PROFESSOR ANN MUGGERIDGE, PROFESSOR ADAM HAWKES AND PROFESSOR RICHARD GREEN – WRITTEN EVIDECE ESI0040 – UK ENERGY SUPPLY AND INVESTMENT INQUIRY

Timescales for investment in Energy

  1. This evidence comes from academics at Imperial College London. Professor Ann Muggeridge holds the Chair in Subsurface Physics in the Department of Earth Science and Engineering. Professor Adam Hawkes is the Director of the Sustainable Gas Institute and Professor of Energy Systems in the Dept of Chemical Engineering. Professor Richard Green is the Professor of Sustainable Energy Business at Imperial College Business School.
  2. In the context of the need to replace Russian oil and gas by increasing other energy supplies or reducing demand, the following information is relevant. No two projects are identical, and so the figures given below are only averages.
  3. For investment in electricity generation, BEIS and its predecessor departments have published a series of reports on electricity generation costs. These include estimates of typical pre-development periods for each major type of power station. This is the period during which a site would be identified, planning permission secured and financing arranged. For most types of station, this lasts between two and five years. The exception is that utility-scale solar PV arrays can be developed in less than a year; small-scale rooftop panels can be even faster. At the end of the pre-development period, a final investment decision is taken, and construction can start.
  4. The construction for solar PV can be very short (though there may be a lag while panels are ordered, depending on the state of the supply chain). Small-scale anaerobic digestion takes about one year; wind stations typically take two. Larger thermal stations (burning biomass of gas) take three years while pumped storage hydro may take five. A Pressurised Water Reactor (PWR) nuclear station on the scale of Sizewell C would be estimated to take eight years to build. (EdF Energy have stated that they expect Sizewell C to be completed in the early 2030s.)
  5. In written evidence, Rolls-Royce told the committee that they expect the first of their Small Modular Reactors (SMR) to be able to generate electricity in 2031. They state that works on site would take four to five years. They started the Generic Design Assessment (GDA) process in 2021 and expect to complete it in 2025-6. The GDA does not need to be completed for subsequent stations to the same design, but local planning and consenting processes would still be required. Rolls-Royce told the committee on 5 April that an accelerated timetable could see their first SMR generating electricity in 2029, if the government were to commit to ordering a reactor in the next few months, so that they could start off-site manufacturing before the GDA was complete. The figure below assumes that SMR stations would normally have the same five-year pre-development period as other nuclear reactors.
  6. Battery storage projects typically take just over two years from inception to completion, according to Anesco, the market leader for solar and battery storage in the UK. Pre-development and consenting normally takes about a year, investors’ due diligence before the final investment decision about three months, and construction / delivery of the storage units about a year. At present, however, delays in obtaining planning consents, grid connections and supply chain issues mean a typical project might take three years.
  7. Major transmission upgrades are often contentious, requiring public inquiries. The Beauly – Denny line in the Scottish Highlands was announced in 2005, received permission in 2011 and was built between 2012 and 2015. Public consultation on the Viking Link, an interconnector between the UK and Denmark, started in 2016, and the project received the necessary consents by the end of 2018. Contracts were awarded in 2019, and the interconnector should be completed during 2023.  The formal application to build the North Sea Link, connecting the UK and Norway, was made in 2013. Preparatory site works started in 2015 and the link was completed in 2021. The figure below assumes four years of development and consenting work and four years for construction.
  8. To develop a new oil or gas field may take between 5 and 10 years, depending upon the size of the field and its distance from existing infra-structure. A small field near an existing development with spare processing capacity and a pipeline for export of the hydrocarbons may be brought on stream within 6-8 years (e.g. the Solveig field in the NCS, discovered in 2013 with first oil in 2021). Larger fields requiring a new platform and means for export of the hydrocarbons will take longer.  As an example, the Johann Sverdrupp field on the Norwegian Continental Shelf (NCS) was discovered in 2010 and the first oil began to flow in 2019. There are probably very few such large fields still to be discovered on the UK Continental Shelf (UKCS)
  9. Improving recovery from existing oil fields probably provides a greater opportunity than exploring for (and then developing) new fields, given the maturity of the UKCS.  The average recovery factor from existing fields is 40-50%. Recovery can be improved by infill drilling or by Enhanced Oil Recovery (EOR) processes.
    1. Infill drilling can be used to produce pockets of oil that are not drained by existing wells. The timeline for this can be 1-2 years provided that suitable 4D seismic data is available. This comprises approximately 1 year to identify the location and volume of the oil and design the well(s) to drain this oil followed by 3-6 months to drill a well and complete it.
    2. EOR involves injecting a fluid into a reservoir that improves recovery beyond that achieved by a waterflood (the typical recovery process for North Sea fields). A typical timeline for an EOR project is 7-9 years to the first incremental oil recovery. This comprises 1 year to identify the most appropriate EOR fluid (screening), 2 years to evaluate that process and plan the field implementation, a further 2 years to perform pilot tests on the field and another 1-2 years for full field implementation. Additional oil will be produced 1-2 years after the injection of the selected EOR fluid.
  10. Shale gas wells can be developed relatively quickly, in 2-4 years, although the infrastructure to export the gas may take longer. There is also considerable public resistance so obtaining planning permissions may add some years to this time-scale together with the need to develop the network of pipelines to distribute the gas. The producing lifetime of each gas well may also be of the order of 5 years, based on US experience. It should be noted that the geology of shale gas deposits in the UK is considerably more complex than in the USA, and may also contain smaller volumes of gas. These two factors may mean they are not economic to produce.
  11. A liquefied natural gas (LNG) terminal typically takes between four and six years to construct, although capacity was added to the Grain LNG terminal in four phases, each of which took about three years. The pre-development stages, including planning permission, might take up to three years. The Dragon and South Hook terminals in Wales were announced in 2003 and completed in 2009. The companies would have to work on those projects for some time before they were ready to announce, of course.
  12. The fastest way to increase import capacity is to hire an existing FRSU (Floating Regasification and Storage Unit) which is a ship that docks next to the pipeline and regases LNG from an LNG tanker straight into the pipeline. Very little is required to do this other than a conveniently located transmission line. The main barrier here is getting an existing FRSU as many other European countries (in particular, Germany) are also attempting to hire these ships. If we were able to hire a ship that's already built and is suitable for a UK port, it could be onstream in as little as 6 months. If you need to construct a FSRU from scratch, it’s about 3 years (reduces to 1.5 years if converting an existing LNG vessel).
  13. Centrica has submitted an application to convert the Rough gas field (currently producing gas) back to a storage facility. Press reports have suggested that this could be approved and it could start to accept gas inflows in the next few months. A greenfield gas storage facility would take far longer to develop and build; the gas to fill it also has to be purchased.
  14. Home energy efficiency projects can usually be completed in a matter of weeks or months, unless particularly complex.

 

28 June 2022