage)
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"As we discussed here, 99 per cent of waste can now be converted back to fuel using fusion."
Yes, but once you've mastered fusion, it doesn't exactly endorse fission as an energy source. If anything, it just closes the book on the legacy of today's nuclear industry. Sure, you might want some use for those neutrons, but messing around with uranium and thorium will be very much taking a back seat at that point.
It's amusing to see fusion dragged up when most fans of fission usually pooh-pooh the idea. What next? Fusion making natural gas extraction from tar sands and shale economically feasible and not damaging to the environment? It's almost like buying a supersonic jet and using it to taxi around town.
TBH, using gas as fuel for domestic heating is about as silly as using it for fuelling power stations. We should be looking to a transition to heat pumps (ground or air-source) over the next 20 years or so.
And don't underplay the need for at least some gas in the power station mix. It's uniquely good at being flexed for peaking, and for assisting with the extremes of the load curve. It'd never make sens to go beyond (say) 70-80% of electricity production (maybe 60% of capacity) coming from nuclear. Although newer nukes can load-follow uite happliy, they'll never do real instantaneous load-matching, and the economics of using them in modes where capacity factors drop below 75% or so are horrible.
Gas-fired plant is a beautiful match, if you've got no hydro - it's fixed costs are extremely low, and it's technically highly responsive - which means you can live with the plant having low capacity factors as is needed for plant for peaking and extreme load following.
The nice thing is, you can even do gas CCS quite economically - you don't need to size the CCS plant to support the gas to run at full power for any extended period, and you just hold reformed hydrogen in buffered storage.
And it's an utter doddle to sibstitute for transport fuels.
Huhne does have at least some points....and that's from someone who's not only seriously pro-nuclear, but took his bachelors degree in Nuclear Engineering.
We have managed to consistently cock-up technology choices - and then make an even worse job of actually building stations in the past.
Going with the Magnox designs was probably sensible, given the constraints of the time - little enrichment capacity, no forging capability for larg(ish) high pressure vessels and the fact we'd got the hang of machining high-purity graphite when we built the Windscale piles.
What WAS unforgivable was the fact that in building eleven stations, we used seven different designs. Which completely bolloxed the idea of a learning curve.
It was only then that we REALLY cocked -up. In the early 1960s, the CEGB and SSEB approached the then Secretary of State for Energy for permission to start the procurement of their "second generation" nuclear plant. They thought the gas-graphite line of development had gone as far as it reasonably could - and wanted to adopt an American LWR design. The UKAEA was at the same time lobbying for a "super-Magnox" - the AGR (funny that an R&D organisation wanted the option that needed lots of R&D, but maybe that's just me being cynical). The CEGB claimed the complexity of the design, and the need to fabricate almost the whole thing on site would make it expensive and prone to delays. The Secretary of State sided with the AEA, as he wanted to develop a "distinctively British" technology for export - that was Tony Benn, by the way, fresh from the decision to build Concord.
Not a single AGR was ever sold abroad. Not a single AGR was finished on less than a 50% cost over-run, or less than three years late on a seven year build programme. Hardly surprising, because not only had we picked a pig of a design to build, we then managed to decide to build three and a half different designs amongst seven stations built. Dungeness B, the first to be started, was twelve years late on a seven year build. THe last two, Heysham II and Torness were meant to be built as copies of Hinkley Point B and Hunterson B, but finished up with change on every major system.
At roughly the same time as we opted for the AGR, the French were faced with the same choice. They went the other way, and licensed the Westinghouse PWR. In the same time it took us to built seven AGR stations (14 reactors, totalling 9,200 MW) the French deployed about 55 PWRs, totalling about 50,000MW, using just four designs, each larger than the last. They also manged to export something like 20 of the things.
We're about to build a derivative of that design, scaled up to 1600MW in a single reactor - the EPR. The other candidate for new build in the UK is also a PWR derivative - the AP1000 from Westinghouse .
Only one country has built a gas-graphite reactor in the period since we started building AGRs.
North Korea.
The moral of the story? Keep Ministers, and especially the British Civil Service, a thousand miles away from any aspect of technology choice.
Next, onto Thorium
"Smart" metering will mean that in the future when we are short of electricity (and we will be) tarrifs can be adjusted many times during the day so that the price you pay for the electricity you use at any given time of the day (or how windy/sunny it is outside) reflects the amount of electricyty available. Simple supply & demand economics.
The reason we WILL run short of electricity (and personally I can't wait for that to happen) is that no-one is prepared to pay the real cost of power generation, whether that's nuclear, fossil or renewable. The end user will have to pay a lot more for energy in the future if new power generation and transmission infrastructure is going to be built.
The act that no-ne wants to pay for it is perfectly illustrated by today's furore over OFGEM's claim that (once again) energy companies are charging us too much.
You can't have your cake and eat it as they say.
And one reason is that when the big six increase the price of electricity and gas due to the "increasing cost of buying gas/oil/name your own feedstock" they also quietly pump up the profit margin whilst they are it.
For example if the cost of gas rises by 10% you bill does not go up by 10% of increase in gas prices instead it goes up by 10% plus the 10% that is applied to the profit margin. OFGEM if it had the power could insist that the companies concerned only increase the cost element of their pricing as opposed to the whole thing. Whilst not having a massive impact on the overall costs of provision, it would force electricity generators to find other ways to improve their profit margins rather than as now, simply boosting it when the price of feedstock goes up
Say you pay £10 for electricity at the moment. About 70% of that is the wholesale cost of the power at "station gate" (of which about, with out current generation mix about 45-50% is fuel, 15% operational and finance costs, 6-7% is renewables subsidy, and the rest generator's profit margin...and yes, those are meant to add up that way) . Transmission and distribution together add another 15-20%. Metering and the operations cost for the retailer is about another 5%.
Retailers gross (not net) margin will hit about 9% this quarter before declining to about 6% next year. For the last couple of quarters, they've been around the 1% mark. Which is below the reatiler's cost of capital. Averaged over the last ten years, margins have been about 1-2%.
With the greatest possible respect (given your other contributions), don't you mean the *alleged* wholesale cost of the power at the station gate? The vast majority of our electricity comes from vertically integrated suppliers whose economics are deliberately obscured to prevent regulatory intervention.
There is a bit of a regulatory and economic parallel here with the situation with BTwholesale, BTretail, the ever-incompetent Oftel/Ofcom, and such. We do not as yet have the electricity equivalent of local loop unbundling to radically change the market dynamics, and I hope we never see the same "race for the gutter" in electricity supply as the race for ever-cheaper broadband has produced in the broadband market.
Energy was the model followed in when the local loop unbunding came in - the transmission infrastructure was separated from generation, retail and distribution at privatisation, and separation of distribution from retail was enforced from the mid nineties (first on a "chinese wall" basis, and now almost total separation of ownership - the only part of the network in England and Wales owned by a firm that's also active in retail and generation is the old Manweb patch)
And we did indeed run a "pool" - compulsory short term auctions - from privatisation to 2001. It didn't work especially well, being prone to "gaming" by generators, and causing a lot of instability in price.
For those reasons, it was replaced in 2001 by something called NETA - "New Energy Trading Arrangements". You can judge the effectiveness of it by the fact there was something like a 25% drop in average wholesale prices in the 12 months following it's introduction - and prices (allowing for gas and coal prices, which are internationally traded) have if anything fallen further.
It's also worth saying that both OFGEM and the Competition Commission have been over the generation trading arrangements several times since, and found no evidence of collusion to drive prices. And although its true most power comes from generating capacity owned by the big 6 there's significant capacity that doesn't, or has to be traded outside the parent group. The two biggest examples are Drax (4,000 MW), and Eggborough (2000MW); plus as part of the deal to buy British Energy, EDF signed a deal to sell half its production outside the group (something like 5,000MW. Also, the production from the remaining Magnox stations - about another 1500MW - is not part of any of the big 6. Add that lot together - I make it about 12,500MW - and you've something approaching 30% of total generation. More than enough to establish a reasonably liquid market, and to get a price baseline.
Part of the problem is, the press is lazy - they conflate concentration in retail with concentration in generation, and don't look at the internal structures of the market. For example, Centrica has no choice but to trade for 75% of its electricity requirements (and they're the biggest player - 25% of the residential market). They simply don't possess enough generation, so buy from just about everyone out there. By contrast, EDF/BE and SSE are notably long in generation compared to retail - EDF/BE produces about 25% of total production, but only has about 10-15% of the retail market. Indeed, as I commented elsewhere, SSE's gambit about open auctions is more to do with the fact they're short on sales for their generation, and their plant's running horrifically low capacity factors as a result.
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