More than 50GW of demand-side flexibility from energy storage, electrolysers and interconnectors will needed by 2030 to soak up surplus renewable and nuclear power, LCP has forecast.
The figure was derived from modelling of the government’s energy security strategy, which contained new targets for 24GW of new nuclear and 50GW of offshore wind generation by the end of the current decade.
LCP’s analysis suggested the successful delivery of this capacity would leave Britain with 72TWh of excess renewable and nuclear power in 2030 – the equivalent of 25% of current annual electricity demand. Surpluses would emerge in more than half of all hours (53%) during the year compared to the just over one-in-twenty (6%) hours that are expected to see oversupply in 2022.
The consultancy said this presents opportunities for flexible demand than can utilise these surpluses but risks for renewable generators which may not be able to find a buyer for their power.
On the other hand, LCP also predicted that an additional 45GW of back-up generation capacity, including from bioenergy, hydrogen generation and carbon capture and storage enabled power plants, would be needed to provide power during periods of low renewable output. Importantly, more than 20GW of this capacity would be required for fewer than 5% of hours during the year, creating a “clear policy challenge”.
Commenting on the strategy, which also included a 5GW increase in the government’s hydrogen target to 10GW, LCP said it should be seen as a “positive shot in the arm” for investors in the UK’s energy market.
“In established technology markets – such as fixed offshore wind – the more stretching deployment targets will eventually strengthen the pipeline of available projects. Speed of delivery will be prioritised over competition. This focus on project acceleration should finally help to tackle the various non-technology barriers to deployment.”
“After years of indecision, government has come out firmly in favour of a major expansion of nuclear power,” it added. “While there are few formal near-term targets, actions on financing and siting give more certainty to a sector where investment has been difficult to secure in the absence of government, or energy bill payers, shouldering the construction and revenue risks.
“Despite muted support for new onshore wind, the uptick of ambition on floating wind, long-term energy storage and hydrogen offers industry an opportunity to accelerate the delivery of new projects.”
But despite the “ambitious and laudable” generation targets, LCP partner Chris Matson said that “a closer look reveals the significant challenge of building a decarbonised future energy mix that delivers value for consumers and ensures security of supply.
“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.”
He continued: “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.
“Additionally, the UK could see itself become a significant exporter of energy, though much of this depends on the rate of decarbonisation in Europe.”
However, he concluded: “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.”