The duo in charge of these policies – Angela Rayner (housing) and Ed Milliband (energy), did not co-ordinate their announcements last week, and there is a feeling in energy circles that both policies may fall flat for the same reason – delays in generating clean energy to the places where housing is most needed.
Housing and energy are closely connected – you cannot build new communities until the power supply is in place. We know that there is currently a 10 year wait to connect new housing estates to the grid in some parts of the country, and a 10 year wait to connect a solar farm to the grid in others.
The government also launched its vehicle for its energy initiatives last week, Great British Energy, to be run by former Siemens executive Juergen Meier. it is going into the business of picking winners – but energy for housing does not appear to be in the list. £8.5b has been announced for it to co-invest with big industry players in the next generation of wind and solar farms. But these projects take years to start generating power. It took the best part of a decade to build the Hornsea 1 Windfarm, and that was AFTER planning permission was granted in 2014. So reforms to planning permission on which the government is currently consulting are unlikely to make much impact.
And the recent history of government energy deals shows the Civil servants charged with negotiations were ham-fisted and outmanoeuvred at every turn. The UK chair of French energy company EDF, Alex Chisholm, previously ran BEIS, the department that struck the deal for EDF to build a new nuclear power station in Somerset., as reported in the Guardian. “The agreement was made in 2016 with UK bill payers bearing the costs, which soared from an estimated £18bn to at least £31bn…. it is due to be completed in 2031 – about 14 years after EDF said it would be up and running.” In 2023, EDF was the leading company in the wholesale electricity generation market in Great Britain, with a share of 18.5 percent. The UK branch of the German company RWE ranked second last year, with a market share of approximately 17.5 percent
Data centres and EVs will gobble up all the new energy the grid can produce in this country for the next ten years.
Where does that leave the new housing starts that are so badly needed? How will they get their energy this year?
The big energy consumers will always need the grid, but for at least some new housing estates, electricity could be supplied from small local microgrids that do not need to be hooked up to the main grid – at least not initially, though they may merge in the end.
Yes. that would make the energy they produce somewhat less reliable. It would mean households having their own backup power, in the form of batteries to see them through a few hours here and there, when the microgrid storage has run down, but it would in every other respect be a typical housing estate with the same houses, roads and lifestyle
A 5 Megawatt microgrid can power a thousand homes reliably, and be installed and running within a few months, compared to a few years for a large scale windfarm. It can reach parts of the country where the grid cannot reach – left-behind areas, unemployment blackspots or conversely, places where housing demand is the most intense and consequently the wait for a grid connection is the longest. And a Microgrid won’t lose 8.5% of the energy it creates in the system of pylons and copper wire, as does the main grid according to the government’s own figures – because there is no transmission – the energy is used locally.
Microgrids can be locally owned and run, putting communities in charge of their own power, and keeping bills down. They add to the country’s overall energy resilience the next time Putin turns off the gas supply across Europe.
Yes, the government’s current plans should of course go ahead, but let’s back a few other options and spread the risk,
The politicians seem unwilling to listen – the energy companies won’t do it. They see microgrids as too small, not making enough difference, not moving the dial.
But a large-scale rollout of several hundred of these microgrids, with an average budget of £7.5m and each powering at least 1000 homes plus other community facilities, could add tens of thousands of housing starts, far quicker than any other known method.
The microgrids are cheaper as well as faster to market. My own calculations (detailed assumptions available) show that they will deliver electricity at a cost of £75/MwH over 10 years, compared to £170 for large scale windfarms. If you compare them over a 20 year period the costs are about the same, but we may be getting our energy in very different ways 10 years from now.
Electrical power is political power. And we are about to watch that truth being played out in real time. It’s all sadly predictable. The government becomes a shareholder (in effect subsidises) in a range of big energy projects. A floating wind farm here, a carbon capture plant there, a mini-nuclear plant somewhere else, and massive bonuses for electricity executives all around. Muh of th technology is totally unproven – especially carbon capture but also mini-nuclear. Micro-nuclear would be a safer investment. Units the size of a container could power 20,000 homes for 20 years each.
How would 300 microgrids costing £2.25 billion work in practise?
The main sources of clean energy in the UK are wind, solar and hydro. Big wind farms have an efficiency of 55%, while small farms or single turbines struggle to get to 45%. Solar only has an efficiency of 25% and hydro is more like 75%. Assuming that the small microgrids were divided equally between those three, the average efficiency would be about 48% – not far behind the big wind farms the govt is already planning.
And energy does not need to be connected to the grid. It could be a private arrangement among 500 neighbours, or a collaboration between a large industrial farm and the local residents. It could be connected to the grid at some time in the future, if needed.
A successful microgrid balances the cost of battery storage vs the benefit. The cost of the batteries is a large part of the cost of the microgrid. and at the moment the batteries mainly come from China. Some of the GBE budget could go to setting up a successful battery industry in the UK – the UK could become the Silicon Valley of batteries. We are certainly going to need them.
The first year of the new Labour government is crucial if the elusive growth is going to be achieved – because the government is relying on it to pay for their other plans. If they fail, and bet their entire budget on big projects that fall behind schedule, they will fail to meet their own 2030 targets. But they will also create an opening for the far right. Maybe its time to stop watching government fail and start joining in. In the spirit of helping our country succeed we should all approach our energy problem as something we can help solve.
Maybe you know of an unbuilt housing estate next to your village – or your suburb – one of many that is waiting for the grid to hook them up. Maybe you live in an area with unstable grid connections. You could join with other local residents and start your own power company. Its actually not that hard. And if the residents are all paying the normal bill averaging £1500 a year, then they have that money to invest. If the government or GBE set up a fund to co-invest with small community power, and made sure the funds were accessible to ordinary people without lawyers and lobbyists to back them up, then who knows what local growth might emerge?
This is a shortened version of a talk at Green Gathering, Chepstow UK, 3rd August 2024
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