Overload – Why ‘grid constraint’ could hobble the clean energy revolution, and how we can solve it without costly upgrades.
The UK has experienced a radical transformation of its electricity supply in recent years.
In 2008, fossil fuels accounted for roughly 75% of the UK’s electricity mix. Ten years later, the output from coal had declined to just 5%, and is expected to be phased out completely by 2025.
Conversely, renewable energy generation from wind turbines and solar panels has exploded in the same period, increasing from 6% in 2008 to 47% in 2020.
However, one aspect of the electricity landscape which is struggling to keep up with this rapid pace of change is the transmission and distribution network, which is finding itself under increasing pressure as new generation is continually added to the grid.
The result is that sometimes the amount of renewable energy being generated can overwhelm the network, meaning that generators are paid to temporarily shut down. Alternatively, generators may be charged for the reinforcement required to enable renewable energy generation to connect at all, a cost which is passed on to billpayers.
This is a terrible waste of clean energy, presents another barrier to renewable energy generation, and could become a major obstacle in the near future if there is not enough grid-capacity to accommodate new generators.
Furthermore, in addition to slowing the pace of the clean energy transition, a ‘constrained’ electricity network will also lead to higher bills for consumers, as generators must be compensated for turning off their supply, or as the reinforcement charges are passed on through electricity bills.
This is a big challenge which must be tackled immediately if the UK is to stay on target to reach its net zero carbon reduction targets.
What is electricity grid constraint and why is it a problem?
Grid constraint means that there is too much energy being generated for the electricity grid to manage.
It is the constant job of grid operators, like the National Grid , the UK’s electricity transmission network, and the regional distribution network operators, to balance power generation with consumer demand.
If there is not enough demand to absorb the electricity being transmitted on the network, then the network will become overloaded, and generators will be forced to disconnect.
This is referred to as ‘curtailment’
What is grid curtailment?
When the network becomes overloaded with electricity, some energy generators will become disconnected, meaning they are no longer exporting energy to the grid.
Obviously, this has a financial impact on the business of these generators as they are losing revenue. Therefore, companies who have been asked to curtail their energy generation are compensated by the grid operator, with the costs being recouped via consumer bills.
However, such ‘grid balancing’ exercises come at no small cost.
In 2020, when consumer demand fell as a result of the Coronavirus lockdown, National Grid spent an unprecedented £826 million balancing the grid, primarily in the form of payments to wind farm producers to cease generation.
For anyone who has ever looked out over the Channel at the Rampion Wind Farm and wondered why the turbines are not spinning even though it’s a windy day, this is most likely your answer.
Why does grid constraint pose a problem for renewable energy?
Despite the fact that electricity demand has declined in the UK to mid-nineties levels, it is expected to balloon in the coming decades, driven primarily by the transition to electric vehicles and electric heating.
One forecast from UK Power Networks, the Distribution Network Operator for the South East, predicts that EV use will increase by 3,000% and heat pump uptake by 2,500%.
Meeting this demand will require much more renewable energy capacity to be rolled out, which will of course put a greater strain on the transmission and distribution network.
In addition to increasing the likelihood of curtailment, there may also be instances where new, local renewable energy projects, associated with the transition to Net Zero, cannot go ahead because of constraints on the distribution network.
Renewable energy developers will be required to pay hefty grid reinforcement costs to accommodate the clean generation equipment, which would quickly make an otherwise viable project too expensive to realise.
What solutions are available to ease constraints on the electricity grid?
The most obvious solution to increasing the capacity of the electricity network is to pay for grid reinforcement. However, this is an extremely expensive option and will ultimately lead to an increase in consumer bills, which could exacerbate levels of fuel poverty. It also ignores the profit taking that was achieved by the electricity networks over the years when insufficient investment was made to prepare for the transition to a clean, affordable energy supply.
There are instead a variety of options available which will reduce constraints on the grid while simultaneously helping the UK to achieve its Net Zero targets and avoid hefty bill increases.
Improving energy efficiency – the UK has the oldest housing stock in Europe, with roughly two thirds of housing registered as having an EPC Rating of D or worse.
Reducing heat loss by installing measures like insulation and double glazing will improve the warmth and comfort for residents whilst also lowering the capacity required to generate heat, decreasing demand on the networks, lowering energy bill costs and carbon emissions produced by the property.
Improving energy efficiency is one of the simplest actions we can take in the fight against climate change and must be the first thing addressed when making improvements to any property.
Smart battery storage – by installing battery storage technologies, we can capture energy produced when the wind is blowing and from solar panels during the day saving it for use at times of peak use. We can also charge the batteries from the grid when there is a glut of generation capacity.
The stored energy can be used on the site where it was generated, or it can be exported to the electricity grid.
Increasing the number of smart batteries will reduce the incidence of curtailment (and associated costs) because excess energy being produced by wind and solar power generators can be stored and saved for later.
In some instances, smart batteries can be aggregated together to create a ‘Virtual Power Plant’, working collectively to react to the fluctuating demands of the electricity grid.
British based smart battery company Moixa Technologies Ltd are developing one such Virtual Power Plant in Worthing, which has been identified as an area of gird constraint.
On-site micro generation – Installing more renewable energy generation for homes and business will reduce grid constraints because by generating their own energy, they don’t need to take power from the grid, by purchasing power from an energy supplier.
While there will still be some need to buy energy from a supplier, if homes, schools, community centres, churches, and businesses across the UK can start generating their own electricity, they can achieve significant cost savings whilst also alleviating stress on the electricity grid, thereby establishing energy security for everyone, especially our most vulnerable people
Combining on-site generation with battery storage will reduce the need to source electricity from a supplier even more., bringing more independence to our communities.
Demand Side Response and Time of Use Tariffs – In addition to rolling out new technologies, grid constraint is alleviated by implementing variable energy costs to encourage energy consumers to change their behaviours in response to peaks and troughs of energy generation and demand.
For example, a large factory or a steel mill might be encouraged to ramp up production at a time when wind energy is abundant but when few others are using it, such as late at night. By offering a cheaper tariff price, we can incentivise use at this time because these companies will save money.
Conversely, consumers may be discouraged from using energy at times when there is a peak in demand, such as half-time during an England football match when everyone makes a cup of tea. By making electricity more expensive at these times, energy customers might think about modifying a scheduled activity such as an energy intensive industrial process, or using the washing machine during peak demand times, because it will be expensive.
Conclusions – Grid constraint is a major issue, but solutions are available
Constraints on the electricity network could pose a major threat to the rapid rollout of renewable energy that is needed for the UK to meet its Net Zero carbon targets by 2050.
However, solutions are available right now which will not only help reduce grid constraint and curtailment, they will accelerate the transition to a low-carbon economy. What’s more, many of the solutions to network constraints will also help to reduce energy costs and improve the value, affordability and comfort of homes and businesses.
The community energy sector has can offer a vital role in supporting the rollout of these solutions, from on-site micro-generation to battery storage to energy efficiency improvements.
There is an opportunity in the next few years to build a society which is powered by clean, local, renewable energy whilst simultaneously improving network efficiencies and driving down costs for energy customers.
We must seize it.