Seven reasons why the Government’s ideas on balancing renewables don’t make sense


In its latest call for evidence on how to balance renewable energy, the Government wants to make windfarms and solar farms be responsible for assuring power delivery all the time. This is something that is not even required of fossil fuel and nuclear power plants. Apparently fixated on this notion, and also that of ending the current system of incentivising renewables through giving the long term contracts guaranteeing to pay them set electricity prices, the Government ignores the most practical options for balancing fluctuating renewables.

Under the title ‘Enabling a High Renewable, Net Zero Electricity System‘, the Government has set down a series of loaded questions encouraging solutions that involve removing the most successful incentives for renewable energy and making wind and solar plant guarantee continuous delivery of power.

This is conveyed in questions such as ‘Should CfD generators be incentivised to account for flexibility and wider system impacts, and/or to provide balancing services to the system operator? How could this be achieved’ and ‘How much longer after the 2021 allocation round should the current CfD be used? Is a price based on a short-run marginal cost market the most effective basis for a long-term renewables contract?’ (Note CfD stands for ‘contract for difference’, the mechanism used to give long term guarantees for prices of electricity generated by renewable and nuclear power plant)

Behind this is an agenda concerned with ending the current system of CfDs for renewables and weighing renewable developers down with commitments to provide power when the wind is not blowing and the sun is not shining. This follows on from proposals made by Dieter Helm for ‘firm power auctions’. This is a bad idea on two counts. First, because the system of balancing renewables is much better and cost-effectively organised by the System Operators (at a national and distribution level) rather than making every individual operator try and re-invent the wheel (as it were) (1). But secondly, such a requirement is not imposed on fossil fuel and nuclear operators who have no obligation whatsoever to cover for the often very extensive periods that they are not providing power. Indeed nuclear and fossil fuel operators are actually given incentives (through the capacity mechanism) for being available, not penalised for failure to provide continuous power as the Government wants to do with renewable energy! (2).

In fact the Government is already making it more difficult to balance renewable energy by a policy of giving contracts to new nuclear power stations which encourage them to keep generating electricity even when there is more electricity being generated that is necessary (3).

Our research, based on modeling of Scottish grid constraints, implies that for every TWh of inflexible nuclear generation, an extra 120 GWh of renewable energy generation (the equivalent of 12 percent of the nuclear generation) will be forced off the grid. This is in a system dominated mostly by renewable and nuclear generation. Clearly, the Government could help balance renewables much better by scrapping plans to give more extremely expensive (and wasteful in terms of its impact on renewable generation) contracts to nuclear power plant and instead spending some of the savings on measures which genuinely help balance renewables.

Amongst the techniques necessary for balancing renewables that the Government ignores in their call for evidence are:

  • encouraging energy suppliers to bring in half-hour pricing tariffs for all consumers; this can help shape demand to suit the availability of power supplies (4)
  • giving requirements and ambitious targets to Distribution Companies to hold ‘flexibility auctions’ whereby regional distribution networks hold competitive auctions to enable a range of players to offer demand reductions when needed, so helping balance renewables (5). These already exist on an experimental level, as illustrated by Western Power Distribution Company
  • setting up markets, some of them niche development markets, to deliver storage for short, medium terms and long term balancing purposes (6)
  • Encouraging thermal as well as other types of storage both at the level of the individual building (hot water tanks) and also through district heating systems served by large scale heat pumps with large long term hot water stores (7)

By contrast, the Government’s irrelevant and bad priorities, which reflect the domination by the interests of the outgoing centralised fossil and nuclear technologies of the 20th centuries are at best a distraction, and more probably a threat to the future of the country.

Please make submissions, taking account of these issues, to the call for evidence which closes on March 8th.

by David Toke

The seven reasons are given in brackets (1) to (7)

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