UKERC Blog: Future sources of flexibility in a decarbonised electricity system

14 Mar 2016

by Graeme Hawker and Keith Bell

A new UKERC review titled “Security of electricity supply in a low-carbon Britain” has just been published.

With confirmation late last year that the closure of all UK coal plants will happen, as planned, by 2025[1], there has been growing concern that, as levels of conventional generation decline in favour of higher levels of intermittent renewable sources, security might be compromised.

The government’s goal for this gap in ‘firm’ capacity to be replaced by new-build gas generation was not forthcoming in the first two rounds of the GB Capacity Mechanism, and a new auction for delivery in 2017/18 (a year ahead of the original first delivery year) has been proposed by DECC[2] in order to provide additional investment certainty to gas projects. The idea that natural gas is capable of being a key transition fuel towards a low carbon electricity system was challenged in a recent UKERC report[3], which also suggested that the contribution by natural gas to the energy transition has mostly already happened.

Recently, a report[4] by the Energy Research Partnership (ERP) modelled the future GB electricity system to determine the additional costs required in balancing supply and demand for a variety of generation mixes, and to find the lowest cost solution in reaching a low carbon intensity of electricity while also maintaining system security. The report recommended that a significant amount of new low-carbon ‘firm’ capacity (that is, new nuclear, or thermal generation sources such as gas or biomass with carbon capture and storage) is required – for example a minimum of 13GW of such plant if a target of 50g/kWh is to be achieved. This is equivalent to 6 times the capacity of Hinkley Point C, a project which continues to struggle towards investment[5].

If, then, we have an urgent need to find new sources with which to guarantee our future electricity security, and neither natural gas nor new nuclear appear to be working as immediate solutions, and while  there’s little government interest in supporting Carbon Capture and Storage[6], where else can we turn to find new sources of security in a decarbonised system? On the large scale, we can look to interconnection with our European neighbours, although further integration with the Single European Energy Market may depend on the result of the upcoming EU referendum. It is also an outward-facing means of addressing the security problem, which may be less politically viable as a sellable solution to meeting national security issues. That leaves us with ‘smart’ options such as distributed generation, Demand-Side Management and storage, where ‘smart’ may also be interpreted as ‘complex’.

This additional complexity throws up further issues which have come to the fore of the current discussion around electricity – see, for example, the National Infrastructure Commission’s recent report on ‘Smart Power’[7] which identifies the need for enormous change to the system at all scales, and the report commissioned by the Committee for Climate Change on the value of flexibility and the externalities of low-carbon generation[8], which quantifies the substantial gains that can be made from finding new sources of flexibility.

The complexity question, and the future need this places on our electricity networks and their development, has also been addressed in a UKERC Working Paper[9]. Meanwhile the System Operator, National Grid, is burdened with the requirement of implementing the practical reality which ensures the lights stay on, and in doing so has published its System Operability Framework[10] which addresses the operability challenges that may be faced in the future, and highlights the need for new technologies and services.

In the light of this ongoing discussion, our publication reviews the ERP’s report mentioned above on “Managing Flexibility Whilst Decarbonising the GB Electricity System”, and seeks to address the key issues in this growing question about future system security and operability, and to highlight the increasing need for policy decisions and investment to be made sooner rather than later, without the luxury of certainty on relative costs.