To reach Net Zero, the UK will need a lot of renewables, with the National Grid Electricity System Operator (NG ESO) looking to wind and solar power, which currently make up 43% of GB energy supply, rising to at least 66% across all of its new scenarios by 2030. But, given the variability of these sources, in its latest Future Energy Scenarios study, it says that ‘flexibility solutions will be required at greater levels than present today’. It notes that ‘increasingly peak demand will not be the only driver of system stress - it will be driven as much by peaks & troughs of electricity supply as by peak demand’, and ‘electrification of other sectors will increase the scale of electricity flexibility needed’.
So it predicts that ‘large amounts of flexibility with duration of a few hours will be needed to match supply and demand within day. This includes up to 35 GW of electricity storage with an average discharge duration of less than 4 hours by 2050.’ In addition ‘demand side flexibility will be increasingly important in an electrified, renewable world, increasing from around 6 GW today to potentially over 100 GW by 2050. It is used both to turn up demand when supply is high and to turn it down or shift demand when supply is lower’.
Scenarios
To this end, NG ESO offer a series of scenarios with different mixes of balancing/storage technology. For example, in the Leading the Way scenario, demand side flexibility reduces unmanaged peak demand by over 40% by 2035. And hydrogen in pushed quite hard, with there being over 40 GW of grid connected electrolysers for green hydrogen production in Leading the Way and System Transformation scenarios in 2050. And, overall, it says ‘from a whole energy perspective, it seems clear that higher levels of hydrogen demand to support more electrolysis would be beneficial.’
Fascinating stuff! And many other issues are also touched on in this useful study. For example, it includes a look at large scale thermal energy storage, the use of which it sees increasing ‘from negligible levels today to between 1.2 GW and 3.8 GW by 2050’, depending on the scenario. Maybe less welcome, it also sees nuclear power still playing a small to medium scale role, with, in some scenarios, nuclear electricity being use to make so-called pink hydrogen. In addition, carbon removal, including Direct Air Capture, featured quite strongly in some scenarios, with Biomass Energy with Carbon Capture (BECCS) playing a carbon negative role.
NG ESO’s scenarios are useful for exploring possibilities in wider system terms, and in parallel, and more pragmatically, it has also published a flagship report Pathway to 2030 including a ‘Holistic Network Design’ for supporting the large-scale delivery of electricity from offshore wind. That includes more of a focus on cost. It says £54 billion worth of new grid links will be required to help the UK hit its target of up to 50GW of offshore wind by 2030. That big number provoked some fierce debate, including something of a twitter storm.
There is no question that there will have to be big changes, as NG ESO had already indicated, and the government has been struggling with this, as in the new Energy Security Bill. One idea is to introduce variable wholesale pricing, regionally and locally as well as smart pricing for retail consumers, with lower rates when demand is low and/or renewable supply high. The Department for Business, Energy & Industrial Strategy has been consulting on power pricing, which it sees as the ‘biggest electricity market shake-up in decades’. It is conceivable that this might not just reduce costs to consumers, but, with local power trading being enhanced, it might also reduce the need for some new big power grids. But as the range of the NG ESO scenarios indicate, the whole thing (power, heat and transport) is in flux and is very interactive, so maybe it is a little early to be specific about grid costs.
Projects
In terms of what green power supply projects will actually go ahead, that will be defined by the Contacts for Difference system. Offshore wind came out cheapest in the new 4th CfD round at £37.35/MWh, with 7GW backed. On shore wind (those on remote islands apart) came out at $42.47/MW. But all of these are in Scotland. Whereas all but 1 of the 66 (2.2GW) of solar farms are in England or Wales – all at £45.99/MWh.
You might have expected power from on shore wind locations to be cheaper than from offshore wind, since installation access is easier and there are no undersea grid link costs, but offshore location allows for larger turbines to be used and has better average wind availability, and so higher load factors. It’s also been pushed more in the UK of late, so it has benefitted more from operational learning effects/cost reductions.
Floating offshore wind is a new development, so that too is currently still higher cost, although it should fall as experience is gained. The CfD support is for Hexicon’s 32 MW TwinHub project at the repurposed wave hub in North Cornwall, at £87.3/MWh. The 4 new entrant tidal turbines all have an even higher CfD strike price- £178.54/ MWh. The 2 Scottish floating tidal projects are 2.4MW for a single Orbital unit and 4.8MW for a double Orbital unit, Magallane’s Morlais project in Wales is 5.6MW, while Mygen’s project in Scotland is 28 MW- an extension of the existing scheme in Pentland Firth.
There will of course be more projects of all types later, for wind especially. For example, 5 sites have been identified for up to 4GW of floating windfarms off Cornwall and Pembrokeshire. But in the leadership election competition, Rishi Sunak promised to maintain the ostensible ban on new onshore windfarms in England and Wales- the new CfD only supported projects in Scotland. And Liz Truss was at one time opposed to large solar farms! Although who knows, whoever is leader, what the new government will end up doing- for example Sunak did say he would cut VAT on energy bills. But, though welcome, that would only make for a small reduction in costs and not address the major, urgent and related issues of energy saving upgrades and demand reduction.
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