As variable renewable expands there are issues in relation to maintaining security of supply, which will add to the cost of a sustainable energy system. But, as bit of post-Christmas cheer, in this brief post, can I point to a recent Imperial College study that says power grid balancing costs for variable renewables are low at low penetration, and can even be negative. And although they can be higher at over 50% shares, depending on how balancing is done, total system intergration costs need not be excessive- at most €30/MWh, even at 85% penetration.
Reviewing existing data, Dr Phil Heptonstall and Prof. Rob Gross from Imperial College look at grid balancing costs, focusing on operating reserve costs, the costs of the unpredictability or incorrect forecasting of variable renewable energy (VRE) output over short timescales (seconds to a few hours) and the capacity adequacy costs associated with the extent to which VRE output can be relied upon to meet times of peak demand over the year. They also try to look at total system costs, including so called ‘profile costs’, but say that its hard to come up with reliable figures: ‘Double counting with reserve costs is possible in all instances, as the same capacity may provide reserve services, serve net loads and meet peak demands’.
The basic costs were relatively low. In a summary they say ‘we found that median values for operating reserve costs were less than €5/MWh when VRE contributed up to 35% of annual electricity production, and less than €10/MWh up to 45%’. They added that although ‘the range is very dependent on the actual or assumed flexibility of the electricity system being observed or modelled … for capacity adequacy, we found that median cost values did not exceed €10/MWh for any level of contribution from VRE’. They noted that ‘findings from other analyses that have modelled total or aggregated integration costs are broadly consistent with these values. However, at higher shares of VRE (for example over 50%) we found that there is a very wide range of total integration costs.’
There was much less data on this, but their paper says that profile costs have been put at ‘€15–25 per MWh at a 25–35% penetration level’, while quoted total system integration costs range from €14 per MWh at up to 35% penetration, right up to £30/MWh at up to 85% penetration. That is obviously more significant, but has to be compared with the average wholesale cost of EU base-load power in 2019 of $43/MWh, current wind and solar generation costs of around £50/MWh and the strike price for the Hinkley nuclear plant of £92.5/MWh, index linked.
It is also worth noting that grid balancing systems are developing fast, so that costs should fall. For example, green hydrogen production and storage using zero cost surplus renewable output offers a way to balance long lulls and although some balancing systems may add to the cost as the Imperial College paper notes, some may actually reduce power costs. Certainly new more effective network management systems are emerging. So there are hopefully some happier times ahead, with, as renewables expand everywhere, smart grid systems helping to better match variable supply and variable demand and avoid curtailment/blackouts.
That, along with a general shift to decentralised power, will lead to some interesting institutional issues, in relation to ownership and control of prosumer systems and community grid distribution networks and also the wider power system. Trying to enhance local control hasn’t always gone well in the past, but the technology and the impetus for change is there. And if there are still still some social and political unknowns, then those are just the kind of positive exploratory issues we should now be engaged with- as the new more efficient system gets created.
Stephen Peake, now Professor of Climate Change and Energy at the Open University, has caught the new happier mood in his nice new ‘Pocket Einstein’ booklet ‘10 Short Lessons in Renewable Energy’, which takes you through all renewables and their mostly very positive prospects in an entertaining fashion. Out soon. Meanwhile, good luck for 2021…
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