20150715_R4
Source: BBC Radio 4: Today
URL: N/A
Date: 15/07/2015
Event: The Today programme on energy in the UK and fracking
Credit: BBC Radio 4
People:
- Steve Holliday: Chief Executive of the National Grid, UK
- Simon Jack: Business journalist for the BBC
- Sarah Montague: Presenter, BBC Radio 4 Today programme
- Jeremy Nicholson: Director, Energy Intensive Users Group
- Lord Smith: Former Chairman of the Environment Agency, UK
- Justin Webb: Presenter, BBC Radio 4 Today programme
Sarah Montague: If we don't want the lights to go out, then the National Grid has to be able to provide more energy than we use. But its spare capacity is expected to fall to its lowest in a decade, this winter, down to just 1.2%. That compares with 4.1% last year, but it used to be 16%, a few years ago. Well, it has tried to compensate by spending millions buying in extra power and paying big companies to use less power at certain times. But does it mean we could have blackouts? Well, Jeremy Nicholson is from the Energy Intensive Users Group, which campaigns for secure energy supplies for industry, and he's here in the studio - good morning to you.
Jeremy Nicholson: Good morning.
Sarah Montague: How fragile are supplies, at the moment?
Jeremy Nicholson: Well, let's keep this in perspective. It is a concern, this winter in particular, and National Grid are quite right to flag this up. There is a genuine risk - I put it no stronger than that - that our supplies may be inadequate to meet demand. But equally, National Grid are doing what they can to try and manage this difficult situation, including contracting with large industrial users of energy - steel companies and chemical companies, that sort of thing - who use very large amounts of electricity, that they can turn down their demand if the system comes under strain.
Sarah Montague: They're paying them, to say: "Look, don't use them at these critical times."
Jeremy Nicholson: Exactly -
Sarah Montague: And is that easy for the big companies to do?
Jeremy Nicholson: For one or two companies it's not too much of a problem, for some of them it's a big problem and for others, they can do it if the price is right. No business wants to interrupt its production, most of these processes want to run continually but if the price is right, it's something they're prepared to do, because it's in everyone's interests that the system remains secure and we don't have a risk of blackouts - industry will be very badly affected if there was an unplanned disruption to their power supplies.
Sarah Montague: And these extra costs to try to increase the margin, 36 million that the National Grid is paying, will of course be passed on to us - we're told it's about an extra cost of 50p per typical household, for the year. Why is this happening, and what can we do about it? I mean, presumably it's the move away from coal-fired power stations, as they're closing.
Jeremy Nicholson: Indeed. And the government's known about this for a long time, and arguably previous governments ought to have done more to make sure we're never in this position in the first place. Because older coal-fired power stations are retiring for environmental reasons and some of the older nuclear stations have come to the end of their life, we're missing some of the reliable baseload power that keeps the energy flowing, 24/7.
Sarah Montague: Are we doing enough, now?
Jeremy Nicholson: Er, no, but it does look like the government has taken certain measures with a capacity mechanism that will, that will enable generators to recover a bit more money for power generation that may only be used intermittently, because at the moment, we've got an awful lot of solar and, more particularly, wind power on the system, which is wonderful when the wind's blowing but not so much when it isn't. And we need something that can come in and out, depending on when the wind's blowing and the sun's shining, to make sure we've got continuity of supply.
Sarah Montague: Now we should say that the National Grid didn't need to use the margin last year but we did have a very mild winter. What if - and as I understand it, the forecasts are on a sort of typical winter - what happens if it's a bad winter?
Jeremy Nicholson: Well, that's the problem. If we have a mild winter, we should be fine. And indeed, even if we have a normal winter, if there are no problems with power stations, we should be okay. The problem is if we have a severe winter, where the demand for heating is naturally high and particularly if we have a severe prolonged period of cold - and if that coincides with low wind output, because we have low wind speeds - that is the sort of situation which could put our system under severe strain.
Sarah Montague: Jeremy Nicholson, thanks very much.
Justin Webb: The time is 19 minutes past 7. We stay with energy matters - fracking faces an uphill struggle for public acceptability, that is no surprise. Simon has more on it.
Simon Jack: Yeah, and that's also according to the Task Force on Shale Gas - that's their words, it's headed by Lord Chris Smith, former chair of the Environment Agency. Now this Task Force, it says it's impartial - we should say, though, it is funded by the energy industry. This morning its second interim report is out - it's addressing environmental concerns. Lord Chris Smith is on the line. Um, give us a broad overview - what's the aim of this - this is the second of four reports, what are you trying to do?
Lord Smith: It is indeed, and this report is looking at all the issues around environmental impact, local community impact and public health issues - er, the things that have been of real concern to communities up and down the country.
Simon Jack: And you're calling for full disclosure to the public of the chemicals involved, you want community representatives to be involved in the process - is that, is that going to happen?
Lord Smith: Er, yes and yes. We, er, I certainly hope it will happen. What we're saying is: the only way in which we will get any sort of community acceptance of proposals for fracking operations is if the companies are completely transparent about what they're doing, about the chemicals that they're using, about their engagement with the local community. If they involve local community representatives in the inspections of the site, if the well is absolutely, properly, rigorously drilled, carefully regulated and monitored and community representatives are involved in that monitoring, and if they do a process which we call "green completion", which means that you capture the escaping gas, rather than simply letting it go out into the atmosphere.
Simon Jack: Or flare it, or burn it off. Now you've actually been critical of Defra, because you say in the past, reports from Defra have had all the negative stuff edited out.
Lord Smith: Well, of course the famous Defra report, which was about 90% redacted, with black spaces everywhere in the report - it would have been better not to publish anything at all, because of course immediately everyone thought: "Oh, they're hiding something terrible".
Simon Jack: Right.
Lord Smith: That report has now been fully published - it would have been so much better if it had been out there in full, from the word go.
Simon Jack: Okay, openness is the way forward -
Lord Smith: That is absolutely [inaudible] -
Simon Jack: Now, recently of course, Lancashire County Council rejected an application from Cuadrilla to drill, and it wasn't on the basis of chemicals and knowing what was involved, or earthquakes - the fact was, it was too noisy, it was unsightly. Very hard to mitigate against that reality.
Lord Smith: And those, of course, are issues that are part of the planning application and the planning decision that Lancashire took. Um, we address some of those issues in our first report, and one of the things that we said at the outset was: very simple things, like make sure that if you're running a fracking well, you pipe in all the water, you don't truck it in, so you reduce the number of lorry movements to an absolute minimum. Make sure that there's a relatively easy access to major roads, so that you don't go trundling through little villages -
Simon Jack: So there's - very, very quickly, in his productivity plan, George Osborne called for planning - he was talking about house-building in this case - to be centralised. taken out of local hands. Should that be done, in your industry?
Lord Smith: Er, I think it would be impossible, at the moment, to take those sort of decisions with this highly controversial subject, out of the hands of local communities. But what the companies must do is engage with the local communities from the outset - involve them, be open with them and make sure that everything is properly, rigorously monitored, regulated and done properly. Because it's only if you do that, that this can be safe for the environment and for public health.
Simon Jack: Chris Smith, Lord Smith, head of the Task Force on Shale Gas, many thanks.
* * *
Sarah Montague: What is the chance the lights could go out, this winter, that the country could be crippled by power blackouts? It sounds overly dramatic, and yet the National Grid has said its spare capacity will fall to its lowest in a decade, this year, down to just 1.2% - it was over 4% last year. Steve Holliday is Chief Executive of the National Grid and joins us on the line now - good morning to you.
Steve Holliday: Good morning.
Sarah Montague: What's your answer to that question, what is the chance that we will run out of power?
Steve Holliday: Well, what we've done is, is released an outlook for this winter, which we always do at this time of the year, just inform all of the participants who produce energy and consume energy about the best view that we've got of the balance between supply and demand, for this winter. And as you rightly said, it's tighter than last winter - 2,000 megawatts of generation has shut in the UK, so no surprise it's tighter. But we've already taken some measures to make sure that we've contracted extra capacity and extra response on the demand side - so people can just reduce their power consumption so that we can handle the coldest, darkest day. So, by the time we've taken that action, we're actually back to where we were last year, so going into the winter with a margin that we're comfortable with as the operator of the system - that's what the National Grid does, just balance the supply and demand, minute by minute.
Sarah Montague: Indeed, and last year it was a relatively mild winter, so that extra capacity that you secured wasn't used. But I come back to my question, really, of what the chances that the - we couldn't, we might be in a situation where people don't have the power.
Steve Holliday: Well, there's a chance every day, in an extraordinary set of circumstances, where a lot of the power stations in Great Britain were to shut instantaneously, that, you know, we'd have a power outage. But as we look at this winter, and sit in the middle of the energy system here, it looks as if we've got a comfortable level of supply, to handle - and it's always worth actually reminding everyone, what we're trying to do is make sure that there's enough capacity on the system for the coldest, darkest half an hour of the year. So it really is this one moment of peak demand. Last winter wasn't particularly cold, so we didn't even see a particularly peak demand, but we always need to be prudent and make sure that we've got that extra capacity, should we need it.
Sarah Montague: So we shouldn't worry.
Steve Holliday: I would not worry, no, absolutely. Um, it's - our demand in the UK is flat, year on year, so the peak isn't going up any more, either - we're becoming cleverer at conserving energy. But we've taken the right action to make sure that we can handle this peak demand, should it occur on a very cold, dark day.
Sarah Montague: Mm, but we have this difficulty, as you point out, of losing energy from power plants closing and problems at power plants. Um, and we have this system of where you are, effectively, in order to create this margin, paying - the critics would say you're paying to keep older, polluting coal plants on the system for longer, rather than moving to greener ways of providing energy.
Steve Holliday: Well, we've moved enormously towards greener energy - it's phenomenal, the revolution that most of us, as customers, you know, can't see, the amount of our electricity today that comes from wind and the phenomenal amount that comes from solar power. So, you know, we have got a green revolution going on. But you're absolutely right, you know, we've taken out some insurance to make sure that, of course, the coldest, darkest day, we don't get the solar, necessarily, but we can assume that the wind will be available to us. And there's some old plant that will be rewarded for being available. And interestingly, this new world in which we're being more flexible with how we consume electricity is beginning to grow enormously, so people don't shut off their power supplies but they reduce how much they're consuming during this half-hour period -
Sarah Montague: You -
Steve Holliday: - and get paid for doing so.
Sarah Montague: Forgive me for interrupting but you sound quite relaxed. Is it all working well?
Steve Holliday: Er, I think "relaxed" might be a slight exaggeration, but certainly not complacent. But I - as we are asking people whether the facts that we're producing are right, so this is a consultation to make sure that the data's robust. And then we'll issue the final outlook in October. But if it ends at where it is today, then we're in a position that we've been in many, many times before, and Great Britain has successfully made sure that the lights stay on.
Sarah Montague: Steve Holliday, thank you.