UK electricity grid faces oversupply problems
The UK’s electricity grid will have an oversupply of renewable and nuclear more than half the time by the end of the decade, according to technology experts LCP.
For comparison, it is expected that in 2022, the UK will experience an oversupply from these sources for just six per cent of the hours.
LCP’s new analysis, based on the generation capacity outlined in last month’s energy security strategy and expected levels of demand, suggests there will be complex challenges in balancing the supply and demand of electricity if power generation is ramped up.
This creates valuable opportunities for flexible demand which can utilise excess power, but creates risks for renewable generators which may not find a buyer for their power.
In 2030, 72TWh of excess renewable and nuclear energy is expected – equivalent to almost 25 per cent of current demand.
Using all this excess would require 50GW of demand-side support from energy storage such as batteries, electrolysers and interconnectors to enable exporting.
Accelerating the growth in demand-side flexibility along these lines would reduce the costs of balancing the grid.
It would also mitigate falling revenues for renewable generators to reduce subsidies, and help consumers realise wider benefits from renewable power.
LCP estimates a need of an additional 45GW of back-up capacity to provide energy during periods of low renewable output.
This gap will be likely be filled bioenergy, hydrogen and Carbon Capture Usage and Storage (CCUS) enabled power plants.
However, over 20GW of this capacity will only be required in fewer than five per cent of hours.
Commenting on the findings, Chris Matson, Partner at LCP said: “For more than half the time in 2030 the UK’s renewable and nuclear backed energy system will be producing more energy from renewables and nuclear than it uses. Simply wasting this generation would harm both consumers and investors so a whole system approach is essential to minimise the cost of delivering net zero.
“To tackle this significant oversupply, the UK needs to accelerate the delivery of demand-side flexibility to capture this spare energy and ensure it doesn’t go to waste. This can be through fast-growing technologies such as battery storage, longer-term storage such as pumped hydro, as well as the electrolysers to produce hydrogen for use in other energy market such as heating.”
He further suggested the UK could see itself become a significant exporter of energy, shifting its perception as a consumer and net importer.
The legal partner also called for policy changes would be key for the scale of investment needed in order to deliver the government’s ambition to achieve 95 per cent decarbonisation of the power sector by the end of the decade.
Mason added: “Without a concerted programme of policy and regulatory reform to unlock this investment on a range of supporting technologies, there is a risk that the strategy will fail to cut bills in the long-term, and actually puts them up.”