Net zero ‘hard yards’ for the electricity grid must start now

The Easter weekend was the greenest bank holiday on record as far as power generation is concerned, but there is still a lot of work to do before net zero can become a reality, as Ed Reid, head of strategy at Centrica Business Solutions, explains.

The Easter weekend saw the UK’s electricity system set a record for green energy generation.

Thanks to windy and sunny weather, combined with low demand due to the bank holiday, for a short period on Easter Monday low-carbon energy sources generated 80 per cent of Britain’s power.

No coal was burned, and the remainder of the demand was met by gas and nuclear generation, along with smaller amounts from imports and other sources including biomass and hydro power.

Each new record is another important step in the right direction towards the target of net-zero carbon by 2050.

But, while these achievements are cause for celebration, the past six months have laid bare the significant vulnerabilities that exist in the UK’s power generation infrastructure.

The urgent need for flexibility

Supply margins in Britain were the lowest this winter for four years. Between November to January the grid issued no less than six electricity margin notices (EMN), warning of a serious shortfall in the capacity buffer that ensures security of supply across the country.

The reason for this is that, while the changeover to renewable sources is well underway, we are still using chiefly a centralised generation and commodity-consumption model that is not compatible with the new energy mix.

In order to ensure energy security as we move towards net-zero, the power distribution system needs to be re-engineered. It needs to be able to operate with more flexibility so it can manage supply and demand, something that is particularly important when managing the surges and troughs in supply associated with renewable energy.

Simply put, as the penetration of renewable energy increases we must be able to store energy generated through renewable sources at times of excess, ready to deploy when supply is reduced. These are the hard yards that will help us reach a net zero position for the power system.

Currently, it’s common for renewable energy sources to be curtailed or ‘switched off’ when generation is out stripping demand to avoid any surplus energy in the system. Clearly, this is incompatible with the UK’s net-zero ambitions.

Re-engineering the national system may still sound like a radical proposal to some, but it has been acknowledged as an essential part of the pathway towards net-zero in the government’s latest white paper, released in December. The paper also included a raft of other positive proposals and commitments in areas including electric vehicle adoption.

Another proposal is revamping the capacity market to more easily allow small scale energy generators – such as businesses with on-site energy generation technology – to sell energy they aren’t using back to the grid for profit. Not only does this create an extra degree of flexibility in the system, but it gives firms a financial incentive to play a role as we shift towards a more modern, decentralised power network.

Now is the time

Flexibility in the energy system will be essential if the UK is to have any chance of hitting net zero by 2050. However, what is still missing is a clear timetable for change.

We need revisions to the energy system and energy consumers large and small to take on a new role as generators. Already, energy suppliers are working with their customers – particularly those with the highest levels of energy use – to explore the financial and technological options that already exist to make this possible.

However, it won’t happen fast enough or at sufficient scale to make the progress that is needed unless the change is driven and properly supported by government policy and robust incentive schemes.

While it is encouraging that the energy white paper, published at the end of 2020, accepts this reality and includes flexibility as a key enabler for the future of the energy grid, now is the time to make firm commitments on when real change will happen.

Establishing a more flexible energy network is just the starting point for the large-scale changes that need to be made, and time is running out. Flexibility markets will allow grid operators to manage fluctuations at both national and local level more sustainably and at least cost to the consumer.

Therefore, we believe local flexibility markets are needed by 2023, and we’re calling on the government to make good on the promise it has made in its white paper and act now.