Utility Week

UTILITY WEEK | OCTOBER 2022 | 21 Electricity Flexible energy is paramount tosolving the energy crisis Flexibility can alleviate the worst impacts of the energy crunch by reducing demand when the energy system is under the greatest strain. Opinion T he price squeeze began before Russia invaded Ukraine, but the war intensi ed it profoundly and made it impossible to predict when it would end. Solutions proposed include means-tested subsidies, cap- ping the cap, upstream taxes, spreading the cost over time, and so on. I'm not quali ed to choose between the alternatives or to plot a route for the short term, though it's absolutely clear to me that immediate action is needed. But there are a few things we can think about to help us shorten the crisis and avoid a repeat. In energy policy over the years, there has been one glaring success and one glaring failure. The failure is energy e ciency, which has had scant policy attention resulting in disappointing, patchy progress, leaving us hopelessly exposed to world commodity prices. Running counter to the saying that one should never waste a good crisis is the tendency to reject ideas on the grounds that "that won't help me right now". The rst time I heard an energy regulator use that argument was in the last gas crisis, when the Rough oƒ shore gas store was damaged in 2005 and several power stations spent the winter burning tractor fuel. That was bad enough, especially for industry, which paid for most of it. In comparison to today, it's a storm in a teacup. But where would we be now, if we'd acted properly then? We've missed 17 years of steady progress on good quality home insulation. The success is renewable generation, mostly wind and solar, which has gouged huge holes in the nation's gas bill already and continues to do so. As I type, on an ordinary day in late summer, wind and solar are providing about a third of our electricity needs. All of that would otherwise be coming from gas. But wind and solar face two di culties. The rst is geography: every year, a small but noticeable percentage of our renewable generation is discarded (that is, we let the wind blow past some of the turbines, and let the sunshine bounce oƒ some of the panels) because we don't have enough capacity on the wires to carry all of it into our cities. The second is timing: wind and solar generate when nature tells them to, rather than following our varying levels of need. It doesn't necessarily land when our system is closest to the edge and when we are running our most wasteful power stations. We do put that energy to use, but we could do better. When the invasion of Ukraine began the Interna- tional Energy Agency put out a ten-point plan to reduce Europe's dependence on Russian gas. One of those points was to use " exibility to make our electricity systems more e cient and secure. We, among others, proposed ways to do this in the short term. One of those – which we nicknamed Green Shi— – involved put- ting green energy to work by better scheduling energy consumption in areas where there's a lot of renewable generation. There are tens of thousands of electric vehicles in Scotland, but few if any of the drivers have the incentive or the means to time their charging to periods of high wind generation north of the border. The same also applies to sunshine charging in south Wales and southwest England. We have a solution to this; it requires us to trudge through the mud of regulatory reform, but we're doing that, and we'll deliver it. The other proposal – which we nicknamed Greener Peak – looks like it coalesced with similar initiatives from around the industry, which will hopefully lead to a quicker result. We're expecting the imminent launch of National Grid ESO's winter demand turndown service, in which energy users of all kinds will be rewarded for allowing any " exible energy-using devices they have to be turned down for short periods when the supply of electricity is tight. For home energy users, that might mean a car charger or a heat pump. In business, it might mean refrigeration or pumping. It doesn't mean the li— s, the trains or the cooker – you'll still get home and those souœ és will still rise – it's the customer who chooses what's " exible. National Grid ESO is launching winter demand turn- down to help prevent blackouts. True, the risk of black- outs this winter is probably higher than last winter, and demand turndown helps reduce it. But it isn't rationing. Rationing means closing down a market; this means opening the market up. It's not a complete job – winter demand turndown isn't so useful for the majority of peo- ple who have gas heating and petrol or diesel cars. But making electricity more " exible and e cient reduces the nation's gas burn, and that bene ts everyone. California had an energy crisis in 2001, and a variety of demand turndown measures were deployed. Some were harsh, and some felt a lot like rationing. Econo- mists then estimated that 5% oƒ peak demand could take 50% oƒ the peak price. Now, we can't take that isolated statistic and bank it, any more than we can take one lucky nd on the discount shelf and apply it to a whole year's shopping. But it does reveal something about how energy works when things are tight. Conversely, it tells you something about the value of doing the right things – investing in energy e ciency, " exibility and renewables – before the next crisis hits. Alastair Martin, founder and chief strategy o cer, Flexitricity "The success of renewable generation, mostly wind and solar, has gouged huge holes in the nation's gas bill already and continues to do so."

• Cover