Tom Griffin @[email protected]

You cannot buy a new gas turbine until 2030. Order books at GE, Siemens, and Mitsubishi stretch to 2029. Turbine prices have nearly tripled since 2019. Every AI data center needs power and every gas plant needs a turbine. And every turbine has one part that bottlenecks the entire industry: The blade. It has to survive in gas 500°C above the melting point of the metal it's made from and spin at up to 20,000 RPM under 10,000 g of centrifugal force. Each blade is grown as a single crystal of nickel superalloy, pulled through a vacuum furnace at 3 mm per minute. A set of blades costs $600,000 and takes 90 weeks to grow. The same metallurgy powers modern jet engines. Only 3 companies on Earth can build one. China spent $42 billion trying to catch up. They bought a Russian fighter engine, took it apart, and copied every part. Their copy ran 30 hours between overhauls versus 400 for the original. Modern Western engines run 4,000. You can reverse engineer the shape of a turbine blade. You cannot reverse engineer 60 years of metallurgy.

It’s almost 25 years since a U.K. Prime Minister won a majority in a general election and served a full term in office. That was Tony Blair in June 2001. No Prime Minister has managed it since. Quite staggering. /1

🔥NEW - buried in the bundle of documents from the Humble Address Keir Starmer was advised by the cabinet secretary Simon Case to do security clearance BEFORE appointment but ignored the suggestion. Case said (If you want a political appointment) "you should give us the name of the person you would like to appoint and we will develop a plan for them to acquire the necessary security clearances and do due diligence on any potential Conflicts of Interest or other issues of which you should be aware *before* confirming you choice" Which feels quite material .....

It’s actually pretty complicated. Every mechanism for breaking the link has some drawbacks. All of them would prob result in more gas in the system for longer. Thoughts here. Perhaps the most consequential announcement to come out of the Chancellor's IMF visit was her determination to lower energy bills for consumers by breaking the link between the prices of gas and electricity.  The UK's current energy pricing model means that the last unit of electricity added to the grid so that supply and demand match at any given time sets the price for the whole market.  More often than not, that last bit of supply comes from gas fired power stations - meaning that when gas prices are high, like now, energy prices across the board are high even though large amounts of it are being generated more cheaply by wind and solar.  Cutting this link is not easy as gas is still the fall back option which underpins the whole systems resilience. It can be scaled up or down easily, it works when the sun doesn't shine and the wind doesn't blow.  During the last energy crisis in 2022, Spain operated a mechanism that capped gas prices for the purpose of calculating electricity prices and paid gas generators a subsidy to make up the difference between the cp and the real price.  IIt lowered electricity prices by 20-30% but it came at a cost of a government subsidy to the gas providers so they didn't exit the market leaving the system vulnerable.  That subsidy was recouped with levies on bill payers. So the cost of gas wasn't removed from the system - it was subsidised.  This had the effect of actually increasing gas usage. Also, Spain uses hardly any gas compared to the UK, so the cost of subsidies would be much higher in the UK.  There are alternative systems. For example you could offer gas producers a guaranteed price - as happens in the renewable sector -when the price of gas is above a certain level, the gas producers pay money back to the government - and when it is below, the government pays money to the gas producers.  That would however, would have the effect of locking in gas prices, and gas supplies for many years.  Greenpeace and consultancy Stonehaven have proposed another solution which would see gas separated into a "strategic reserve" to be used at discretion of the system operator and paying gas producers a fixed amount.  Critics say that it would see hefty legal challenge and sctually embed gas in the energy system for far longer as there would be little incentive to develop more flexible solutions like battery storage and greater electricity connectivity across Europe.  The Chancellor has admitted this is "a complex area" and is looking for "pragmatic ways" to approach it. Industry leaders have told the BBC that they are not clear as what the government plans are but one said "this is the most serious I've seen them".  Serious enough to knock hundreds of millions off the value of companies like SSE and Centrica which still operate some of the older renewable generation that make a lot more money when the gas price lifts the price of the energy they supply at much lower cost to the grid.