Earlier this week I had the pleasure of speaking at the Energy Industries Club dinner on the subject of energy security…here is a copy of my remarks…
Good evening everyone, I’m delighted to be here for the inaugural evening meeting of the Energy Industries Club.
I feel under some pressure with a dinner-time speech to be entertaining. I was scarred a few years ago at a dinner where an EU Commissioner gave a speech between the starter and main course. He wasn’t brief. By the time the charred remnants of the main course were served even the most die-hard Remainers were dreaming of Brexit!
So we successfully avoided that pitfall, but I still feel the pressure. I might be tempted to throw in the odd joke or witty one-liner. I’ll do my best…
As you may know, following the recent Budget, we have a new approach to energy policy: Gaslighting.
It’s kind of you to laugh but that’s not actually a joke. That really is how I feel about large parts of our energy policy at the moment.
It goes something like this: we’re going to have cheap, reliable renewable energy based on wind and solar but we’ll need subsidies to get it going. What’s that? The weather isn’t reliable? Good point, OK right, so we’ll need subsidies for non-renewable energy to come on when it’s not windy and sunny. OK then.
Not OK? Something about grid infrastructure? Oh yes, I guess we don’t have a much of that in the sea. Good point, we’ll have to build some more. But we can delay some of it to keep costs down for consumers. Sorry what? Curtailment? We have to pay wind farms if we can’t use the electricity they want to generate. Oh, that’s annoying. I’m sure it’s still cheap though.
OK now what? Balancing? It’s more expensive to balance the grid when generation varies with the weather.
OK I don’t care. Renewables are cheap and reliable. End of.
Does anyone else feel like they’re being gas-lit?
By the summer of 2021, just before the start of the energy crisis, green levies accounted for 25% of end-user electricity bills, with network costs being 20%. Prices had been rising steadily for two decades at a time when wholesale prices had been relatively benign, and these increases absorbed the capacity of consumers to afford price rises. When wholesale prices abruptly stopped being benign in autumn 2021, consumers very quickly began to feel the pain.
And on top of all of that, the Government has come to a late realisation that we will probably NEVER be able to stop subsidising wind. The original hypothesis was that subsidies were required to support an immature industry but once the technology matured, subsidies could be phased out. Now, if you read REMA, you can see an explicit recognition of the problem of how to recover high capital costs when operating costs and therefore income if that is determined by short run marginal operating costs, are low.
This reminds me of another joke that has been doing the rounds which is rather en point: My energy supplier claims to sell 100% renewable energy. It just updated my direct debit – can someone please tell me when it was that wind and sunshine doubled in price?
In our enthusiasm for renewables, we have rather neglected security of supply. Ironically it is the gas crisis that woke everyone up to this, but we’re actually experiencing two simultaneous security of supply crises: the gas crisis which is well understood and has a recognised solution (ie more gas production outside Russia) and an electricity supply crisis which is only starting to be understood. We have rushed to deploy intermittent renewables, allowing conventional generation to close, assuming that interconnectors will secure our supplies though a diversification effect.
Unfortunately we’re realising late in the day that firstly our weather is more correlated than we had hoped so if the connected country also relies on wind power it might be trying to import at the same time we are, and secondly, there are really only two countries in our geographic region with materially different energy mixes: France which relies on an aging and increasingly unreliable nuclear fleet, and Norway which relies on hydro but has almost no pumping capability, so its resources can literally run out, as nearly happened last year when reservoir levels reached 20 year lows.
So I’ll just mention here that I like to be efficient. When preparing for this evening I went back to various talks I’ve done in the past year to see what I could re-use, and here’s something which came up a lot. I said this:
“I believe it is entirely possible that Norway will impose restrictions on electricity exports.”
In fact, Norway is now doing exactly that. It is at the forefront of explicitly recognising the need to put its own citizens first in the scramble for scarce resources – and plans to legislate this year to reduce electricity exports if necessary to protect domestic energy security. It has also recently restricted export capacity on NSL in response to the fact that Britain had never implemented full export capacity on our side. This has cut the import capacity from 1.4 to 1.1 GW.
So what do we really mean by security of supply? In developed nations we expect that when we press a light switch, the light will come on, and this will be true regardless of the time of day, how many other people are also pressing light switches, or if there are any disruptions to grid infrastructure or generating assets.
Energy security in the electricity market implies an excess of generation capacity over demand. In Britain, electricity demand ranges from about 20 GW on a summer’s night to around 56 GW on a cold winter’s day.
This is a wide margin and it’s set to get wider as we progress along the road towards net zero. The expansion of rooftop solar, which acts like negative demand on the grid, will depress summer demand, while the electrification or partial electrification of heating and transport will increase demand.
We could see some unexpected effects that might see summer demand rise as well, despite the increase in solar PV and that is because heat pumps can be used to provide cooling in summer. As there is currently very little domestic air conditioning in use, this could boost summer demand as people use their heating systems to deliver cooling in summer because they can, irrespective of any increases in summer temperatures.
However, we can probably model most of these effects pretty well. The industry has been managing high levels of demand variability for as long as electricity grids have existed.
But the energy transition is also adding unpredictability to the supply side of the equation. Our energy transition is being built on the basis of intermittent renewable generation, that is weather-dependent sources of electricity.
It is obvious that this leads to much less easily predictable variation – weather forecasting is famously difficult to get right. And it creates two distinct sets of problems – energy gaps which are obvious…when it isn’t wind then you can’t generate electricity with wind turbines, and when it isn’t sunny solar panels won’t produce. That includes at night, something people seem to need to be reminded of surprisingly often.
The second problem is more subtle but no less important and this comes down to the basic physics of our electricity grids. Because Tesla won the Battle of the Currents against Edison, we use alternating rather than direct current.
That Battle was actually quite dirty with Edison and his cronies going to extreme lengths including the public electrocution of horses to demonstrate the dangers of ac, and they connived to ensure that the first electric chairs ran on alternating current. That’s not a joke by the way, that actually happened.
But the ease with which electricity can be moved over long distances with minimal losses using ac rather than dc was the decisive factor and from the 1880s onwards, electricity grids were built using ac.
In the early years, there was no consistency over voltage and frequency levels. In 1920 just 6% of British homes had electricity, and those that did had widely varying services – in London alone there were 24 voltages and 10 different frequencies. In 1921, there were more than 480 authorised suppliers of electricity operating in the UK, generating and supplying electricity.
Nationalisation was seen even by the Conservative government of the time as the solution, and The Electricity Act of 1926 created a central authority to promote a national transmission system.
This grid had a voltage of 132 kV and was the largest peacetime infrastructure project the country had ever seen. It was largely completed by the mid-1930s. 4,000 miles of cable was installed by 100,000 men and quite a lot of horses. The first pylon was erected near Edinburgh in 1928.
The original plan was for the country to be separated into a number of independent regional grids. Each could be connected to a neighbouring grid if required, but typically they were operated separately. The Second World War prompted a change of plan, and with the construction of a bomb-proof national grid control centre in London it was determined that a single national grid would be better. In late 1938, and with some trepidation, the inter-regional isolating switches were closed and the regional grids were all connected. As nothing untoward happened a decision was made in spring 1939 to keep them closed, except in the case of an emergency.
Now I’m coming to the part of the evening everyone looks forward to…the moment the speaker decides to throw in some GCSE physics. I can see you all sitting up in anticipation!
So in 1938 we had a single national high voltage transmission system to which lower voltage regional grids connected, all running on alternating current, with a frequency of oscillation of 50 Hz. That is there are 50 cycles per second.
These oscillations are literally created by the rotation of the turbines in power stations. Alternating current is produced when one magnet rotates inside the magnetic field of another magnet. The current and voltage vary in a sine wave pattern whose frequency is determined by the speed of that rotation. To get to 50 cycles per second, these turbines all turn at 3,000 RPM. In a 60 Hz system they rotate at 3,600 RPM.
If supply and demand go out of balance, the frequency will change
If the demand exceeds supply, the system frequency will fall
If the supply exceeds demand, the system frequency will rise
Electricity grids are sensitive to changes in frequency, and typically deviations of more than around 1% will trigger load shedding – this was seen in GB in summer 2019, when a lightning strike caused two power stations and a large amount of embedded generation to trip.
Demand therefore exceeded supply and the system frequency fell outside its stable tolerance levels, requiring selected load shedding in order to avoid an uncontrolled cascading grid failure. The impact of this is so serious that National Grid ESO has a duty to maintain system frequency within a 1% band of 50 Hz as part of its licence conditions.
In a conventional electricity network, generators don’t just establish a nice alternating current waveform, they are large heavy objects that resist changes to their speed hence providing an important support to the system known as inertia. They act as a brake on changes in system frequency.
However, with the energy transition, not only are we replacing generators which naturally produce alternating current with renewable generation which produces direct current that needs to be electronically converted to ac, we are also reducing the amount of inertia on the grid. As a result the grid is becoming a lot more flighty and controlling grid frequency is becoming harder and more expensive.
System operators must not only fill in the energy gaps from intermittent wind and clouds, they must make sure that this intermittency does not result in frequency deviations greater than operational tolerances. At all times. At all points on the grid.
The energy challenge and the frequency challenge are managed using different tools – energy is more of a macro problem, so alternative sources of generation are needed when wind or solar output is expected to be low.
