New targets could create 72 TWh of excess renewable and nuclear power by 2030, LCP says
If the UK meets its expanded renewable and nuclear targets, the country will have excess electricity supply more than half the time by 2030, creating significant opportunities for flexible demand.
In new research from LCP, the company looked at the generation targets set out in the UK Energy Security Strategy as well as expected demand levels, and found that 53% of the hours of the year the UK grid could have a excess supply of renewable and nuclear energy. . By comparison, in 2022, there is only expected to be a 6% oversupply.
The security strategy set a new target of up to 24 GW of nuclear power by 2050 and up to 50 GW of offshore wind power by 2030. It also pointed out that solar power could quintuple by 2035.
“The Energy Strategy has grabbed headlines for ambitious and laudable energy production targets, but closer examination reveals the significant challenge of building a future low-carbon energy mix that delivers value to consumers and ensures security of energy. ‘supply,” said Chris Matson, partner at LCP.
“For more than half the time in 2030, the UK’s renewable and nuclear energy system will produce more energy from renewables and nuclear than it uses. Simply wasting this generation would hurt both consumers and investors. A holistic systems approach is therefore essential to minimize the cost of delivering net zero.
In 2030, a surplus of 72 TWh of renewable and nuclear energy is now expected, or nearly 25% of current demand. 50 GW of demand-side flexibility from technologies such as batteries, electrolysers and interconnects will be needed to utilize all of this excess.
Accelerating the expansion of demand-side flexibility would reduce the cost of grid balancing, mitigate the decline in renewable energy generator revenues, and help consumers recognize the broader benefits of renewable energy. , said LCP.
“The need for significant amounts of flexibility and back-up power shows the scale of investment needed to achieve the government’s ambition to achieve 95% decarbonisation of the power sector by 2030,” continued Matson.
“Without a concerted program of policy and regulatory reform to unlock this investment across a range of supporting technologies, there is a risk that the strategy will fail to reduce long-term bills, and drive them up.”
In addition to the need for demand-side flexibility assets, LCP estimated that 45 GW of additional standby capacity will be needed to provide energy security during periods of low renewable generation.
This gap will likely be filled by bioenergy, the use of hydrogen and carbon capture and power plants enabling storage. But more than 20 GW of this capacity will be used in less than 5% of the hours.
Focusing solely on investing in renewable energy therefore carries risks, as investors will see their assets disabled for periods or fail to generate income, warned Rajiv Gogna, partner at LCP.
“However, a diversified approach that seeks more ‘value-added’ and opportunistic approaches to infrastructure investment can balance this risk by exploring less well-established technologies such as batteries that would be a good fit for generation assets,” he said. said Gogna.