By Mark Tarry, MD of AMP Clean Energy’s Urban Reserve project
In its most recent Future Energy Scenarios (FES), National Grid ESO made significant changes to its scenario framework to reflect the changes needed so the UK can hit its net zero by 2050 target. Three of them – Consumer Transformation, System Transformation and Leading the Way – resulted in the UK hitting this target, with Leading the Way achieving it in 2048. And, while the generation mix was different, there was one common theme – all scenarios need significant flexibility on the network.
This highlights the need for investment in our energy infrastructure over the next 5-10 years, particularly in flexibility and longer duration storage, if the grid is going to be fit-for-purpose to cope with the low carbon transition.
However, while it’s relatively easy to turn generating assets off in times of low demand – it’s not as easy to turn them on if the back-up capacity doesn’t exist when there’s a sudden requirement for energy. We need to be able to move to net zero emissions without compromising security of supply and having a fleet of smaller scale flexible assets will be crucial to this. Net zero by 2050 will be impossible without more renewables, but the growth in renewables will need to be supported by reliable, low-carbon, cost-effective flexibility to ‘fill in the gaps’ when the wind doesn’t blow and the sun doesn’t shine.
This means that transitional technologies available now, such as natural gas peaking plants, will be critical until battery storage becomes more economical, and hydrogen becomes viable.
What is encouraging is that – particularly over the last 12 months – we have seen an increase in DNOs tendering for flexibility services. Urban Reserve has so far been successful in two tenders with UKPN as we provide small, localised services close to demand. There is a recognition that – as well as providing electricity where and when it is needed most – procuring flexibility is a more cost-effective alternative to traditional grid reinforcements. The Energy Networks Association also recently launched a consultation on how to deliver more flexibility as part of its Open Networks Project. This is welcome news – any initiative to simplify the process or remove barriers is welcome.
That said, to reach its full potential, the flexibility market needs clear and predictable forward-looking signals to ensure investment is targeted in the right areas ahead of need. It also needs a stable regulatory environment and support or incentives to encourage growth. The continuation of GDUoS (or credits paid to generators) is key to this and sits well alongside flexibility procurement which can better reflect shorter term and geographically specific requirements of the network. New flexible generation capacity cannot be turned on overnight – it takes years to find a project and see it through to completion which is why stable forward-looking signals are so important.
What is clear is that the need for more flexibility is growing and Urban Reserve is continuing with its plans to develop generation in areas where it’s needed most. We recently announced we have secured planning permission for our 29h natural gas peaking plant. We’re already in the delivery phase of 80 MW across 19 projects and are aiming to add a further 45 MW, so that by early 2021 there will be 125 MW operational.
So, the message to DNOs is, we are continuing to develop and invest in projects so that we can support the flexibility agenda. The latest FES shows that it is crucial to ensuring we have a secure and stable energy system that can help the UK reach its net zero target. We are ready to rise to the flexibility challenge, we are developing projects in areas of demand pressure, and we want to provide a service that both supports the low-carbon transition and is cheaper than grid reinforcements.
However, we need time, and this requires forward-looking investment signals, stability in the regulatory framework and continuation of credits paid to generators to make sure we invest ahead of need.