China Investing Billions in Coal Production, UK Turns the Lights Out

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China may be investing billions of dollars in coal production as we reported earlier this morning, but my poor colleague Stuart may find himself sitting in the dark in the UK! According to some new government projections it appears as though the UK will not have enough power from the national grid by 2017. At first blush that may appear a long way off but given that by 2015, nine oil and coal fired plants will be closed due to a pollution cutting EU directive, and the Labour Party failing to give the green light to any new power generation from nuclear power stations combined with a 40% mandate that the UK’s electricity must come from clean coal/nuclear/renewable energy mandate and anyone can see (even with the lights off) that Britain will face blackouts!

Here are a few stats from the Telegraph article:

  • By 2017, the energy unserved level will reach 3000 MW hours per year (the article makes the analogy to all of Nottingham going without power for one day)
  • By 2025, the energy unserved level rises to 7000 MW hours per year or half the country going without power for one hour per day
  • One third of the power needs to be replaced

Government mandates that establish targets but fail to provide the incentives, financing and approvals necessary to both replace current generating capacity as well as create the infrastructure for new capacity represent nothing more than failed public policy. Here in the US, the Waxman-Markey bill, otherwise known as Cap and Trade, requires, any electricity provider who supplies over 4 million MWh to produce 20 percent of its electricity from renewable sources (such as wind, solar, and geothermal) by 2020. Here is my question, will those energy providers also resort to blackouts if they can’t achieve the targets?  Me thinks we have a new form of supply risk.

In the meantime, we’ll be taking up a candle collection for Stuart. Donations anyone?

–Lisa Reisman

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