There is more than 'low wind' behind our electricity system woes

A growing number of margin notices are the result of years of slow progress on upgrading the grid

By Jonny Marshall

So far this winter, National Grid has issued more notices that power margins are tight than for any year since 2008.

While the lights have not gone off, and remain overwhelmingly unlikely to, the current state of play shows that not all is well in our energy system.

Looking to the future, as clean and cheap electricity will be utilised to power our cars and heat our homes and renewable electricity capacity could reach 100 GW, questions need to be asked as to whether the grid is up to the challenge, and if not, why not?

Rollout

Britain’s booming renewable energy sector is no secret. There is an ever-growing queue to celebrate national deployment of offshore wind and widespread support for plans to reach an impressive 40 GW by 2030. At the same time the Government has brought forward plans to close the few remaining coal plants to 2024, and has all but nullified any investment case for new gas-fired capacity.

All good so far.

Lack of wind is often blamed for tightness on the grid, but this is not the whole story. Image: David Dixon, CCL
Lack of wind is often blamed for tightness on the grid, but this is not the whole story. Image: David Dixon, CCL

But, what it hasn’t done – despite years in which to act – is ensure that the rest of the system is up to scratch, that it is dynamic and resilient enough to deal with low wind levels and cold weather without leaning on coal plants that are well past their sell-by date.

A more responsive system is able to ride out fluctuations in wind output by making the most of flexibility mechanisms such as storage, trade with neighbouring power networks, and by shifting demand to times when energy supply is plentiful.

It is now five years since the National Infrastructure Commission’s Smart Power report; five years since industry body EnergyUK laid out a route to a flexible system; five years since the Government’s call for evidence on a smart power system; and four years since Ofgem launched its Smart Systems and Flexibility Plan.

Without getting lost in the detail, there is one thing that all of these documents have in common – the urgent need to upgrade our power system to make the most of Britain’s generous renewable energy assets.

Looking at our grid today, it is hard to conclude that there has been much in the way of progress. Battery deployment is languishing around a tenth of where it needs to be and is sufficiently rare that projects still make headlines, DSR is operating at just a fraction of its total potential, network investment (and direction of investment) remains well behind that needed to meet net zero, and incentives for homes to install and make the most of smart meters remain almost entirely absent; among many other markers.

The recent Energy White Paper of course promises action, but still just that. All talk of a smarter and more flexible grid remains in the future tense, as a destination at which to end up rather than a journey to crack on with now.

It is this talking instead of delivering that means gigawatts of wind capacity can be curtailed in the morning before coal plants asked to fire up should output dip later in the day, rather than clean energy being stored; why power markets are spiking; why the operator had to step in to sign out-of-market agreements to turn down nuclear plants; and now, why the ESO is issuing more and more margin notices.

Low wind spells should not be a problem; there is a litany of evidence, models and plans to ensure that renewable-heavy grids do not fall over when the weather turns.

Analysts Wartsila recently compared UK power system scenarios, one of which was titled Adding Renewables Only. This strategy of ‘build renewables and hope for the best’ was the worst performing, and is, unfortunately, the closest comparator to our current grid.

Muddling on

There is a real shortage of flexible technology needed to keep the grid ticking over. Image: InterGen
There is a real shortage of flexible technology needed to keep the grid ticking over. Image: InterGen

Despite these headwinds, there are at least some tentative signs of progress. National Grid’s aim to be able to operate a zero carbon power system by 2025 has seen it move forward on what it can do to boost grid resilience (buoyed by a spotlight on some of these issues following the August 2019 power cut).

Taking initiative on non-polluting ways to insulate grid frequency from supply shocks, to generate inertia without creating carbon, and to manage voltage in a more volatile system are all essential changes needed to realising the much-promised ‘flexible system’. These actions show that, when the will is there, more can be done.

With the White Paper now finally here, and close to 20 consultations landing from it, it is now essential that words and well wishes from recent years translate into action.

Companies such as National Grid can make some progress, but without direction from the very top, this will continue to be incremental.

Tracking capacity of small and flexible capacity will give an insight into progress, so will the emergence of new products – ‘virtual’ power stations and the like – and maybe even going as far as developing local markets to bring down bills and get the very best from the components that comprise our grid, as recently advocated by Policy Exchange.

Failure to deliver?

Having been designed to solely ensure sufficient thermal capacity to step in when renewable output dips, the policies we do have are at least supposed to keep the lights on without fanfare.

However, the inability of power stations with fulfil contracts solely based on their availability has been missing from the debate thus far.

During last week’s tightness when three separate grid warnings were issued, close to 2 GW of coal capacity (spread across EDF’s West Burton A and Uniper’s Ratcliffe plants) did not fulfil contractual obligations. This week, an outage at Drax further boosts the coal crunch. Add in outages across EDF’s capacity market-contracted nuclear fleet (getting on for 3 GW’s worth) as well as unavailable or mothballed gas plants, and it is clear that there is more than just ‘low wind levels’ at play.

If plants that sign contracts are able to ignore them without meaningful repercussions, what is the point of signing deals in the first place? If penalties for non-delivery are so low that contracts to ‘keep the lights on’ are being ignored, isn’t that the story here?

There have also been interesting events on the balancing market, with EDF’s West Burton B pocketing £4000/MWh, one of the largest imbalance prices for years.

This is the same West Burton B that had for years been incorrectly informing the market of its available capacity and, as a result, booking big profits by stepping in to keep the grid balanced instead of selling power for less through the wholesale market.

Stringent market trading rules are supposed to ensure fair play at all times. But if they have been ‘inadvertenly’ bypassed for years, how can we be sure that all is fair in power markets, especially when record high prices are on offer?

So, yes, sometimes it isn’t very windy; but there remain much bigger questions to ask.