UK Secretary of State for Energy and Climate Change, Rt Hon Chris Huhne MP, recently acknowledged that Electricity Market Reform (EMR) in the UK will be a difficult, but necessary endeavour. Change is needed. The current market relies too heavily on fossil fuel imports and leaves the country vulnerable to price shock as global energy demands escalate.
But investing to replace ageing power plants and meet ambitious emissions targets - Huhne noted that the equivalent of 20 new stations must be built to replace old facilities incapable of meeting tomorrow's standards - is not the only solution, especially at a price of £110 billion. Additional options should be considered.
At GE, we agree that investments to make electrical infrastructure more efficient is key. Proven, reliable and flexible technology is available for use today along the energy value chain. That includes adopting a strategy of supply-side efficiency, not just the demand-side variety that places much of the burden on consumers, who may not be able to quickly change their energy habits. Supply-side strategies -focused on generating and distributing electricity - prompt us to improve existing infrastructure for electricity production, in addition to investments in new, more efficient and flexible power plants.
We understand the potential to enhance efficiency and address the Secretary of State's goals of keeping the lights on with fewer carbon emissions, all while providing the best deal for the consumer. Globally, GE equipment provides around one-quarter of the world's electricity - about 200 gigawatts. And in the UK, our equipment supplies around 20 percent (11 gigawatts) of the country's electricity. This means we are uniquely positioned to offer insights grounded in practical, field-tested experience gained through decades of successful operation and maintenance.
DOING MORE WITH LESS
When energy providers make supply-side investments, they dramatically improve performance, reduce emissions, and manage natural resource use - all while ensuring that they maintain their ability to meet power demands.
Supply-side efficiency breeds a new way of thinking by enabling utilities with an interconnected method to assess overall performance through traditional equipment upgrades and retrofits; software; and processes to monitor and diagnose efficiency so that downtime decreases. Utilities, such as RWE npower, which view their facilities as single operating systems instead of individual components, stand to gain the most from supply-side efficiency.
We are working with RWE npower to reduce emissions, improve efficiency and extend the life of its Little Barford power station near St. Neots, Cambridgeshire. The project, the first of its kind in the UK, employs gas-combustion technology that enables a reduction in nitrogen oxide (NOx) emissions by 40 percent. And, it allows the plant to be operated at reduced power during off-peak periods resulting in reduced fuel consumption and lower operating costs.
Better still, solutions and products to support supply-side efficiency are available today, ready to help lower plant emissions, increase reliability and availability of power and help Britain step toward energy independence - all while consumers take control of their personal energy use and contribute toward the country's laudable goal of reducing greenhouse gas emissions 50 percent by 2025.
MOST ENERGY IS NOT CONVERTED TO POWER
Supply-side efficiency opportunities are so bountiful because of what today's electrical generation leaves on the table. According to the International Energy Agency (IEA), approximately 60 percent of energy used is not converted into power during generation - a significant loss when spread across a fleet of power-producing assets. For example, a 1 percentage point efficiency improvement in the European combined-cycle gas turbine (CCGT) fleet could save £430 million per year in fuel savings.
To achieve a similar impact by relying only on consumer actions, nearly 6.8 million households would need to adopt all of the most efficient, commercially available green technologies, regardless of cost. Or we could ask 1.3 million drivers to give up their cars.
ENABLING SMART LIFE EXTENSION AND EMISSION REDUCTION
Supply-side efficiency improvements will increase energy output while decreasing emissions in a cost effective manner. In fact, for every one pound invested in supply-side efficiency globally, it would require three pounds to accomplish the same level of CO₂ reduction via demand-side efficiency efforts, according to the IEA.
Energy costs are rising, and the demand for electricity is expected to double by 2050 in the UK. As demand climbs, we can either build new plants - a costly option few utilities or tax payers can afford to bear, or find ways to improve the existing infrastructure in place through supply-side efficiency solutions.
As such, GE welcomes the current focus on reforms which provides a unique opportunity to promote a secure long-term market for investments and measures to promote supply side efficiency. Plants need to ensure that they are operating as efficiently and cost-effectively as possible in order to deliver cleaner, smarter and more efficient results over the long term.