Government plans for more low carbon generation are a start. But we need a much broader strategy to balance security, sustainability and affordability in a reconfigured electricity industry, says Dr Vincent Thornley of grid technology specialist Fundamentals.
Initiatives to ease strain on T&D must run alongside more green generation
The UK government has understandably focused on more renewables and nuclear generation in the drive for net zero carbon and energy security. But there is a gaping hole in the plan, when it comes to electricity transmission and distribution (T&D). Because we also need a strategy to balance loads from the new generation mix, so the grid can deliver power on the existing infrastructure, without costly reinforcement.
Energy policy needs expanding to a whole-system view of the electricity industry, to fully address the trilemma of balancing security, sustainability and cost. And it is not exclusively about how electricity is generated. Our energy system needs reconfiguring as a whole – and so do the mechanisms to pay for it.
Failure to engineer ‘smart systems and flexibility’ at scale into the system would place unbearable strain on the T&D infrastructure – and effectively prevent the attainment of zero carbon targets.
The good news is that our existing T&D infrastructure has the potential to handle a dramatically changing generation mix without the need for wholesale rebuilding, which would incur enormous cost. But only if a wide range of initiatives are fast-tracked, to balance loads with more intermittent power sources (wind, solar etc.) and more peaks and troughs on the demand side (electric vehicles, heat pumps, industry etc.).
Energy trilemma balancing act
The full enormity of the challenge is set out in ‘Transitioning to a net zero energy system: Smart Systems and Flexibility Plan 2021’, published last July by Ofgem and the Department for Business, Energy & Industrial Strategy (BEIS). This policy paper sets out the energy trilemma in stark detail – the need to balance security, sustainability and affordability, with more than 40 action points to transform the industry with ‘smart system flexibility’.
It makes clear that changing the generation mix is only one part of the solution. We need a joined-up strategy for the industry as a whole. And the BEIS-Ofgem Smart Systems Forum, of which I am a member, is indeed working with the industry to help ensure that actions are prioritised and followed through as part of an all-embracing plan.
It’s all about control
The issue for the T&D sector boils down to control. We need to control how electricity is delivered, wherever it is demanded. It is also helpful to control whatever electricity is available to us, however and wherever it is generated, although this isn’t always possible. And we need to do this with minimum reinforcement of the grid, because wholesale rebuilding of the grid would be too expensive.
The bottom line is that we need to optimise utilisation of the wires and assets we already have, as our priority. Of course there will be need for grid reinforcement, applied selectively. But whatever we need to do will depend massively on how the UK’s whole energy system is reconfigured for the future.
Smart systems and flexibility
The BEIS/Ofgem paper argues that failure to engineer ‘smart systems and flexibility’ at scale into the system would place unbearable strain on the T&D infrastructure – and effectively prevent the attainment of zero carbon targets.
We believe all the initiatives below need to be part of a strategy which enables the existing infrastructure to function with minimal reinforcement:
We need major investment in a comprehensive infrastructure of energy storage for low carbon sourced electricity, to replace fossil fuelled reserve power and provide accessible energy which will balance networks at every level – from strategically placed large, long storage and fast response facilities, to local installations at community and street sites.
Energy storage needs to be an integral element in every part of the grid. Bulk storage for managing annual cycles at national level. And tactical stores for dealing with 24 hour peaks and troughs locally.
Industrial-scale batteries are not the only option. Well-proven energy storage technologies include pumped hydro (operating successfully in North Wales for more than 60 years) and hot water tanks. Solutions at various stages of R&D include gravity towers, compressed air, liquid air, phase change material heat stores, flywheels and green hydrogen. They must also embrace interactive EV-to-grid and small-scale storage connections i.e. making virtually every storage device part of the grid.
There is no shortage of existing and promising energy storage technologies. What is lacking is the strategy and investment to bring them to deployment at scale.
We need to remove all the barriers which make it difficult and expensive to connect renewable generation of every type and size to the grid. And we need to incentivise and reward the people who invest in them.
International interconnects are increasingly essential to iron out variations in output from intermittent renewables.
We need a major push to sign customers up to smart tariffs, which reward them to consume less when demand is high: and consume - and store - energy when demand is low.
DNOs need to be empowered to do more on their networks with carbon-reducing technologies – both sides of the meter. Several operators are already deploying energy storage as part of their networks, for example, with others set to follow. The evolution of DNOs (Distribution Network Operators) into DSOs (Distribution System Operators) must accelerate.
Yes – but unlikely to make a difference for a decade at least.
As specialists in automatic voltage control (AVC) solutions, we obviously believe they have a significant role in helping operators maximise the efficiency of their networks, reduce the need for grid reinforcement and maintain reliability of service to consumers. And effective voltage control is carbon-efficient too, of course.
Incentives and rewards
On March 4, the House of Lords Industry and Regulators Committee published ‘The net zero transformation: delivery, regulation and the consumer’. The issues it raised have not been addressed fully in the new energy policy.
It stated: ‘The Government is likely to miss its target for reducing emissions to net zero by 2050, unless it puts in place credible plans which are needed to encourage essential investment by consumers and businesses. The target has not been matched by the policies and the clarity over financial incentives necessary to unlock the substantial private investment needed to fund new energy technologies for both industrial and domestic use.’
Who is going to pay?
Both reports make it clear that there is a massive problem of how to pay for equipping our electricity system to reach net carbon zero. More government borrowing? Even bigger bills for customers? Massive private sector investments?
Investors will not invest unless they have guaranteed incentives and returns to do so, especially for long term projects such as nuclear. Consumers who want to go green will not act unless they can afford to do so – and be rewarded. Customers resent paying carbon levies on top of unprecedented energy price rises.
But government is reluctant to load even more politically unpopular charges on already struggling consumers. And it is shy of financing the transition from even more borrowing. A political quandary of epic proportions.
Whatever the answers turn out to be in terms of national economic policy, there remain many specific questions over the changing roles of grid operators and their relationships with others. The BEIS/Ofgem paper indicates the need for radical changes in the ways in which Ofgem, the ESO and DNOs work together, covering everything from what DNOs are allowed to do on their networks, to how investments are funded and charges allocated between various parties. A fundamental change to the way the industry and its market mechanisms work, no less.
The newly published UK energy security strategy’s focus on more renewable and low carbon generation is a start. But it is a long way short of a whole-system strategy that will effectively achieve net zero carbon, together with energy security, at an affordable cost.
The Lords’ report calls for a review of the role of Ofgem and a ‘new Energy Transformation Taskforce within government that will report directly to the Prime Minster and take the lead in setting and co-ordinating net zero strategy and policy across government’. That has not happened yet.
However it is done, the government’s energy strategy must be expanded to embrace the whole electricity industry, with a plan for transformation which is comprehensive, long-term, realistic and properly funded.
The clock is ticking on net zero carbon. And the time for ‘ifs’ and wish lists is running out fast.
Find out more about Fundamentals Ltd on their member profile page here