Benefits from geographical diversity in offshore wind

Spreading offshore wind farms more evenly around Great Britain’s coast, in particular lessening the current imbalance between east and west, would have numerous benefits for the electricity system, according to a new report from Regen.

The not-for-profit consultancy said building more offshore wind farms along the west coast, where installations to date have been relatively limited, would improve the consistency of generation, with fewer peaks and troughs that would last for less time.

This would make the electricity system cheaper and easier to operate, lower wholesale power prices and reduce carbon emissions.

The study, conducted in partnership with the offshore wind developers Magnora Offshore Wind, Morwind, Northland Power and Simply Blue Group, modelled a 70GW offshore wind fleet using 20 years of weather data in three different scenario: Stay East, in which the vast majority (67GW) of capacity is installed off the east coast; Lean West, in which most capacity is still located to the east (54GW) but there is also a significant proportion in the west (16GW); and Go West, in which there is an even split between the two sides (35GW each).

The analysis found there would be no sacrifice in total electricity generation from a more balanced geographical spread of offshore wind, with the median annual yield varying by only a couple of per cent between scenarios and highest in Go West at 331TWh.

This generation would be much more consistent, with fewer hours of high (over 80% of installed capacity) or very low (less than 10% of installed capacity) output. In the Go West scenario, there would be an average of 64 hours of low output per year, compared with 110 hours in Lean West and 227 hours in Stay East.

There would additionally be fewer peaks and toughs, with output falling below 10% of installed capacity on only 8 separate occasions per year on average in the Go West scenario, compared to 14 times in Lean West and 31 times in Stay East. The maximum duration of a low power event across the 20-year period would be 35 hours, 48 hours and 58 respectively.

Ramping rates would also be lower, averaging 1.02GW/h in Go West, 1.16GW/h in Lean West and 1.33GW/h in Stay East. The largest fluctuations per year would be on average 7.4GW/GWh, 10.1/GWh and 13.1/GWh.

Regen said increased geographical diversity would have a long list of benefits.

Fewer hours of low output would lessen the need to call on gas generation for back up, lowering marginal wholesale power prices and cutting carbon emissions.

In general, power prices would be less volatile, reducing balancing risks for generators and suppliers, whilst minimising opportunities for traders to profits from speculation. Whilst hard to quantify, the report said it is “clear that there has been a significant amount of speculative pricing and uneconomic ‘bullwhip’ effects during the current energy crisis”.

There would less of risk price cannibalisation, cutting financing costs for investors in renewable generation.

Balancing actions taken by National Grid Electricity System Operator (ESO) would be fewer and less severe, thereby lowering the cost. The report noted that four of the five core elements of system operability as defined by the ESO are directly impacted by the volatility of generation, with two of these – frequency and stability – benefitting from lower ramp rates.

Forecasting errors by all parties would decrease and the ESO would need less of a capacity margin to operate the system reliably.

Spreading generation across the power grid could also reduce network costs. Generation could be located closer to demand, minimising the need to transmit power across the country, and less wind output would need to be curtailed due to network constraints.

The report said to date almost three-quarters of the UK’s 13GW of offshore wind capacity has been installed along the east coast.

It said this concentration has allowed the sector to reduce costs by focussing development and investment and development in the shallower waters of the North Sea near major construction and manufacturing ports.

“However, as the UK energy market grows increasingly reliant upon offshore wind as a cheap and emissions-free energy source, the lack of geographical diversity of the burgeoning offshore wind fleet is not optimal for energy system balancing and price volatility,” it explained.

“The energy system benefits of a more geographically diverse wind portfolio have become increasingly apparent due to current wholesale price volatility and high system balancing costs.”

The report called for an “integrated, strategic approach” to developing, leasing and planning, and urged central and devolved governments, the crown estates, system operators, networks and regulators to all work together to produce an overarching delivery plan for offshore wind that recognises the benefits of geographical diversity.

Regen highlighted the ability of floating wind to overcome some of the challenges of the harsher marine environments on the east coast, which have so far limited deployments, and said future Contracts for Difference (CfD) rounds should continue to provide some form ring-fenced funding for the technology, either through separate pots or minima in the budgets.

The report said the government should consider providing a geographical locational signal within the CfD scheme, for example, by holding regional CfDs rounds or setting regional minima. It said the government could also consider introducing an energy system value strike price differential, although it acknowledged this may be difficult to calculate and administer.

Jack Adkins, project manager and senior analyst at Regen, said: “The UK’s world-leading offshore wind sector will play a vital role in achieving net zero – a fundamental component of UK energy security – but the distribution of wind farms around the UK has a significant impact upon energy system balancing and price volatility.

“With almost three-quarters of the UK’s offshore wind capacity currently on the east coast of Great Britain, the ‘Go West!’ study explores and identifies the benefits that pursuing a more east-west balanced offshore wind fleet could bring to both the UK energy system and energy consumers, such as more consistent generation, a reduction in the cost of energy generation and lower emissions.

“To capture these benefits, we need an integrated delivery strategy and policy and financial mechanisms that support increased diversity of supply, as outlined in this report.’

Becky Fowell, energy analyst at Regen, added: “There is no doubt that offshore wind will play a significant role in the future of the UK’s energy mix and be vital to our energy security. Advancements in floating offshore wind mean that developments in the Celtic Sea and off the north and west coasts of Scotland are no longer unattainable.

“Now is the time to utilise these advancements and ensure that UK consumers reap the benefits provided by an offshore wind fleet that is more equally distributed around the UK.”