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Thanks to its ludicrous wind rush, Britain is reeling with a combination of skyrocketing power prices and a grid on the brink of total collapse:

Another Wind Power Collapse has Britain Scrambling to Keep its Lights On (Again)

Now, in the mother of all ironies, Brits are turning to the most inefficient and costly to run source of commercial power generation there is: diesel generators. Not, as it turns out, that they have much choice in the matter.

UK turns to diesel to meet power supply crunch
Financial Times
Kiran Stacey
3 November 2015

Britain is set to grant hundreds of millions of pounds in subsidies to highly polluting diesel generators as a way to help solve the energy supply crunch facing the country over the next 15 years.

Analysis of publicly available figures shows that companies have registered to build a total of about 1.5 gigawatts of diesel power under a government scheme to encourage back-up energy for the grid. The figures have been analysed by the Financial Times and experts at both the Institute of Public Policy Research and Sandbag, an environmental think-tank.

If all of those registered are successful in their bids — which analysts believe is likely — it could cost the taxpayer £436m, provide enough energy to power more than 1m homes and emit several million tonnes of carbon a year.

The subsidies on offer are so appealing that even solar-power developers, which have recently had their own subsidies cut, are building diesel generation on their sites as a way of maximising their returns. Lark Energy, a solar-power developer, is bidding for subsidies to build 18MW of diesel generation on its Ellough project in Suffolk, for example.

The UK is facing serious energy-supply difficulties over the next few years as old coal plants are taken offline without new power plants being built to replace them. National Grid, which runs the country’s power network, has predicted that the gap between electricity supply and demand this winter could get as close as 5 per cent — the tightest in a decade.

As part of the solution to that problem, ministers last year decided to start paying electricity providers extra money to make additional capacity available at short notice should the need arise.

They did so by holding an auction where companies bid for those subsidies, which they hoped would encourage gas plants to be built. Instead, it was more successful in giving incentives to other forms of generation such as nuclear power.

This year diesel looks to be one of the main beneficiaries of the process, with 1.5GW of generation having successfully registered for the bidding process.

The collapse in the oil price over the past year has driven down the price of electricity supply, making it uneconomic for companies to build capacity with high capital costs, such as new gas plant.

Dave Jones, power sector expert at Sandbag, said: “All diesel operators have to do is buy in diesel units in shipping containers from China and plug them into a grid connection.

“The low capital cost means that they can undercut things like gas.”

If all of those schemes secure government funding at the same level as last year, it would cost the taxpayer £436m.

According to the International Energy Agency, diesel electricity production emits only slightly less carbon than burning coal, and if the power plants were to run full-time for a year, they would emit 10m tonnes of carbon. They will avoid having to pay for their carbon pollution under the European emissions trading scheme, however, because they are too small to do so.

They would also emit a significant amount of nitrous oxide, though the exact figure is unknown. As a comparison, 1.5GW of power is equivalent to that used by 24,000 Volkswagen Golfs.

Ed Davey, the former energy secretary who set up the scheme, known as the “capacity market auction”, said the problem arose because of EU rules that forbid discriminating against any one type of generation.

Mr Davey told the FT: “At no time when I was secretary of state did people say we were going to get flexible diesel, but I have now heard about large amounts of diesel being preregistered for the auction.

“The government has got to take measures to stop it, because it is extraordinarily counterproductive and absolutely was not what was intended by the capacity auction. We don’t want diesel plants being built anywhere.”

Until last week, many diesel operators expected to be eligible for two types of subsidy: through the capacity auction and via tax breaks granted through a separate enterprise investment scheme.

But ministers have recently decided to close this loophole, writing a clause into the finance bill passing through parliament to ban companies participating in the capacity auction from also claiming these tax advantages.

A wider boom in diesel is also being driven by measures taken by National Grid to encourage industry to cut its power usage. In an attempt to widen the gap between supply and demand this winter, the company has agreed to pay large energy users, such as factories and hospitals, to switch over to back-up generation — much of which is diesel-powered — when necessary.

Doug Parr, chief scientist at Greenpeace, said: “Ministers claim to be helping consumers by cutting support for the cleanest energy sources but are about to force them to pay millions to one of the dirtiest.”

Tim Emrich, chief executive of UK Power Reserve, which owns existing diesel-power generation but now concentrates on gas, called on ministers to halt the auction altogether.

He said: “The only way to avoid this happening is to delay or cancel the 2015 capacity market auction. The government needs to ensure that we as taxpayers are buying the right kind of generation for the future . . .  not wasting Treasury incentives on the diesel generation of the past.”

A spokesperson for the energy department said: “Small-scale flexible generation, such as diesel, has a small but important role to play in securing our electricity system. It responds quickly, doesn’t have to warm up and is run for short periods, so emission impacts are limited.”
Financial Times

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There’s only one reason that Britain is about to spend 100s of £millions on diesel generation; and that’s to cover routine, total and totally unpredictable wind power output collapses.

On that score, STT notes a particularly valiant effort from former wind industry front man, Ed Davey – with his suggestion that “At no time when I was secretary of state did people say we were going to get flexible diesel” and that diesel generation “was not what was intended by the capacity auction. We don’t want diesel plants being built anywhere”.

You see, Ed is well and truly on the hook for the debacle that is Britain’s energy ‘policy’; and the claim that he didn’t see the need for diesel coming is utter bunkum.

James Delingpole was all over it more than 2 years ago, at a time when Davey was top banana at the DECC, and fully aware of the diesel roll-out that was on in earnest, way back then:

Delingpole On Fire: Exposes $Billions Spent on Diesel Generators for Wind Power Backup

No, Ed’s political legacy has left Britain facing the choice between millions of highly inefficient diesel generators, costing taxpayers and power consumers £billions to subsidise, set up and run; or a whole lot more candlelit, cold baked bean dinners.