Engineering Net Zero Part 9A: The Role of Balancing in our Energy System

David Simmonds extends his Engineering Net Zero series by visualising the workings of a renewables-based UK power system

WE HAVE successfully started our energy transition, with renewables now meeting around 50% of today’s power needs. Last year, the newly formed National Energy System Operator (NESO) presented their Clean Power options, providing a roadmap, albeit optimistic, for 95% of UK power to come from clean sources by 2030. Beyond this, with their Future Energy Scenarios (FES), NESO offers potential routes to full decarbonisation and electrification of industry, heating and transport, to meet net zero by 2050. Both steps rely on an aggressive development of renewable energy resources, retention of back-up measures, and significant societal change. Many question whether we can afford it and keep consumers onboard, and the National Infrastructure Commission (NIC) in their very recent report stress the need to invest in local distribution networks.

Following a near blackout event in January, a Times article attempted to address the core issue of the transition; “How to keep the lights on when the wind doesn’t blow”. This looked at a number of solutions for balancing our energy system, but conflated two challenges, short- and long-duration power shortages. Most of the solutions offered solved the former, while the latter still requires 5+% fossil gas usage in 2030 and presents greater challenges for 2050.

Given these latest developments I felt I should extend my Engineering Net Zero series by looking at the biggest challenge and cost, balancing power over the final 15-20% of demand. This first part, Part 9A, looks at how best to visualise the challenge. Part 9B will consider stochastic modelling offering a better way of quantifying the challenge, while Part 9C will address strategies to successfully balance our energy system. I will start by looking at how we are transitioning power to renewable energy.

The transition to renewables

Our power system has evolved over the last century to become the mammoth and complex grid network we have today, meeting demand 24/7. It has been supplied by “dispatchable” power, produced in generating stations which over the years have migrated from coal through oil to mainly gas today, all fossil fuels. Dispatchable means that sources can be called up as and when needed to match demand (I remember the coal-fired power station in Neasden, northwest London, about a mile from my home, burning over 1m t of coal a year to keep the London Underground running - it probably was the cause of my lifelong asthma). From the 1950s, fossil fuels were supplemented by nuclear power, which due to its nature, cost, and low emissions operates on baseload, rarely having to be cut back.

In recent years, a coal-fired power station in North Yorkshire was modified to run on wood pellets, while last year the UK’s final coal-fired station closed, a milestone in power sector history. Smaller biomass- and waste-burning plants have been introduced to reduce fossil fuel usage. However, cleaner renewable energy sources, wind and solar, are now being pursued at pace, delivering half of today’s power. Further demand has dropped over the last two decades due to energy efficiency improvements and offshoring of industry. In turn this has led to more flex within our power grids.

These renewable resources are not dispatchable, they produce when the wind blows or sun shines. As renewables increase further, the call on the power stations will drop. However, they remain on standby to cover shortfalls - when the wind drops, or clouds gather – incurring maintenance and standby fees (capacity charges). At other times, during periods of low demand or high winds, we may have to curtail output, and, as their share of the generation portfolio increases, we are starting to incur significant curtailment fees (the compensation paid to renewable operators to turn off their wind or solar farms when the power they are generating isn’t needed).

The availability of low-cost renewables is providing the stimulus to further electrify industry, and transition the rest of the economy, particularly heating from gas, and transport from oil, to meet net-zero goals. This increase in power demand requires major expansion of the grid and introduces greater seasonal variation. The combination of non-dispatchable power and increasing seasonality calls for balancing measures to manage both excesses and shortages, across the day, through the week, and over the year. How will this be achieved?

Short-duration balancing measures

Energy demand fluctuates throughout the day, rising in the morning as heating systems turn on and again in the evening with increased use of televisions and cookers. Meanwhile, energy supply – particularly solar – is inherently diurnal (example through-day chart courtesy of IamKate website). Our extant power and gas grids have been designed and built to smooth out the impact of in-day demand variation, but the electrification of heat and wider deployment of intermittent renewables will exacerbate the need for short-duration balancing.

NESO is looking at important demand side response (DSR) measures to limit peak demand. These include incentivising consumers to switch off equipment during peak hours and offering lower rates for night-time charging of electric vehicles (EVs). Smart meters, smart chargers, variable pricing, and battery systems are all key instruments to deliver these societal-led changes (see right). Nonetheless, system-level changes are also necessary. For example, some motorway service stations now have 40 ft containers with backup batteries, charged overnight, to support EV fast-charging during peak use periods, while companies like Orsted are investing in battery bank arrays to buffer windfarm output.

Larger-scale battery equivalents, such as liquid air, sand battery, and flywheel technologies, are also being assessed, though planned battery developments are only in the order of 0.15 TWh capacity (approximately 0.05% of total 2030 power demand). Planners are also looking to consumer-based vehicle to grid (VtG) and similar technologies to potentially provide up to 1 TWh capacity by 2050.

All these short-duration measures are essential tools for power system operation, but their scope is limited. Battery systems must be recharged before they can be reused, and once there is insufficient power to restore capacity across the day, we reach a break point and longer duration supply measures are needed. It was interesting to hear from Chris Stark, head of the government’s Mission Control for Clean Power 2030, at a recent committee hearing that they have more applications for battery-based systems than they can presently handle. I would go further and question whether projects such as this battery storage investment in Scotland will deliver long-term returns.

In these early days of renewables, DSR and battery storage measures complement each other to smooth out demand, but increasingly, DSR measures could negate the benefits of battery systems. For example, a high penetration of night charging of EVs will lead to less overnight power to recharge other battery systems and erode the benefits of preferential night-time tariffs.

Long-duration balancing measures

Long-duration measures are needed to balance weather-dependent seasonal demand and intermittent renewables, provide capacity for recharging of short-duration measures, and avoid power cuts. Some can also manage excess power, when renewables oversupply on windy and/or sunny days. With the increasing deployment of renewables, NESO estimates that, without offsets and effective grid planning, curtailment costs could rise to £8bn/yr (US$9.9bn/yr) by 2030. This chart covering the last 12 months already demonstrates today’s variability, but by 2030 the system will experience greater through-year variance, increasing the call for long-duration measures.

System planners use stochastic analysis to model the uncertainties and the inherent randomness of weather-dependent variables and generation plant availability. In their studies, the Royal Society estimates that our renewables-based system will require 80–100 TWh/yr long-duration balancing in 2050, approximately 15% of demand.

Ideally, long-duration measures should be circular, storing excess or surplus energy for reuse later, effectively operating as a long-duration battery. However, as we have seen, today’s batteries have limited capacity and are too expensive for use at scale.   

In their plans for 2030, NESO consider two long-duration balancing measures, hydro storage, such as Drax’s Crauchan project in Scotland, and interconnectors to Europe, the Viking link to Denmark being a recent addition. However, they still rely on fossil gas generation as the final (5%, higher in a cold winter) capacity measure to avoid blackouts, as this can rapidly respond to demand change. 

Scandinavia is blessed with many hydro schemes which can be modified to operate with renewables to meet their long-duration balancing needs. The UK’s hydro capacity of approximately 4 TWh (1.3% of demand), could be scaled up, particularly in Scotland, but not to the level needed without significant land loss and public planning challenges.

By 2030, in a typical year, NESO looks to interconnectors to export ~50 TWh surplus renewable energy and import ~20 TWh power to avoid blackouts. Exporting surplus renewable energy makes sense, especially while Europe is seeking green energy, but imports carry international supply risk. NESO also carry a contingency case to cover a lower renewables build rate, their Hi-Dispatch option, which considers adding carbon capture facilities to one or two gas-powered stations so that they can be produced for longer periods with limited emissions impact.

Looking further ahead, in their Future Energy Scenarios for 2050, NESO plans to manage increasing demand and replace unabated fossil gas through differing levels of consumer engagement, electrification, and system improvement. Interconnectors remain the primary long-duration balancing/capacity measure, with typically 60–100 TWh exports over the summer and 30–50 TWh imports across the winter, annually. However, given this export/import arrangement is not circular, (Europe does not store this power), one can question its sustainability, something I discuss in Part 9C.

As for 2030, interconnectors cannot meet the final 5% of 2050 demand, so a new long-duration balancing/capacity measure is introduced: hydrogen. In their studies on electricity storage, the Royal Society concluded that, although inefficient, the lowest-cost option for large-scale energy storage was the “hydrogen cycle” – using surplus power to produce hydrogen from electrolysis, which is stored and used to generate power during times of shortage. Other countries are coming to a similar conclusion and Centrica are looking to convert their Rough Facility for hydrogen service with 10+ TWh storage capacity. Speaking in Imperial College London’s Hydrogen Futures feature, the college’s professor of sustainable development in energy, Nigel Brandon, says: “If you are going for an 80% decarbonisation target, you probably don’t need a lot of hydrogen. But once you go for 100%, you do.” How true.

Reinforcing our power system for renewables

While short-duration balancing is operationally critical for daily management of the grid, long-duration balancing and peak shaving capacity measures for the final 15-20% of demand are system critical, to avoid energy shortages and blackouts, I call this tranche the demand challenge. They are more expensive and their use introduces seasonal price variation. A summary of the options discussed above is presented in this chart where the red arrows represent capacity or dispatch measures, while the green arrows show balancing measures to handle excesses.

Most measures are circular, storing energy for later use. However, interconnectors are non-circular, selling cheap “surplus” summer power and importing expensive electricity over winter from the European market. Continued use of fossil gas remains the ultimate capacity measure, though, as per NESOs Hi-Dispatch, it can be abated through adding carbon capture. DSR measures stand out uniquely as they work countercyclical to storage measures. However, the most impactful way to reduce demand – though not included here as it is not a system technology – is investing in efficiency measures like building insulation.

Another way of presenting these measures is in a “Power System Onion” – see below. This hierarchically layers the measures within the onion to demonstrate the reinforcing nature of one measure to the last, starting at the core with societal-led DSR measures to balance in-day demand. Batteries and larger scale battery-like technologies come next, before hydro schemes come into play, each reinforcing the prior measure. As we have seen, DSR measures limit demand and run countercyclical within the onion, and longer term, they will directly offset some of the benefits of battery systems.

The darker outer layers of the onion, the skin, represent the system critical measures to balance the final 15-20% challenge. As we have seen, in Scandinavia, hydro provides the skin as their markets are smaller and they have existing hydro capacity which can be repurposed as a balancing measure. Here in the UK, NESO consider interconnectors, with their import/export potential, as the primary long-duration measure. Given it is non-circular, I have placed an X within the onion to show the discontinuity. For 2030, fossil gas backup (capacity) provides the final measure, while by 2050 the outer skin will likely comprise the hydrogen cycle. 

I hope the Power System Onion provides a way to visualise the balancing challenge, with the final 15-20% requiring extensive systems engineering. My next feature will look to stochastic modelling of the uncertainties to help us quantify the measures needed to ensure integrity of our power system, while Part 9C will look to options and strategies, in particular addressing the discontinuity X, pricing, and the potential benefits of the hydrogen cycle.

In their scenarios, NESO rightly looks to societal change to enhance day to day operability of the system, working from the core of onion out, but the real challenge is providing a resilient skin. Keeping the lights on requires we tackle the onion from both inside out and outside in.