T
he last thing the UK energy market needs ahead of Winter 2014/15 is another disruption to the supply of energy.
With the system under critical strain through the loss of the Heysham & Hartlepool nuclear reactors and the fires at Ferrybridge and Didcot gas stations more bad news has raised it head.
This time it is Scottish Power who have threatened that their Longannet coal generation power station in Fife, a plant with the capacity to power two million homes, would be uneconomic to operate unless special discounts for operation are awarded to them.
Longannet is already Scotland’s last coal-fired power station and plays a critical role in balancing electricity supply and demand to prevent shortages in Scotland.
Indeed Longannet’s role is more than just absolute volume delivery; in tandem with the Peterhead gas plant they represent the only fossil fuel plants still in operation north of the border. It is the flexibility to ramp up and down the production in such plants that makes them the perfect antidote to disruptions in voltage and frequency. Their loss from the system represents the loss of this capability – bad news for avoiding blackouts.
Without Longannet in operation the capability to balance the system in Scotland would be seriously compromised with the alternative generation sources such as wind farms and nuclear power plants simply unable to react in anything like the same way to peaks and troughs of demand.
Neil Clitheroe, the Chief Executive of Scottish Power’s Retail and Generation division, said:
“That [the balancing provided by the plant] determines whether your TV flickers, whether your lights dim, whether sensitive motors in a manufacturing plant maintain good running.
“Although power can be imported to and from England to manage large swings in demand, the fine-tuning requires a power plant within the region…. [which is] essential for the smooth operation of the network.
“Unless National Grid can get someone else to deliver this service, you get voltage variability and frequency variability. That means your lights start dimming. These services are essential for a consistent supply.
Clitheroe called on National Grid to change the rules to keep them operating:
“To avoid closure within the coming years, changes to the plant’s financial situation must be achieved. For many years we have argued that the transmission charging penalties imposed on Longannet are disproportionately high in comparison with other power stations in the south of England, some of which are actually paid a fee to remain connected.
“The lack of any sensible regional flexibility in the current system penalises generators in Scotland, and discourages investment in new thermal power plants.
“Simply to reach the 2018 delivery year, Longannet needs to pay over £120 million in transmission penalties. In comparison, if Longannet was located in the London area, the station would receive a fee of £4 million per year to stay connected.”
As a result Scottish Power have called on National Grid, the network operator, to provide a reduction in transmission charges.
Scottish Power said that it could not commit to keeping the plant operational until 2018 without a cut in its estimated £40 million-a-year transmission charges and said it would not enter Longannet into next summer’s auction for capacity designed to keep supply secure over the coming years unless National Grid reached agreement on the issue.
Clitheroe added:
“The future is really uncertain. We want to keep the plant open, but these economic conditions need to change.
“If there is no Longannet, how are you going to control voltage and low frequency in Scotland?”
Scottish Power’s ‘threat’ was not met kindly however with Doug Parr, chief scientist of Greenpeace, saying:
“This is the worst kind of lobbying from Scottish Power, attempting to bully government into giving them special measures. Longannet is coming in for special pleading to use its market muscle and size to try and get a change in its favour.
Ofgem, has already, though somewhat belatedly, cautioned that the spare generating capacity could fall to as low as 2 per cent next winter as old coal plants are closed and with few new power stations being built to replace them.
Whilst Scottish Power complains however, other suppliers have taken a more positive and robust view of the future with the submission of dozens of proposals to build new power stations by 2018 to qualify for National Grid’s subsidies.
GDF Suez
Of much sooner benefit is GDF Suez’s commitment to help businesses manage tight supply constraints this winter.
The Leeds based business energy supplier has launched a service for I&C customers to enable them to track their energy usage over such critical periods.
This new, improved triad warning system is designed to alert clients ahead of periods of peak demand in order to enable them to moderate their usage and avoid punitive costs.
GDF Suez claims to have predicted 20 of the 21 triad periods over the last 7 years.
Triad is the three half-hours between November and February where demand on the grid is at it’s highest. Large consuming I&C customers are then charged for their proportion of usage at these times, a charge that can be extremely disadvantageous. As a result I&C customers are increasingly incentivised to avoid peak usage in these periods.
Triad’s have historically been seen on Tuesday winter weekday late afternoon’s in February but these triad periods have become increasingly difficult to predict as more ‘demand management’ has been taken by affected customers and so natural behaviour has been diluted.
In an unprecedented occurrence a Triad recently occurred on a Friday and no one in reality would have predicted that. Indeed the impact of demand management has been so great that the relative level of the Triad peak demand is lower, but the risk of being caught and exposed in an unpredictable period far greater.
Alistair Johnson of GDF Suez’s electricity demand forecasting team said:
“The escalating charges mean it’s never been more important for businesses to try to reduce their energy consumption during triads”
Who said energy suppliers were all the same?
One threatens, many reinvest, another helps and supports.