Go Green: Manx Renewable Pathfinding

DRAFT REPORT

Future renewable needs of the Isle of Man

The Isle of Man government commissioned a Future Energy Scenarios Report [link], there are plenty of details within this report, we however believe our future should not be based upon it.

Reading the report causes people think that switching over to green energy will add an extra £1000 to everyone's bill!, a great way to disenfranchise the population to the positive changes green energy can bring, a green tax they call it. It does not need to be this way, we have our own Pathfinding document to trigger constructive discussions, the green revolution is a positive way to save money and the environment.

Disclaimer: Go Green have no interest in running an offshore wind farm, as a consumer of Manx electricity we want the Manx public to gain value for money going forward.

Current Costs

To put the cost of renewables in perspective, let's look at the current cost of electricity on the Isle of Man, after-all this is the one we need to improve upon.

The MUA commission a yearly report [link] they would like you to think that the on Island Generation costs are 5 - 7p per KWh, this is how they justify the reduction in payback for those with solar PV arrays. We will base our analysis on 2018/19 because let's be frank, the year 2020 with Covid 19, is not representative, oil and gas were practically given away, the days of cheap gas are gone, expect electric bills to rise next year in line with fossil fuel cost rises.

362 GWh / 362,000 MWh /362,000,000 KWh was consumed by the Isle of Man. Looking at the report £10M (generation costs) + £1.6M (gas system costs) + £19M fuel costs = £30M, or 8.2p per KWh. Note distribution costs are excluded, and administration as both these are needed in a renewable future. Yet this is not the full picture, because the cost of the power plant was not taken into account! that has a depreciation of £10M a year, so the cost to the Manx public per generated KWh is 11p, note we also exclude the interest on the current obscene loan the MUA have, the figure would be even higher if that were added on. Here is a chart from the UK with the current levalized costs of power generation in the UK, here in the UK gas is almost 10p per KWh:

Finally any future taxes on carbon emissions, if we look to the EU there are costs of 75 euro per ton of CO2, this applied to our power plant would see it charged around £13 million extra, which equates to an extra 3.5p per KWh.

If you think about it there are over 40,000 homes on the Island, if every home has an average electric bill of £800, heating bill £800 and car fuel bill of £900 a year, then this £100 million (subtract VAT and duty) per year that goes off Island to pay for fuels, a huge sum of money, and this does not take into account commercial usage. A billion pounds over 10 years, this money is literally burnt, on fossil fuels, which are destroying the environment, instead we should be saving money and mother nature. This part is missed on a lot of people, the fact that in a greener future their combined fuel bill should not go up, that is what we advocate.

Concerns About Future Energy Scenarios

What stands out the most, this report has been commissioned to solve the renewable energy problem, to plan options today for net zero in 2050, yet no body can do this, because large scale storage of renewable power at a cost-effective price is not yet commercially viable (battery storage is around $200 per KWh, for large scale storage < $2 per KWh is needed). Instead, the report offers what is possible today, with the obvious price loading and talk of over a billion pounds. Sending the Manx public running for the mountain in panic.

The 2nd issue was with projected EV charging, they estimated 36,000 EVs requiring 160 GWh of power a year, half of all current power usage on the Island, yet this equates to an average millage of 17,600, the reality on the IOM is likely to be under 6K miles, so only 53 GWh is required extra for EVs.

Let's be realistic, forget pie in the sky, biomass plants which will cost a fortune to build, fuel & run, leaving us with another huge debt, no thanks. Forget also the hard to solve problems, we do not need the steam-packet, or airlines to be carbon neutral just yet, pick the low hanging fruit first, the easy wins, work out what is cost effective in the short & medium, for the long term, wait and see.

Begin Pathfinding

Without further a-do here is our steps to a renewable future, with realistic time frames and costings.

Each day 1 million KWh is required to power the IOM, at night there is less draw (30MW), to the peak when people come home and cook in the evening of 75MW.

EVs will mainly charge at night if there is a price incentive to do so, EVs would need 145,000 KWh each day to charge, if 3/4 charge at night 12am - 7am, that is an additional 15MW draw, 45MW in the evenings. Whilst the power generation can take this extra load, the local networks (housing estates) are likely to need mass upgrades.

Power generation, today if the IOM wants bang-for-buck power generation it has to be wind, followed by solar. These contribute 40% of the UK's current yearly generation, only issue with these two are that they are intermittent.

First Priority

Commission an offshore wind farm, aim to supply half the current yearly load, which averages out at 181 GWh / 181,000 MWh: Wind turbines are rated for a maximum output power, the latest 7-8 MW units installed off Walney (which is right next to the proposed IOM location) have a 50% capacity factor, this means an 8 MW turbine will generate 4 MWh averaged over the year (35,000 MWh/yr). With that in mind the IOM would need 5 turbines.

Turbine Costings, multiple sources were checked, this site tends to be on the higher side for projected costings, which we believe would relate more to the IOM, for example here yearly maintenance is £76K / turbine MW, where as we are sure for very large fields it would be half this, also this costing is done at 60 km offshore cable runs, the IOM would be much closer to shore than that. 40MW of turbines would cost £92 million, modern turbines have an expected life of 27 years, giving us a yearly cost of £3.4M + interest + maintenance, for generation of half the current IOM requirements. Green bonds are available, at once in lifetime interest rates of around 1.6%, or £1.4M per year in interest. Maintenance would be £3M / year, we would hope Ramsey would be the service hub for maintaining our turbines.

Total yearly cost: £7.8M to generate the current equivalent of £19M electricity in 2019, including interest.

Wind Turbines are not the full picture when it comes to renewable energy, as their output is intermittent. A method of balancing the grid is required, those 5 turbines could be powering the grid 100%, then an hour later the wind has dropped off, it is this transition time that requires managing, allowing the existing power plant to spin up it's turbines and take over. For this task a large utility battery can take much strain off the power plant, a 30MW battery plant would be a good start.

Current costing for utility batteries are £5M ($200 / KWh) + site and generation / control equipment, around £10M all in, the batteries would have a life of 10 years, so over 20 years would cost £15M + interest (£250K), a total cost of £1M a year for 30MW utility grid battery balancing.

It should be the Manx public who own the turbines and batteries, not BP, or EDF energy, that would only add an extra 10%+ to everyone's bills, no thanks, not when large scale green bonds are 1.6%.

Who pays for all this? we were adamant that renewables should not load the Manx public electric bills: in 2018-2019 Manx Utilities paid £25 million for gas used in the power plant (2019-2020 was pandemic year and gas prices were unlike the previous decade), if 40MW of wind turbines will remove half this cost (£12.5m) yet only cost £8.8m a year (including battery), that is a yearly saving of £3.7m, which with inflation would ensure the capitol of any bond would pay for its self over the 27 year life of the turbine. It would cost us nothing to switch over to renewables, yet over those 27 years would stop 3 million tons of CO2 from being released, this represents a drop of 15% of total Manx CO2 emissions.

Second Priority

Already the IOM is 50% energy carbon neutral, expansion of renewables can be planned, not only as more electric cars are added and electric home heating becomes more common, 70% should be achievable with the CCGT as a renewable backup. However a brick wall will be reached, that is battery storage is expensive and long term the IOM needs to be able to have not a gas power plant to pickup the slack when the renewables reduce in power (after all it is not inconceivable to have a whole month without wind), solar would balance that for the brighter months of the year, but it still comes down to needing something in storage which can power the island for a month: 30,000 MWh of battery storage would cost £6 billion at todays prices. Hence the point early on, not to even plan this stage, because it is an evolving area, it could be a smaller power plant running off stored hydrogen is the future, or even large scale heated silica, (sand heated to 1200oC) the expected costing of such is $2 per KWh, which would still be a £40M investment, but one we do not need to make just yet.

70% is a good goal, it allows the electric usage on the Island to expand, more EVs, more home heating from ASHPs, and renewables could be added to to match this extra demand, whilst keeping this long term storage issue at bay until affordable technology is available.

Time Critical

Whilst the wait and see approach is the most cost effective, in 2032 the existing CCGT power plant is expected to retire, a decade is a long time off, but for large scale infrastructure projects it is not a long time, ideally the replacement would be planned now. However as already stated it is not cost effective at this time to plan a renewable replacement of the CCGT power plant. There are various options here: to investigate the costs and suitability of extending the life of the CCGT, or to install an additional interconnector to the UK adding redundancy to the existing interconnector allowing the power plant to retire. Placing energy security and electric price fluctuations in the hands of a foreign entity must be considered with caution. When there is a renewable shortage then prices can surge, UK September 2021 prices were £1.75 per KWh! the Manx public could be exposed to such volatility.

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