Wind, coal proposal advocates square off

Great British Energy could cut UK electricity costs via public ownership, investing in clean energy like wind, solar, tidal, and nuclear, curbing windfall profits, stabilizing bills, and reinvesting returns through a state-backed generator.

Key Points

A proposed state-backed UK generator investing in clean power to cut costs and return gains to taxpayers.

✅ Publicly owned investment in wind, solar, tidal, and nuclear

✅ Cuts electricity bills by reducing generators' windfall profits

✅ Funded via bonds or asset buyouts; non-profit operations

A publicly owned electricity generation firm could save Britons nearly £21bn a year, according to new analysis that bolsters Labour’s case to launch a national energy company if the party gains power.

Thinktank Common Wealth has calculated that the cost of generating electricity to power homes and businesses could be reduced by £20.8bn or £252 per household a year under state ownership, according to a report seen by the Guardian.

The Labour leader, Keir Starmer, has committed to creating “a publicly owned national champion in clean energy” named Great British Energy.

Starmer is yet to lay out the exact structure of the mooted company, although he has said it would not involve nationalising existing assets, or become involved in the transmission grid or retail supply of energy.

Starmer instead hopes to create a state-backed entity that would invest in clean energy – wind, solar, tidal, nuclear, large-scale storage and other emerging technologies – creating jobs and ensuring windfalls from the growth in low carbon power feed back to the government.

The Common Wealth report, which analysed scenarios for reforming the electricity market, said that a huge saving on electricity costs could be made by buying out assets such as wind, solar and biomass generators on older contracts and running them on a non-profit basis. Funding the measure could require a government bond issuance, or some form of compulsory purchase process.

Last year the government attempted to get companies operating low carbon generators, including nuclear power plants, on older contracts to switch to contracts for difference (CfD), allowing any outsized profits to flow back to taxpayers. However, the government later decided to tax eligible firms through the electricity generator levy instead.

The Common Wealth study concluded that a publicly owned low carbon energy generator would best deliver on Britain’s climate and economic goals, would eliminate windfall profits made by generators and would cut household bills significantly.

MPs and campaigners have argued that Britain’s energy companies should be nationalised since the energy crisis, even as coal-free records have multiplied and renewables still need more support, which has resulted in North Sea oil and gas producers and electricity generators making windfall profits, and a string of retail suppliers collapsing, costing taxpayers billions. Detractors of nationalisation in energy argue it can stifle innovation and expose taxpayers to huge financial risks.

Common Wealth pointed out that more than 40% of the UK’s offshore wind generation capacity was publicly owned by overseas national entities, meaning the benefits of high electricity prices linked to the war in Ukraine had flowed back to other governments.

The study found the publicly owned generator model would create more savings than other options, including a drive for voluntary CfDs; splitting the generation market between low carbon and fossil fuel sources at a time when wind and solar have outproduced nuclear, and a “single buyer model” with nationalised retail suppliers.

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Pickering nuclear refurbishment will modernize Ontario's Candu reactors at Pickering B, sustaining 2,000 MW of clean electricity, aiding net-zero goals, and aligning with Ontario Power Generation plans and Canadian Nuclear Safety Commission reviews.

Key Points

An 11-year overhaul of Pickering B Candu reactors to extend life, keep 2,000 MW online, and back Ontario net-zero grid.

✅ 11-year project; 11,000 annual jobs; $19.4B GDP impact.

✅ Refurbishes four Pickering B Candu units; maintains 2,000 MW.

✅ Requires Canadian Nuclear Safety Commission license approvals.

The Ontario government has announced its intention to pursue a Pickering refurbishment at the venerable nuclear power station, which has been operational for over fifty years. This move could extend the facility's life by another 30 years.

This decision is timely, as Ontario anticipates a significant surge in electricity demand and a growing electricity supply gap in the forthcoming years. Additionally, all provinces are grappling with new federal mandates for clean electricity, necessitating future power plants to achieve net-zero carbon emissions.

Todd Smith, the Energy Minister, is expected to endorse Ontario Power Generation's proposal for the plant's overhaul, as per a preliminary version of a government press release.

The renovation will focus on four Candu reactors, known collectively as Pickering B, which were originally commissioned in the early 1980s. This upgrade is projected to continue delivering 2,000 megawatts of power, equivalent to the current output of these units.

According to the press release, the project will span 11 years, create approximately 11,000 annual jobs, and contribute $19.4 billion to Ontario's GDP. However, the total budget for the project remains unspecified.

The project follows the ongoing refurbishment of four units at the nearby Darlington nuclear station, which is more than halfway completed with a budget of $12.8 billion.

The proposal awaits the Canadian Nuclear Safety Commission's approval, and officials face extension request timing considerations before key deadlines.

The Commission is also reviewing a prior request from OPG to extend the operational license of the existing Pickering B units until 2026. This extension would allow the plant to safely continue operating until the commencement of its renovation, pending approval.

Ontario's Ambitious Nuclear Strategy

The announcement regarding Pickering is part of Ontario's broader clean energy plan for an unprecedented expansion of nuclear power in Canada.

Last summer, the province announced its intention to nearly double the output at Bruce Power, currently the world's largest nuclear generating station.

Additionally, Ontario revealed SMR plans to construct three more alongside the existing project at Darlington. These reactors are expected to supply enough electricity to power around 1.2 million homes.

Discussions about revitalizing the Pickering facility began in 2022, after the station had been slated to close as planned amid debate, with Ontario Power Generation submitting a feasibility report to the government last summer.

The Ford government emphasized the necessity of this nuclear expansion to meet the increasing electricity demands anticipated from the auto sector's shift to electric vehicles, the steel industry's move away from coal-fired furnaces, and the growing population in Ontario.

Ontario's capability to attract major international car manufacturers like Volkswagen and Stellantis to produce electric vehicles and batteries is partly attributed to the fact that 90% of the province's electricity comes from non-fossil fuel sources.

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Electric power market crisis highlights grid reliability risks as coal and nuclear retire amid subsidies, mandates, and cheap natural gas; intermittent wind and solar raise blackout concerns, resilience costs, and pricing distortions across regulated markets.

Key Points

Reliability and cost risks as coal and nuclear retire; subsidies distort prices; intermittent renewables strain grid.

✅ Coal and nuclear retirements reduce baseload capacity

✅ Subsidies and mandates distort market pricing signals

✅ Intermittent renewables increase blackout and grid risk

Is anyone paying any attention to the crisis that is going on in our electric power markets?

Over the past six months at least four major nuclear power plants have been slated for shutdown, including the last one in operation in California. Meanwhile, dozens of coal plants have been shuttered as well — despite low prices and cleaner coal. Some of our major coal companies may go into bankruptcy.

This is a dangerous game we are playing here with our most valuable resource — outside of clean air and water. Traditionally, we've received almost half our electric power nationwide from coal and nuclear power, and for good reason. They are cheap sources of power and they are highly resilient and reliable.

The disruption to coal and nuclear power wouldn't be disturbing if this were happening as a result of market forces. That's only partially the case.

#google#

The amazing shale oil and gas revolution is providing Americans with cheap gas for home heating and power generation. Hooray. The price of natural gas has fallen by nearly two-thirds over the last decade and this has put enormous price pressure on other forms of power generation.

But this is not a free-market story of Schumpeterian creative destruction. If it were, then wind and solar power would have been shutdown years ago. They can't possibly compete on a level playing field with $3 natural gas.

In most markets solar and wind power survive purely because the states mandate that as much as 30 percent of residential and commercial power come from these sources. The utilities have to buy it regardless of price, even as electricity demand is flat in many regions. What a sweet deal. The California state legislature just mandated that every new home spend $10,000 on solar panels on the roof.

Well over $100 billion of subsidies to big wind and big solar were doled out over the last decade, and even with the avalanche of taxpayer subsidies and bailout funds many of these companies like Solyndra (which received $500 million in handouts) failed, underscoring why a green revolution hasn't materialized as promised.

These industries are not anywhere close to self sufficiency. In 2017 amid utility trends to watch the wind industry admitted that without a continuation of a multi-billion tax credit, the wind turbines would stop turning.

This combines with the left's war on coal through regulations that have destroyed coal plants in many areas. (Thank goodness for the exports of coal or the industry would be in much bigger trouble.)

Bottom line: Our power market is a Soviet central planner's dream come true and it is extinguishing our coal and nuclear industries.

Why should anyone care?

First, because government subsidies, regulations and mandates make electric power more expensive. Natural gas prices have fallen by two-thirds, but electric power costs have still risen in most areas — thanks to the renewable mandates.

More importantly, the electric power market isn't accurately pricing in the value of resilience and reliability. What is the value of making sure the lights don't go off? What is the cost to the economy and human health if we have rolling brownouts and blackouts because the aging U.S. grid doesn't have enough juice during peak demand.

Politicians, utilities and federal regulators are shortsightedly killing our coal and nuclear capacities without considering the risk of future energy shortages and power disruptions. Once a nuclear plant is shutdown, you can't just fire it back up again when you need it.

Wind and solar are notoriously unreliable. Most places where wind power is used, coal plants are needed to back up the system during peak energy use and when the wind isn't blowing.

The first choice to fix energy markets is to finally end the tangled web of layers and layers of taxpayer subsidies and mandates and let the market choose. Alas, that's nearly impossible given the political clout of big wind and solar.

The second best solution is for the regulators and utilities to take into account the grid reliability and safety of our energy. Would people be willing to pay a little more for their power to ensure against brownouts? I sure would. The cost of having too little energy far exceeds the cost of having too much.

A glass of water costs pennies, but if you're in a desert dying of thirst, that water may be worth thousands of dollars.

I'll admit I'm not sure what the best solution is to the power plant closures. But if we have major towns and cities in the country without electric power for stretches of time because of green energy fixation, Americans are going to be mighty angry and our economy will take a major hit.

When our manufacturers, schools, hospitals, the internet and iPhones shut down, we're not going to think wind and solar power are so chic.

If the lights start to go out five or 10 years from now, we will look back at what is happening today and wonder how we could have been so darn stupid.

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IAEA Nuclear Reactor Simulators enable virtual nuclear power plant training on IPWR/PWR systems, load-following operations, baseload dynamics, and turbine coupling, supporting advanced reactor education, flexible grid integration, and low-carbon electricity skills development during remote learning.

Key Points

IAEA Nuclear Reactor Simulators are tools for training on reactor operations, safety, and flexible power management.

✅ Simulates IPWR/PWR systems with real-time parameter visualization.

✅ Practices load-following, baseload, and grid flexibility scenarios.

✅ Supports remote training on safety, controls, and turbine coupling.

Students and professionals in the nuclear field are making use of learning opportunities during lockdown made necessary by the Covid-19 pandemic, drawing on IAEA low-carbon electricity lessons for the future.

Requests to use the International Atomic Energy Agency’s (IAEA’s) basic principle nuclear reactor simulators have risen sharply in recent weeks, IAEA said on 1 May, as India takes steps to get nuclear back on track. New users will have the opportunity to learn more about operating them.

“This suite of nuclear power plant simulators is part of the IAEA education and training programmes on technology development of advanced reactors worldwide. [It] can be accessed upon request by interested parties from around the world,” said Stefano Monti, head of the IAEA’s Nuclear Power Technology Development Section.

Simulators include several features to help users understand fundamental concepts behind the behaviour of nuclear plants and their reactors. They also provide an overview of how various plant systems and components work to power turbines and produce low-carbon electricity, while illustrating roles beyond electricity as well.

In the integral pressurised water reactor (IPWR) simulator, for instance, a type of advanced nuclear power design, users can navigate through several screens, each containing information allowing them to adjust certain variables. One provides a summary of reactor parameters such as primary pressure, flow and temperature. Another view lays out the status of the reactor core.

The “Systems” screen provides a visual overview of how the plant’s main systems, including the reactor and turbines, work together. On the “Controls” screen, users can adjust values which affect reactor performance and power output.

This simulator provides insight into how the IPWR works, and also allows users to see how the changes they make to plant variables alter the plant’s operation. Operators can also perform manoeuvres similar to those that would take place in the course of real plant operations e.g. in load following mode.

“Currently, most nuclear plants operate in ‘baseload’ mode, continually generating electricity at their maximum capacity. However, there is a trend of countries, aligned with green industrial revolution strategies, moving toward hybrid energy systems which incorporate nuclear together with a diverse mix of renewable energy sources. A greater need for flexible operations is emerging, and many advanced power plants offer standard features for load following,” said Gerardo Martinez-Guridi, an IAEA nuclear engineer who specialises in water-cooled reactor technology.

Prospective nuclear engineers need to understand the dynamics of the consequences of reducing a reactor’s power output, for example, especially in the context of next-generation nuclear systems and emerging grids, and simulators can help students visualise these processes, he noted.

“Many reactor variables change when the power output is adjusted, and it is useful to see how this occurs in real-time,” said Chirayu Batra, an IAEA nuclear engineer, who will lead the webinar on 12 May.

“Users will know that the operation is complete once the various parameters have stabilised at their new values.”

Observing and comparing the parameter changes helps users know what to expect during a real power manoeuvre, he added.

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Ontario Hydrogen Strategy accelerates green hydrogen via electrolysis, reduced electricity rates, and IESO pilots, leveraging ICI, interruptible rates, and surplus power to grow clean tech, low-carbon energy, and export markets across Ontario.

Key Points

A provincial plan to scale green hydrogen with electricity costs, IESO pilots, and surplus power to boost tech.

✅ Amends ICI to admit hydrogen producers from 50 kW demand

✅ Enables co-located electrolysers to use surplus curtailed power

✅ Offers interruptible rates via IESO pilot for flexible loads

The Ontario Ministry of Energy is seeking input on accelerating Ontario’s hydrogen economy. The province has been promoting growth in the clean tech sector, including low-carbon energy production and the Hydrogen Innovation Fund, as an avenue for post-COVID-19 economic recovery. Hydrogen produced through electrolysis (or “green hydrogen”) has been central to these efforts, complimenting both federal and provincial initiatives to create vibrant domestic and export markets for the energy as a principal alternative to conventional fossil fuels.

On April 14, 2022, the Ministry filed a proposal (the Proposal) on the Environmental Registry of Ontario (ERO) to gather input from stakeholders, aligning with the province’s industrial electricity pricing consultation underway. As part of Ontario’s Hydrogen Strategy, the Ministry is considering several options that would provide reduced electricity rates for green hydrogen producers to make production more economically competitive with other energies. To date, the relatively high production cost of green hydrogen has been a challenge facing its adoption, both domestically and internationally.

The Proposal features three options:

• Amending the rules for the Industrial Conservation Initiative (ICI) applicable to hydrogen producers;
• Enabling onsite hydrogen production using electricity that would otherwise be curtailed; and
• Providing an interruptible electricity rate for hydrogen producers.

Option 1: Amending the ICI rules

Option 1 would amend the ICI rules to allow all hydrogen producers with an average monthly peak demand of 50kW to participate. Hydrogen producers’ facilities could qualify for ICI in the first year of operation with a peak demand factor determined based on a deemed consumption profile, using a method yet to be determined by the Ministry. At the end of the first year, their global adjustment (GA) charges would be reconciled based on their actual consumption pattern. As set out in our prior article, GA was introduced by the province in January 2005 to ensure reliable, sustainable and a diverse supply of power at stable and competitive prices, aligning with plans to rely on battery storage to meet rising energy demand. The Ministry’s current proposal would require hydrogen producers to place a security deposit for their facilities’ first year of operation with the Independent Electricity System Operator (IESO) or their Local Distribution Company (LDC) to ensure other consumer would not be adversely affected.

Option 2: Enable onsite hydrogen production using surplus electricity

Option 2 would allow businesses to co-locate hydrogen electrolysers at electricity generation facilities, drawing on recent electrolyzer investment trends, to make use of what would become curtailed generation. Under this option in the Proposal, the developer for the hydrogen production facility would be required to be a separate legal entity from the one that owns or operates the electricity generation facility. Based on this required level of independence, the hydrogen developer would be required to pay the electricity generator for the electricity supply.

At this stage, it is not clear whether, or how the generator would be required to share the revenue with other consumers. The next steps of the Proposal may require regulatory amendments, and/or amendments to electricity generator’s contracts, consistent with efforts enabling storage in Ontario's electricity system to integrate flexible resources.

Option 3: Interruptible electricity rates for hydrogen producers

In 2021, the Ministry posted a proposal on the ERO including an Interruptible Rate Pilot that was to be developed in conjunction with the IESO in order to address stakeholder feedback received during the 2019 Industrial Consultation specific to the challenges of identifying and responding to peak demand events while participating in the ICI. The pilot was targeted towards large electricity consumers, where participants were charged GA at a reduced rate in exchange for agreeing to reduce consumption during system or local reliability events, as identified by IESO.

Option 3 would allow for the introduction for a dedicated stream for hydrogen producers into the interruptible rate pilot, which is currently under development with the IESO. This would take into account the unique circumstances of hydrogen producers, as well as the importance of the hydrogen sector in Ontario’s Low-Carbon Hydrogen Strategy. Under the pilot, participants would be given advance notice by the IESO to reduce demand over a fixed number of hours, several times each year, and emerging vehicle-to-grid models where EV owners can sell electricity back to the grid highlight additional flexibility options. Ultimately, the pilot would support low-carbon hydrogen production by offering large electricity consumers, such as hydrogen producers, reduced electricity rates in exchange for reduces consumption during system or local reliability events.

Following this initial development work, the Ministry intends to consult with stakeholders later this year to determine design details, as well as the timing for the potential roll out of the proposed pilot.

Key takeaways

The design options are not meant to be mutually exclusive, and might be pursued by the Ministry in combination. Ultimately, Ontario is focusing on ways to reduce electricity rates in an attempt to make the province a leader in the adoption of green hydrogen, as made clear in the Ontario Hydrogen Strategy, even as an electricity supply crunch looms, underscoring the urgency. Stakeholders will want to participate in this process given its long-term implications for both the hydrogen and power sectors.

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UK power grid bottleneck is stalling renewable energy, with connection queues, planning delays, and transmission infrastructure gaps raising costs, slowing decarbonization, and deterring investment as government considers reforms led by a new chief adviser.

Key Points

Delays and capacity gaps that hinder connecting new generation and demand, raising costs and slowing decarbonization.

✅ Connection queues delay projects for years

✅ Planning and NIMBY barriers stall transmission builds

✅ Investment costs on bills risk political pushback

During his three decades at investment bank Morgan Stanley, Franck Petitgas developed a reputation for solving problems that vexed others. Fixing the UK’s creaking power grid could be his most challenging task yet.

Earlier this year, Prime Minister Rishi Sunak appointed Petitgas as his chief business adviser, and the former financier has been pushing to tackle the gridlock that’s left projects waiting endlessly for a connection, an issue he sees as one of the biggest problems for industry.

But there are no easy solutions to tackle the years-long queue to get on the grid or the drawn-out planning process for building clean power generation, with the energy transition stalled by supply delays compounding the problem. And sluggish progress in expanding and improving the electricity network is preventing the construction of new housing developments and offices, as well as slowing the transition to greener power.

That transition has already taken a knock after Sunak last week controversially watered down some of the UK’s climate ambitions, citing in part the cost to consumers. He also acknowledged the issues surrounding the grid and promised the “most transformative plans” in response, drawing on lessons from Europe’s power crisis where applicable. Those are due to be unveiled within weeks. 

Shortly after his appointment, Petitgas offered reassurances to business leaders at a meeting in Downing Street that solutions were being worked on, according to people familiar with the matter. But there’s a lack of confidence across business that enough will be done.

Cost is a big factor in the expansion of the electricity grid, and some argue a state-owned generation model could ease bills over time. Improving the onshore network alone could require investment of between £100 billion and £240 billion ($122-$293 billion) by 2050, according to a government analysis last year. 

With network expansion funded through power bills, that’s a big ask, particularly with Sunak trailing in polls ahead of an election expected next year.

“It’s very difficult for politicians to say more money should be on bills,” said Emma Pinchbeck, chief executive of Energy UK, a trade body. “So you get to a situation where no one wants to pay for the infrastructure investment until it’s really sticky, and that’s where we’ve got to with the grid.”

There are huge competitive and economic implications if the UK falls further behind. With US President Joe Biden spending an estimated $370 billion on climate measures through his Inflation Reduction Act, and China already a world leader in electric vehicles, Britain’s grid inaction is holding it back in the global race to decarbonize, said Jess Ralston, an analyst at the Energy and Climate Intelligence Unit think tank.

“The UK is dithering and delaying, and not making any strategic decisions,” she said. “You can see companies just saying ‘I’m going to the US, or I’m going to China’.” 

In a statement, the government said it’s a “priority to speed up the time taken to connect new power generators and power consumers to the grid.” It added that it’s taking “significant steps to accelerate grid infrastructure,” including support for new Channel interconnectors announced this year.

The government expects demand for electricity to double by 2035 and that will mean more generation that needs to be linked up to the network by cables and pylons. Local grids will also have to expand to accommodate more connection points for electric vehicles and homes, and invest in large-scale energy storage capacity to balance supply.

But so far, the rapid rise in renewable energy investment has not been accompanied by matching spend on the power network, according to BloombergNEF, a pattern seen in Germany’s grid expansion woes as well.

“The pace and scale of what we now have to deliver is significantly different from the last few decades,” said Carl Trowell, president of UK strategic infrastructure at National Grid. “It’s a national endeavor.”

In June, Electricity Networks Commissioner Nick Winser sent the government recommendations for how to accelerate construction of more transmission infrastructure. He said efforts to decarbonize the power sector will be “wasted if we cannot get the power to homes and businesses.”

“We need a seriously stronger sense of urgency,” said Kevin O’Donovan, country manager for Statkraft UK, which is holding off investment in four wind farms and two solar projects due to grid connection delays.

In addition to cost, the other major stumbling block is planning. Politicians in the governing Conservative Party are wary of angering voters with new infrastructure in rural areas that typically vote Tory. Across the country, “Not In My Back Yard” campaigners – NIMBYs — pose a major challenge to projects.

Petitgas, 62, retired from Morgan Stanley last year after nearly 30 years at the bank, where he led its international division from London. The issues over connections and planning have been repeatedly pointed out to Petitgas by investors and trade groups over a series of meetings this year, according to people familiar with the matter, requesting anonymity discussing private talks.

Yet with a general election looming and the issue plagued by political headaches, many are skeptical that Sunak can find the solutions needed.

One business chief said Downing Street considers the issue too tricky and expensive to tackle in the short-term. Others are concerned that while Petitgas has license from Sunak, he doesn’t have influence across the relevant departments to get grids to the top of the agenda.

Wind Farms

Multiple parts of the UK’s climate plans are under pressure. Earlier this month, an auction for contracts to build new wind farms received zero bids from developers, even as wind leads the power mix in many regions, marking yet another green setback. 

The UK is already behind on its target of having 50 gigawatts of offshore wind built by 2030, up from 14 GW today. The challenge is accelerating development without railroading local communities.

Within Sunak’s Conservative Party, some lawmakers are pushing back on new infrastructure in their local areas. A group including Environment Secretary Therese Coffey and former Home Secretary Priti Patel is campaigning against building new pylons across a stretch of eastern England.

According to Adam Bell, director of policy at consultancy Stonehaven, backbench pressure means Sunak is unlikely to take major action on the grid in the near term. He doesn’t see the prime minister accepting Winser’s recommendations, least of all accelerating planning decisions.

“Over the last year, Sunak has favored party management over things that will benefit the country,” Bell said. 

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