A Short History of Fuel Substitution in the UK

Guest post by Dr. Alan Jones

Alan Jones is a physicist and engineer who has worked for the BBC and the UK Civil Service. He currently consults for various Commonwealth and British Crown Dependency governments. He is a passionate follower of technology and technology history and understands that context and perspective is key in understanding what’s happening with energy now and what choices we need to make for the future. He volunteers this history of the adoption of natural gas in the UK, with all the attendant lessons relevant to us today.

In the late 18th century the English learnt that coal [town] gas could easily be piped and stored to provide a brilliant light: so it spread quickly wherever coal could be moved by sea, river or canal. With the coming of the railways gas companies [Co‘s] sprang up along their routes. Many Co’s were private or public concerns, others owned by local councils eager to bring gas light to their communities.

The Co’s continued to expand until the 1880’s when they met a check in the electric lamp. They turned to Welsbach’s incandescent mantle which gave as good a light and, since burners could be retrofitted, was much cheaper. But it also used far less gas than an open flame so the Co’s ended up with serious overcapacity at a time when the chemical byproducts of gasification were becoming more valuable than the gas and coke themselves.

Their response was to grow by reaching new customers and providing new uses for gas, beginning with the gas geyser which gave hot water on demand: later followed by the gas cooker, the gas fire for room heating and even the gas refrigerator. By the 1950s they supplied almost all urban and suburban areas of the UK and began to run short of gas so they imported liquefied methane [LNG] by sea to enrich supplies.

By then they had been nationalised, over 1000 Co’s had been merged into regional boards [Boards] with no effective central authority. Whereas electricity had been increasingly regulated to prevent overcapacity by creating the National Grid and finally nationalised under the Central Electricity Generating Board [CEGB] which competed fiercely with gas.

But a new spectre haunted the Boards. that of cheap oil and petrochemicals.  Moreover the CEGB had a successful nuclear programme offering inexpensive off peak power. It was the nightmare of the 1880’s all over again.

Nothing daunted, the Boards answered knowing there were vast reserves of natural gas under the North sea and they had the infrastructure and expertise to distribute it very cheaply. The only question was how to get at it and convert the whole nation to it. So they set up their own joint committee, a very powerful one initially independent of the British government, [HMG], to consider the ways and means.

The Committee reported in 1962 and its views were straightforward and, with hindsight, both trenchant and prescient. They observed:

A] That the oil majors who had the technology to do this saw no profit in gas nor in oil given cheaper fields elsewhere. To induce them to drill the Boards would have to offer them long term contracts at a price which would reward them.

B] That methane had about twice the calorific value of coal gas by volume which would double the capacity of the existing infrastructure: and furthermore under low pressure could be supplied to new customers cheaply  using plastic pipes.

C] That since the Boards already had the necessary expertise the only problem was the sheer scale of the task: not only new pipelines but  also that some 200+ million burners would have to be converted or replaced.

D] Nevertheless they thought this practical if it were done in stages so the methane would reach each region step by step. They estimated complete conversion would take ten years.

 

E]  They assessed the likely overall economic benefit to the economy from cheaper energy as a one off gain of between ten and twenty percent in GDP over the ten years of conversion and might well create growth of half a percent per annum thereafter for many years as new customers came on line.

F] But they also cautioned: ‘No such major change in the energy base of a great industrial power in so short a time has ever been attempted before’.

It has never been attempted since either. But it was done.

HMG accepted the Board‘s report in 1963 and in 1964 the rig Sea Gem struck gas in abundance although due to political turmoil the reorganisation of the industry was not finalised until 1967 when the project was well underway and virtually complete by 1974. By then the first oil shock had sent energy prices soaring but not gas because the enabling Act only provided for a cost plus pricing basis: and the supply contracts were fixed price.

The results were astonishing: wherever and whenever the new gas arrived. Demand for fuel oil and paraffin [kerosene] declined rapidly as boilers were converted to gas. Central coal fired boiler houses, often producing electricity as well as district heating, quickly vanished: it was far cheaper and more efficient to pipe gas directly to where heat was wanted. Electric space heating almost disappeared. Even the mighty CEGB started to explore gas to meet peak loads and later dual phase gas/steam plant.

This latter changed HMG policy, which in the early 1980’s had been that a new generation of nuclear stations would be wanted but only one was built, the CEGB argued successfully that gas/steam stations were far cheaper than nuclear both in terms of capital and fuel cost. Indeed when the utilities were privatised in the 1990’s they opted to replace coal fired stations rapidly in the ’Dash for Gas’.

And still the gas marched on: over the sea to Ireland, North and South, and elsewhere. Its advance was temporarily slowed at the turn of century with HMG imposing taxes, havering about new permissions and such which led to a hiatus and short lived price spikes. But despite this UK consumers still enjoy some of the cheapest gas in Europe even with ‘green’ taxes on it.

Finally and at last, to the dismay of the Greens and their political, business and ‘meeja’ allies, there are signs that HMG is slowly turning back towards a new dash for gas, the UK has reserves for centuries to come, and exploiting them now would end the recession almost at a stroke.

 

© ajgjones 2012 whose moral right is asserted.

8 responses to “A Short History of Fuel Substitution in the UK

  1. One thing that is very important in the understanding of Britain’s energy programme (or lack thereof) is that one of the major drivers of the dash for gas was the government not wanting to be hostage to the miner’s union. The had already brought down one government and their strike in the 80’s was very bitter class warfare.
    There is still that type of decisionmaking. CCGTs are very cheap and fast to build, have very few staff and there is no activist opposition to them. James Hansen has never been arrested near one, for instance.

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  4. ChrisM says……

    Whilst I agree with you HMG’s total lack of energy policy I doubt they had any hand in the dash for gas.It was purely a commercial decision by the private utilities. The miners strike was fading memory, domestic coal production had declined to the point that much coal was imported chiefly from Australia and coal was much more expensive than gas, and keeping coal fired stations on line even more so.

    The base calculation seems to have been was that new gas/steam combined cycle stations would cut the cost of generation per KWhr to less than a half that of coal and given the low capital cost the new stations would repay the investment in under ten years.

    Certainly HMG’s utterly perverse energy policy seems have begun around 2000 with Gordon Brown trying to encourage new exploration and drilling with fine words and much exhortation to the industry whilst imposing tax hikes that made this unprofitable. Unsurprisingly it did not happen.

    Similarly HMG dragged its feet over permissions for increased storage capacity which the gas industry needed to cope with seasonal variation in demand: and also delayed to construction of the new Norwegian interconnector so it came on line a year late with led to shortages and price spikes as the utilities had to import gas at high EU prices to keep the gas flowing. When it did gas prices on the London market fell to zero for a few days.

    Little has changed since then until now what with windmills and all the rest of the Greenie balderdash.

    But quite apart from frakking shale, of which the UK has enormous reserves, and the recent discovery of undersea coal gas beds there is now an apparently successful technique for underground gasification of coal which a certain Australian company is testing off the Welsh coast. This has long been a pipe dream of course but it does seem their technology works, in Australia anyway, and it is telling that private incestment is financing this.

    If successful, which remains to be seen, well the UK has so much inacessible coal to conventional mining but which is to drilling, that the deposits dwarf shale or for that matter conventional gas fields.
    And at last, very tentatively by HMG, there is a political move to exploit the boon of this cornnucopia of cheap energy.

    And with oil prices likely to collapse by the end of the decade subject to Obama et al we should be looking at a prosperous future.

    Kindest Regards .

  5. Jonathan Carr

    I have always felt that burning gas to generate electricity is a shocking waste of a valuable natural asset. The losses of energy incurred by conversion of gas into electricity, the transmission of electricity and its conversion back into heat must account for half or more of the thermal value of the gas. Piped to industry or the home as a direct heat source nearly 100% of that value may be recovered and we have the infrastructure already in place to do so. So generating electricity with gas should be banned and I would support any political party that would do that.

  6. Jonathan

    The problem with your statement is the assumption that the electricity and gas are interchangeable sources of energy. Every country is different, but it is likely that less than 10% of electricity in the UK is used for heat generation. It is only that bit where it is “inefficient”. However, if the electricity generated in a CCGT (at about 52% efficient with 20% line losses) is used to power a heat pump with a Cp of about 4, then the electricity still wins out. Flued gas heaters are often only 85% to 90% efficient because of air changes so that makes electricity look even better.
    If gas is so valuable, would you prefer they burnt coal or built nukes for the power? If you want renewables, are you prepared to have the power go out when it is cold and calm? Or you quite happy to pay 5-6 times current prices and have a countryside/coastline changed beyond recognition to keep the TV going. That is reality.
    Supporting a political party on the basis of one policy is always dodgy.

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