April News: Royal Society Electricity Storage Study Thoughts

Royal Society Electricity Storage Study

Working for the Royal Society, Sir Chris Lewellyn-Smith (formerly head of CERN) has spent the last 3-4 years looking at the need for large-scale electricity storage to support the energy transition, which he discusses in this interview. They find an optimal trade-off at ~70-90% intermittent generation and ~33% long-duration energy storage (LDES). They agree with us that we should not rely on interconnectors as wind droughts often occur simultaneously in neighbouring countries.

Nuclear though is probably dearer for baseload. Batteries and demand response are too expensive, small and short-duration. Flow batteries, Liquid Air Energy Storage (LAES), gravity storage and CO2 storage may play small roles. Pumped hydro is a factor of 1,000 too small in overall potential. Analysis must be over many decades, not just a few years, and include contingency capacity which only adds a few % to storage costs. And increasing demand must be accounted for. Total storage costs are ~15% of energy costs.

According to their analysis, the best value long term energy storage (that is, over years and decades) is hydrogen in salt caverns, of which we need 60-100TWh. The best value shorter-term storage is adiabatic (or “advanced”) Compressed Air Energy Storage (CAES) at £80/MWh cost of storage (i.e. excluding purchased electricity) which is ~20% above our estimated costs, operating in a complementary manner turning over much faster than the hydrogen.

East Yorkshire, Cheshire and Wessex each have over 100x the required geological storage potential. All-in cost of electricity is roughly £64/MWh, in the range £52-90/MWh depending on assumptions; sufficient A-CAES could reduce this by ~5%. But the market needs mechanisms for remunerating the medium- and long-term storage, and for scheduling different types of storage optimally. It also needs the appropriate policies for building and running the systems, assets, networks etc. that will be required. Without all this, total costs will be much higher.

UK Wind Tsar: Current grid policies make 50GW offshore unachievable

A new report by the UK’s wind energy tsar finds that grid congestion, which already costs the country hundreds of millions of pounds every year in curtailment costs alone, will stop the country achieving its target of 50GW offshore wind by 2030, and is jeopardising even 40GW.

Connecting the wind through our Green CAES would halve the size of grid infrastructure each wind farm needs. And putting the hydrogen economy off-grid (largely or entirely) using our integrated projects would avoid having to double the grid network again. All these issues are why we’ve been saying for eight years that the grid must build capacity ahead of need. Combined with highly unsuitable regulations and contract structures, lack of capacity is severely impeding the energy transition and private investment in the energy system. The need to change all these is urgent and, together, would save trillions in the energy transition.

National Grid’s Markets Roadmap

National Grid published its Markets Roadmap at the end of last month. It endeavours to consider the entire system’s needs but, as ever, avoids defining which consumers it seeks to benefit, so defaulting to sacrificing tomorrow’s on the altar of today’s.

They are still focused on immediate contracts for up to one year’s supply, which will not fund new capacity. They only have a few general questions (and no views) on 2030-2050, thinking that 2030 is strategic – yet that’s half the lead time of a new grid connection, so can’t affect substantial new investment, and is therefore operational, not even tactical; as if to emphasis that, when saying that markets design is only a small part of a bigger picture they fail to say anything about the major element labelled “Strategic operability and network planning”.

To emphasise this, they major on creating / optimising trading platforms for existing capacity rather than building new. For a very limited number of capabilities they seek tenders for new-build capacity for individual services, which will maximise whole-system costs by disadvantaging those systems that deliver multiple services concurrently and therefore more cheaply and efficiently. Efficient markets for procuring what’s there are essential, but can only do their job if what’s there is what’s needed and best for the system.

Other Government Green Day Announcements

The British government put out a huge number of papers on 30th March, under the heading Powering Up Britain. One is picked up above.

Some points of interest include:

  • A big focus on Net Zero energy systems, energy security and zero emissions vehicles / related infrastructure;
  • Inclination towards integrated approaches, though not yet integrated enough;
  • Awareness of the urgent need for lots of large-scale long-duration energy storage (LDES or LLES) though the actions planned need fleshing out and developing further;
  • Acceptance of the majority of Chris Skidmore’s recommendations in his Net Zero Review;
  • Targets for 70GW new solar PV and 50GW new offshore wind by 2035, to achieve a Net Zero electricity system by that date, though without the changes required to reduce the necessary grid reinforcement and deliver the required balancing and ancillary services;
  • Eight new nuclear reactors, which we support but which will divide the Net Zero community;
  • Measures to de-carbonise the heat sector, launching a consultation on a new Clean Heat Market Mechanism (CHMM), a new £30million Heat Pump Investment Accelerator ‘designed to leverage £270million private investment’, and a rebranded Great British Insulation Scheme to provide £1bn insulation and energy efficiency funding for people in council tax bands A-D by 2026;
  • Ongoing development of the hydrogen economy with major funding;
  • Eight CCS projects, which we welcome for industrial purposes but not for power (unless piggy-backing on the industrial);
  • Further consultations on diverse subjects.

Significant gaps include:

  • Grid and networks integration into these strategies, including building proactively and dramatically shortening lead times and reducing costs;
  • A focus on consumers of 2030, 2040 and 2050, not just consumers of today;
  • Removing regulatory and contracting barriers to building LDES / LLES both stand-alone and integrated with renewable generation, grids, hydrogen etc.;
  • A clear and coherent strategy for supporting and developing LDES / LLES;
  • Comprehensive incentivisation of the energy transition that would avoid disadvantaging British business while putting in place all the right financial incentives, long term while making the entirety of the energy transition commercially viable – thereby mobilising private investment for all of it and eliminating the need for extra subsidies or other government interventions.

Mark’s Blog

The government’s energy strategy Powering Up Britain was published the day before our newsletter, so only the most cursory views were given. This month Mark provides a more considered analysis.

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