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Green power – the debate hots up

08 Aug 2018 Dave Elliott
Photo of electricity pylon
(Courtesy: iStock/Chalabala)

The National Infrastructure Commission (NIC), the UK government’s advisory body, recently said that the government “should not agree support for more than one nuclear power station beyond Hinkley Point C before 2025”, since renewables were getting cheaper and could prove a safer investment. See my earlier post. The NIC’s view was backed up by a study by the Aurora consultancy.

Aurora looked even-handedly at the non-fossil energy options ahead and concluded that a “mostly renewable or mostly nuclear system both offer among the most promising pathways to decarbonisation, but the level of ambition required in each case is significant. A high-nuclear world would mean building up to 29 GW of nuclear capacity by 2050 – equivalent to 9 new Hinkley Point Cs. A high-renewable world could require up to 26 GW of onshore wind, 68 GW of offshore wind, and 99 GW of solar by 2050”.

In terms of cost-effectiveness, Aurora said “there is little to choose between a high renewable and high nuclear world, provided there is sufficient flexibility on the system to deal with renewable integration costs. However, we would note that this is highly sensitive to cost assumptions, with renewable costs more likely than nuclear to fall faster than expected”.

It admitted that hybrid renewable and nuclear solutions – a bit of both – could also be cost-effective, but said “they are less appropriate for systems characterized by high peak demand and low flexibility from thermal generation, since this increases renewable integration costs”. So it’s a choice of one or the other and, in either case, it has to be done fully. “Pursuing an aggressive renewables policy without adequate support for flexible technologies could increase total system costs by up to £7 billion per year on average, 2030-50. In a flexible system, reaching 70-80% renewable production by 2050 is the cost-optimizing option, with no new nuclear beyond Hinkley Point C needed to meet carbon targets. In a less flexible system, more than 40% renewable production by 2050 increases the cost to consumers. In a high renewable world, system flexibility is therefore critical to cost- effective decarbonization.”

By contrast “cost-effectiveness in a high nuclear world is less reliant on flexibility. In a high nuclear world, the importance of interconnectors, batteries, and DSR [demand side response] declines”. However, the long lifetime of nuclear plants “increases the chance that nuclear investments could prove sub-optimal over the long term, particularly given the potential for rapid renewable and battery cost declines”, whereas, “policies to support system flexibility are always a low regrets option and are key to enabling a high renewable world”.

…renewable costs more likely than nuclear to fall faster than expected

Aurora

It concludes, “it is difficult to reach carbon targets cost-effectively without new nuclear except at very high levels of renewable penetration”, but seems to think that is possible, though it may require, amongst other things, more interconnectors. Its scenario has 17.9 GW of interconnectors which “play a big role not just in the provision of flexibility, but also in meeting carbon targets, accounting for up to 15% of generation by 2050”. However, it notes there are issues: “if future policy accounts for the emissions associated with imports rather than assuming them to be carbon-free, GB would have to build a significant amount of additional low-carbon generation to meet 2050 carbon targets”. It also warns that “network costs are a critical component of whole system costs and could undermine the cost-effectiveness of renewables. More work is needed to understand how they will evolve over time in different future scenarios.”

Finally, breakthrough new technologies are possible, and though “inherently difficult to predict…have the potential to fundamentally disrupt power system economics. A significant change in the relative costs of nuclear & CCS [carbon capture and storage] could lead to different outcomes, though any role for gas CCS is severely limited in a zero-carbon power sector,” and at present “CCS rarely appears to be a cost-effective option for reducing power sector emissions” – it costs 25% more than nuclear. But it claims if nuclear is avoided entirely, then CCS will be needed.

This is a useful bit of work and the full report merits study. It may be a little optimistic on grid balancing, as Energy Matters argued in a critique, but we are entering new territory here. If we are to think in terms of renewables supplying around 80% of UK electricity by 2050, as Aurora suggests in one possible cost-optimal scenario, then at times there would be significant surplus output. This could be converted – via electrolysis – to storable hydrogen to be used to make electricity to balance the grid when renewable availability was low and/or demand for power high. That so-called Power to Gas (P2G) approach to hydrogen generation is still seen as expensive, compared to steam reformation of methane, but it is improving and does not require CCS to make it low carbon: see my forthcoming posts on that. And there is a big incentive for pushing ahead with Power to Gas, not just for grid balancing but also heating.

On that, Aurora looks at the implications for power sector decarbonization of two different approaches to reducing emissions in the heat sector – electrification and hydrogen /greener gas, though its green gas comes mostly from fossil sources, with CCS. It concludes that a green gas/hydrogen heating route would need a 30% increase in 2050 power generation, whereas an electrification approach, with heat pumps being used, would require a 67% increase in power generation, as well as grid reinforcement. It notes that “Hydrogen-based heating puts less strain on the electricity system.”

A similar conclusion emerges from another study of green heat options and costs done for the NIC, by Element Energy and E4Tech, in even more detail. It says it is still tentative, but the “hydrogen-led heat decarbonisation pathway could be lower in cost by several tens of billion pounds than an electrification-led or hybrid gas-electric”. But, like Auroa, the study sticks to the fossil CCS route to hydrogen – it sees P2G as too expensive.

Interestingly though, while both this study and Aurora’s conclude tentatively that the hydrogen route may the cheapest, as I’ve noted before, Imperial College London has produced a report for the Committee on Climate Change (CCC) looking at hydrogen gas grids and domestic electric heat pumps, which says a hybrid mix may be the least-cost option, with the “hydrogen alone” route being the most costly. And, like the NIC, it seems to ignore heat grids.

Looking so far ahead is fraught with difficulties, so specific technology choices for specific end-uses will be hard to make, but some sort of consensus seems to have emerged on the wider picture: if we want to go that way, renewables can supply the bulk of our power by 2050, and also heat and transport fuel, as demonstrated by National Grid’s new Community Renewables scenario. In that, wind and solar dominate power supply (75% by 2030!) and it uses hydrogen for some heat and transport, and also some hybrid electric-gas heat pumps/boilers for heat. Biomass use is limited mostly to power, with a few local heat networks, while there is under 6 GW of nuclear. Fascinating stuff – a mostly non-fossil future. But perhaps not something most oil companies would recognize; see my next (much delayed/held over) post.

Related journal articles from IOPscience

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