For the energy sector, 2009 could, for many reasons, be a watershed year. The economic downturn – the recession or depression – will be in full swing and will be accompanied by a further fall in energy demand.
With some forecasters talking seriously about $30 or even $25 oil, the next 12 months could be nail-biting for some companies.
It would also be no great surprise, given the depth and breadth of the downturn, if it continues well into 2010 and that recovery is very slow and patchy.
Against that background, it does seem right that we should be planning ahead – and, of course, there has recently been a flurry of new initiatives from both Government and the private sector.
One of the more important – at least according to the source – was the Scottish Council for Development and Industry report on the future of power generation in Scotland, which was produced for it by Wood Mackenzie.
It’s not a very long report, but then it’s also incredibly boring, so perhaps the fact that it’s only 50 pages is a good thing, not a bad thing.
It’s boring to me because it doesn’t actually say anything new or make any attention-grabbing statements. Not even comments regarding the possible – and I stress the word, possible – need for new nuclear generation come as any great surprise.
But, as I’ve come to expect, what the report doesn’t seem to touch on is how Scotland might gain industrially from the implications of this report. In short, it follows the classic pattern of almost all reports on this topic in that it ignores the question of who will build the hardware we need and who will benefit from the demand created here. But I have dealt with this before, so let’s leave that aside for the moment and go back briefly to the nuclear question.
Technically, the nuclear business is actually getting very interesting. Do not imagine that, in order to have nuclear power, you always need something as complex and huge as the existing nuclear power stations. In fact, we may not even need to worry about the thorny issue of decommissioning and dealing with radioactive contamination.
Why? Well it’s because an American company called Hyperion is in the process of developing what seems to be a sort of solid-state reactor with an electrical output of 25MW. Being a heat source, it has to be connected to a conventional steam turbine to generate electricity.
Hyperion describes the technology as a “nuclear battery” which has a life of about five years. The “battery” is refuelled back at the factory because it is only about 1.5m in diameter and easily transportable on a truck.
So here is a nuclear technology of sorts which, for a cost of about $30million, will power 20,000 houses or their equivalent for about five years. It seemed like a reasonable deal to me, and my confidence in the idea was improved – or rather I became less sceptical – when I also found out that the technology has been licensed to Hyperion by the United States’ Los Alamos National Laboratory. Those guys are no slouches. If they say it works then it probably does.
Actually, this seems not that dissimilar to work done in the 1970s and ’80s by the then nationalised United Kingdom Atomic Energy Authority (UKAEA). I know for certain that it had a sort of solid-state reactor because I discussed with UKAEA its potential for subsea use. It’s a pity, perhaps, that it didn’t continue the development following privatisation.
The other initiative that will impact on the industry soon is the EU Climate Change programme, which includes a proposed 20% cut in greenhouse-gas emissions; a 20% increase in the use of renewable energy, and a 20% cut in energy consumption through improved energy efficiency – all by 2020. This is, of course, a mere 11 years away, so the chances of achieving this programme in full are extremely low.
In any event, there is already a degree of backtracking going on among the politicians.
According to the BBC, “Speaking off the record, a UK source said they were very unhappy with the current proposals, and too much had been given away – particularly to German industry”.
I’m not sure why the UK thinks it has anything to complain about here. We need German industry because we have so little of our own.
The Scottish Government has also now produced its own climate-change proposals and is aiming to achieve an 80% cut in greenhouse-gas emissions by 2050. Actually, that’s a more realistic target than a 20% cut by 2020 because of the availability – or lack thereof – of the technologies we need to achieve that size of target.
The Scottish Government has also introduced two other new initiatives. The first is the Scottish European Green Energy Centre (SEGEC) – to be based in Aberdeen. This centre will work with European partners to promote the deployment of renewable and low-carbon technology. It’s not a bad idea in that it will help ensure that Scottish researchers and engineering companies will be as involved as they can be with European projects.
Critically, though – and very importantly – it also has as one of its roles “translating Scotland’s expertise and enviable record in green energy research into sustainable new activity, in terms of the adoption and application of research outcomes at home and the commercial exploitation of technology in global markets.” Here, then, we have some much needed recognition that green energy technology is a business, and that has to be good news.
The second initiative is the Saltire Prize. To quote the Scottish Government website, “£10million will be awarded to the team that can demonstrate, in Scottish waters, a commercially viable wave or tidal-energy technology that achieves a minimum electrical output of 100GWh (gigawatt hours) over a continuous two-year period using only the power of the sea and is judged to be the best overall technology after consideration of cost, environmental sustainability and safety”.
What can one say? Well, the first point is that this is hugely ambitious. According to one research engineer involved in this sector, to achieve an output of 100GWh over two years would require 14MW of installed capacity to run for 10 hours per day at rated output, every day for two years. He followed that by saying that, based on progress to date, that will not be achieved within 15 years.
Now, you can play around with the figures to make this target seem more achievable, and you can perhaps look at multiple units whose total output would achieve the 100GWh, but regardless of that, what it tells me is that any company or organisation that has the resources and the capital to design, develop, build, instal and run one or more of these devices probably doesn’t need £10million.
Happy New Year.