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UTILITY Week 18th September 2015

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10 | 18TH - 24TH SEPTEMBER 2015 | UTILITY WEEK Policy & Regulation Market view C ould the UK's variable wind and solar energy ever be classed as green baseload? Not with the government's current renewables strategy. Other countries have started to team renewables with grid-scale storage so that surplus output is captured for use later when the sun fails to shine or the wind fails to blow. However, the UK has so far stuck to paying renewable generators to reduce output when there is surplus power, and using fossil fuel generation to fill in the gaps when weather conditions result in little or no renewable generation. Even if security of supply is the only requirement, there is still much more work to do. The lights have not gone out, so far, but they will unless we get smarter at managing our power by deploying measures including energy storage and smart grid technologies. If lowest cost and least carbon are require- ments too, not only does the current strategy not deliver the greatest emissions reduc- tions, but it also fails to deliver optimum value for the UK. On all three elements of the energy trilemma, then, the current strategy is ripe for improvement. That is the inescap- able conclusion to be drawn from a model developed to compare the 2020-and-beyond outcomes of the current strategy against an alternative that puts grid-scale storage at the heart of the UK's electricity system. What do we mean by grid-scale? Grid-scale storage sites are national infra- structure facilities able to absorb the output of entire wind or solar farms, then sustain level output for hours at a time before requir- ing recharging. Such a requirement can be met currently only by pumped hydro electric- ity storage (PHES). Britain already has 2.8GW of PHES, but the youngest of the four sites was built more than 30 years ago. Around the world, more than 99 per cent of grid-scale storage harnesses pumped hydro technology and new PHES schemes continue to be built in large numbers. PHES is dominant not only because is it capa- ble of providing extremely high capacities of storage, but also because it is relatively low cost. In addition, PHES facilities typi- cally have operational lives in excess of 125 years, requiring only simple and environ- mentally benign maintenance for continued operation. It is important to record that while PHES is currently the only storage technology ready to do the heavy liing that a change of UK strategy requires, neither of the authors of this article is suggesting that the UK's entire electricity storage needs can or should be met by PHES alone. A smarter, more flex- ible UK grid will exploit other storage tech- nologies at district, local and household levels, each of them deployed to extract the maximum benefit from their distinct abilities. Is there space in Britain for new PHES? Easily. Aided by a £200,000 grant from the Department of Energy and Climate Change (Decc), a UK-wide geographical survey has identified suitable locations with low planning risk for 10-50GWh. Many of the locations are what may be thought of as con- ventional. Some would re-purpose brown- field land while others would use coastal features and seawater. Others still would harness existing fresh water reservoirs. The model and the findings The model uses annualised costs for off- shore wind (£343 per kilowatt-hour per year), and PHES (£154/kW/year), and the current capacity market price of £19.40 for fossil fuelled back-up generation. Curtailment is calculated on the basis of Imperial College's estimated future curtailment of wind at a price of £130/MWh. Two scenarios were tested. The first assumed the UK's current trajectory, which will see a further 10GW of offshore wind added to the 28-30GW that is likely to have been deployed by 2020, backed up by 10GW of fossil fuelled generation. The second was an alternative strategy in which wind build-out halts at 31GW and the fossil fuelled back-up is replaced by 10GW/50GWh of PHES storage. The model demonstrates that the strategy using storage would enable a 31GW wind fleet to deliver the same amount of useful electricity as a 40GW wind fleet, while at the same time it would: • save the UK £3.6 billion a year in decar- bonisation costs; • mitigate the volatility of renewables while also enabling 10GW of thermal back-up to be stood down; • reduce carbon emissions by 5 million tonnes a year; • increase grid resilience. The with-storage strategy cuts 5 mil- lion tonnes of carbon dioxide equivalent (MTCO2e) per year from UK emissions because PHES charges up on inflexible and intermittent technologies that are lower car- bon than grid average, and when re-gener- ating electricity displaces standby fossil fuel peaking plant, which is higher carbon than grid average. Despite its cycle losses of around 20 per cent, PHES is inherently low carbon itself, adding just 2 grams of CO2/kWh stored and re-generated. There are, however, steps that government needs to take in order for the UK to realise the wider benefits of energy storage for the economy beyond investment. The PHES fleet offers big storage volumes – 50GWh – large power output – 10GW – and large power absorption – 10GW. It could provide National Grid with an immensely powerful and responsive balanc- ing tool that is more reliable and more dis- patchable than standby thermal plant, and which does not rely on interconnectors with neighbouring countries. Alongside smart grid innovations such as demand-side response (DSR), PHES could make the UK's energy network more secure and efficient. A smart grid that responds to customer demands and reduces power cuts or other events on the network gives Britain the opportunity to cre- ate one of the most secure power grids in the world. It merely needs to exploit the indus- trial and academic expertise and array of energy storage options at its disposal. Having more energy flows that move in both directions on the grid will push ageing grid infrastructure to its limits and will not be able to support a green baseload. How- Baseload renewables? Grid-scale storage could obviate the need for back-up fossil fuel power plants and effectively make wind and solar power baseload generation, say Dave Holmes and Professor Phil Taylor.

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