UKERC Blog: Drawing the borders of electricity security

02 Nov 2015

Graeme Hawker, Research Associate in Future Energy Systems, University of Strathclyde

Last week, the controversial Hinkley Point C nuclear project took another slow step towards realisation, with a Strategic Investment Agreement signed by EDF and China General Nuclear Corporation. The new nuclear projects have been described by the Chancellor as “essential to make the lights stay on”[1]. Meanwhile, this week the Prime Minister announced plans to look further into the possibility of a new interconnector between the UK and Iceland, stating that, “It would provide a sustainable, long-term renewable energy supply and increase the UK's energy security.”[2] While the sometimes nebulous concept of ‘energy security’ is often wielded as a justification for almost any project or concern within that policy space, the difference between these two proposals shows that there is simultaneously a desire for self-sufficiency within our borders – the ability to balance our own electricity supply and demand – and a growing appreciation of the mutual contribution that neighbouring countries can make to each other’s security.

This raises the question, then, of the ‘correct’ scale at which to consider security. At a smaller level, distribution networks – the electricity infrastructure which bridges the gap between the national scale high-voltage transmission network and end consumers – have historically been passive systems, dealing with flows of electricity in one direction only. However, with increasing amounts of ‘distributed’ generation (particularly from renewable sources) being connected to these networks, the management of these systems is growing in complexity and there is a need for the network operators to become ‘system’ operators and take on the burden of balancing supply and demand on a local basis. But does this extend to the point where such network operators become wholly responsible for local electricity security?

There is an obvious attraction to smaller and smaller scales of electricity security, with the notion that the more you rely on assets closer to home, the more control – and certainty – you appear to have over your future supply. The recent unveiling of the Tesla Powerwall[3] home batteries (again, marketed as improving consumers’ energy security) has led to an upsurge in interest for ‘off-the-grid’ properties, self-reliant on a domestic-scale setup with solar panels, small hydro or other microgeneration. However, a simple economic analysis of such a system reveals the opposing tension – that smaller scales of security come with a greater proportional cost. This also highlights the difference between the two forms of security: being able to procure your total energy needs over some future time horizon; and being able to supply your instantaneous demand for power at any given moment, including contingencies for unplanned failures. In the latter case the costs are dominated by the need to have reserve generation which is only used when other supplies are unavailable, and sharing of such reserves between customers across larger and larger areas reduces the per-user cost.

The EU Third Energy Package takes this to its logical conclusion, promoting a pan-European energy market which shares reserve costs across national borders[4], and maximising the value that interconnection between national energy markets can bring to end consumers. Britain has potentially much to gain from the use of increased interconnection with neighbouring markets, particularly in reducing the impact of the variability of wind energy. Larger market scales, incorporating differing generation mixes and patterns of local demand, serve to aggregate and reduce the frequency with which low wind output might be coincidental with high electricity demand, as well as allowing generation to be built in the locations most suited to them. For example, the proposed interconnectors between Britain and Norway[5] would allow British wind energy to be dispatched against the large volume of pumped storage in Norway, bringing cost benefits to both countries against each pursuing an isolationist approach. However, the political question remains – particularly in the context of an approaching EU referendum – on how willing we are as a nation to be reliant on other countries. The key question, perhaps, is to envisage different scenarios for managing security and to ask, if something were to go wrong, who would be accountable?

In Britain, as an island nation, the terms of the debate are more readily delineated than in other places as there is a clear coincidence of our national borders and the layout of our electricity network, with relatively little interconnection to other countries compared to continental Europe. Germany, in particular, can be argued to have only achieved such a high penetration of renewable electricity through the extent to which it transfers power with neighbouring markets which have very different generation sources. However, the political sensitivity of the security question can be seen in the growing question around Scotland’s security of supply[6], as a political area facing, relative to Scottish demand, a large amount of plant closure in the near-term. As Scotland is one part of a secure, fully-functioning GB market, is this merely a contrivance being used to justify investment north of the border, or is there a real concern about the security – in terms of local control – of that politically-defined sub-section of the network? As the flow of electricity obeys physical laws rather than national ones, we must be careful to distinguish the technical concerns from the political.

[1] https://www.gov.uk/government/news/2-billion-support-for-hinkley-point-c

[2] http://uk.reuters.com/article/2015/10/29/uk-britain-iceland-power-idUKKCN0SN16G20151029

[3] http://www.teslamotors.com/en_GB/powerwall

[4] http://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX%3A32009L0072

[5] http://nsninterconnector.com/ and http://www.northconnect.no/

[6] http://www.telegraph.co.uk/finance/newsbysector/energy/11961424/Engineers-urge-SNP-to-drop-irrational-energy-policy.html