Until recently the UK government’s future energy plans relied heavily on expensive new nuclear power plants to provide baseload capacity as old fossil fuel plants shut down. This would also ensure grid stability to support increased intermittent and volatile renewable generation. However, the energy system is fundamentally changing and expensive nuclear power is no longer the answer.
Over the past decade the rise of variable renewables has seen a significant amount of electricity shift away from centralised thermal baseload generation, which traditionally provided the power and stability the system requires. At the same time, the cost of the energy produced from renewables has dropped dramatically .
So why has this transition to cleaner and cheaper electricity generation not brought lower prices for consumers? The answer is the electricity system itself. At its core, the electricity grid is no longer fit for purpose – it was never designed for this new world of distributed renewable energy.
Certain aspects of the future energy landscape are clear. Renewables are the future and they can ultimately lead to lower cost energy because effectively they do not incur any fuel costs.
Other aspects are far less clear. How do we manage the delicate balance of supply and demand with such a large number of distributed variable and volatile generation sources within a rapidly evolving energy system? A decade ago, the UK had only 80 points of generation to manage, today it has nearly one million.
Our outdated grid, connecting all these points of generation and demand together, has fundamentally not changed in more than 100 years. It was designed for centralised generation supply and balanced by the ability to control the flexible output of large generation plants.
It is clear that a new approach is required if we are to achieve our goals for a reliable, affordable, decarbonised energy system. A system that is flexible enough to tolerate variations in generation and consumption; one that is as agnostic to technology as much as possible, to avoid path dependence limiting our future prosperity.
To deliver clean energy at a low cost to consumers we need a new architecture for the electricity system, where the centre of control is the grid itself, rather than relying solely on balancing from dispatchable thermal generation. This should be a common platform that delivers the flexibility and resilience needed for the future and caters for a variety of technologies and solutions.