What mix of generation will provide the cheapest total system cost for the GB electricity system after the 30 minute balancing requirement is met, while still meeting carbon reduction targets? Keith Bell, ScottishPower Professor of Smart Grids, University of Strathclyde, and Graeme Hawker, Research Associate, University of Strathclyde, argue there is no simple answer given that calculating costs is next to impossible due to uncertainties around such factors as storage and demand-side management.
What future mix of generation will provide the cheapest total system cost for the GB electricity system after the 30 minute balancing requirement is met, while still meeting carbon reduction targets?
In this working paper, Keith Bell, ScottishPower Professor of Smart Grids, University of Strathclyde, and Graeme Hawker, Research Associate, University of Strathclyde, draw on modelling produced by the Energy Research Partnership to argue that firm conclusions on cost are difficult to reach due to complexities around such factors as interconnectors, storage and demand-side management.
Key points include:
- A significant volume of new low-carbon capacity is required, but the exact amount depends on what can be achieved with demand side participation, and in particular, interconnection and development of a single European electricity market that includes appropriate incentives for decarbonisation and security of supply treated on a Europe-wide basis.
- The differences in economic value of different generation mixes are smaller than the uncertainties in costs of those individual sources, and there is a strong need for ongoing analysis which tracks the evolution and trajectory of those costs, in particular around offshore wind, nuclear power and CCS.
- The cost of procuring response and reserve seemingly remains a relatively small proportion of Total System Cost and so should not be viewed as a key driver for policy.
- If new sources of flexibility are required, then these requirements should be set into the specification of developing technologies such as new nuclear, biomass, CCS and emerging techniques in wind power control, rather than attempting to impose flexibility constraints retrospectively or at a late stage in the technology development process.
- The long lead times of nuclear installations, and the lack of certainty over CCS development, mean that, in order to meet interim targets, the development of wind and solar PV installation should be continued, even if they subsequently do not turn out to be the long-term cost-optimal solution. However, it remains the case that new sources of reliably dispatchable capacity are essential to meet emissions targets over the coming years.
- The new capacity of low carbon generation required to be installed to meet emissions targets means that we do not have the luxury of waiting for certainty on relative costs.
