Britain ranks eighth out of nine northern European countries in attracting and facilitating investment in electricity system flexibility, a new industry report finds
Delivering flexibility is crucial to power sector decarbonisation and achieving Net Zero targets
Regulatory uncertainty, lack of visibility on returns, and technical challenges connecting to the network are delaying investment in flexibility and could hamper renewables deployment in the 2020s
Regulatory uncertainty, lack of visibility on returns, and technical challenges are impeding investment in flexibility services to support Britain’s electricity network as more renewables come online, risking delays in the transition to a greener future, an industry report said.
The Energy Transition Readiness Index, a report published by the Association for Renewable Energy & Clean Technology (REA) and commissioned by Eaton and Drax, reviewed regulation and market access, social and political support for the energy transition, and deployment of enabling technologies such as smart meters in nine northern European countries.
Britain, which ranked eighth out of the nine countries in the index, scored poorly on market factors such as a clear and stable regulatory and market framework. The report also highlighted potential difficulties accessing the distribution network and a lack of progress on delivering smart electric vehicle charging.
Flexibility is becoming increasingly important as more variable renewables such as wind and solar replace Britain’s large fossil-fuelled power stations to meet targets to cut carbon emissions. Large generators typically provided flexibility by supplying power during peak demand and ensuring that the system’s voltage and frequency remained within operational limits.
The Netherlands topped the league table of nine countries. Finland, Sweden, Denmark, Ireland and Norway also scored high, while Germany, Britain and France lagged.
Dr Nina Skorupska, Chief Executive of the REA said:
“Decarbonising power means delivering flexibility. In a world of very low-cost variable renewable electricity generation, grids need to be organised differently and some services which were once taken for granted need to be actively procured.
“Crucially, as renewable power prices fall around the world every country will be experiencing the same shift. If Britain becomes a flexibility pioneer, then a whole world of markets for exporting our products and services opens up. Whilst this index shows we’re lagging behind, there’s still time to bounce back.
“That’s why the REA is calling for the next government to address the barriers to flexibility by delivering wholesale systems change and reform Ofgem as a priority.”
Drax Head of Strategy Robert Riley said:
“Flexibility is essential to enable net-zero carbon in Britain for 2050. It reduces the risks of power cuts and builds resilience into the grid so that the system can handle the volume of intermittent renewables that we’ll need. Without these flexibility services, it’s going to be much harder, and more costly, to transition to a cleaner electricity system.
“There’s a huge potential for innovative flexible technologies to play a role. More could be done to provide a level playing field, and clarity on business models so that they can contribute to the zero-carbon ambition.”
Drax already provides a number of flexibility services in the UK, including frequency management, inertia and reserve power from its biomass-powered plant in Yorkshire, hydro in Scotland and is looking to provide further flexibility services including from rapid response gas plants.
Eaton Head of Energy Storage Business Fabrice Roudet said:
“We welcome Britain’s ambition and its strong policy commitment to decarbonisation, encouraging new flexibility technologies and business models. However, we urgently need more clarity and an end to the flux to provide the certainty needed to spur private investment in the new technologies that will be required to ease the transition to a high-renewable energy future.”
Robert Hull, author of the report said:
“In Britain, the strong ambition for the energy transition and growing flexibility markets hasn’t yet translated into the market and regulatory framework, which is complex and slow to change.”
- Drax is working with Eaton to supply energy storage to small businesses.
- Pairing energy storage with on-site micro renewables such as wind and solar helps maximise the value of the renewable energy and gives customers more flexibility.
- Robert Hull, who authored the report, is an industry leader with over 30 years’ experience, including at Ofgem, National Grid and consultancy KPMG.
- The report was based on contributions from utilities, industry associations, grid operators, energy technology companies and academics in northern Europe as well as publicly available data on the sector.
- The northern European countries were selected for their similar ambitions on the energy transition.
The Index ranked the countries as follows:
- The Netherlands
- Great Britain
Case study on battery energy storage
Drax has partnered with Eaton to supply and connect battery storage systems to small businesses that are already customers of Drax, such as farms and offices, so they can store power generated from on-site micro renewables like wind turbines and solar.
This allows Drax’s customers to maximise the value of the renewable energy they generate, either using it when it is required or selling it back to the grid during peak demand.
Drax and Eaton have connected three Eaton xStorage Buildings storage systems and are installing another five by the end of this year and four early next year with a total capacity of around 600 kWh. These are a mix of 40 kWh and 80 kWh capacity from new and second-life batteries.
The REA is the UK’s largest trade association for renewable energy and clean technologies with around 550 members operating across heat, transport, and power. The REA is a not-for-profit organisation that represents renewable energy and clean technology companies operating in over fourteen sectors, ranging from biogas and renewable fuels to solar and electric vehicle charging. Membership ranges from major multinationals to sole traders.
For more information, visit: www.r-e-a.net
Eaton is a power management company with 2018 sales of $21.6 billion. We provide energy-efficient solutions that help our customers effectively manage electrical, hydraulic and mechanical power more efficiently, safely and sustainably. Eaton is dedicated to improving the quality of life and the environment through the use of power management technologies and services. Eaton has approximately 100,000 employees and sells products to customers in more than 175 countries.
For more information, visit www.eaton.com.
Drax Group’s ambition is to enable a zero carbon, lower cost energy future. Its 2,600-strong staff operate across three principal areas of activity – electricity generation, electricity sales to business customers and compressed wood pellet production.
Drax owns and operates a portfolio of flexible, low carbon and renewable electricity generation assets across Britain. The assets include the UK’s largest power station, based at Selby, North Yorkshire, which supplies five percent of the country’s electricity needs.
Having converted two thirds of Drax Power Station to use sustainable biomass instead of coal it has become the UK’s biggest renewable power generator and the largest decarbonisation project in Europe.
Drax owns two B2B energy supply businesses:
- Haven Power, based in Ipswich, supplies electricity and energy services to large Industrial and Commercial sector businesses.
- Opus Energy, based in Oxford, Northampton and Cardiff, provides electricity, energy services and gas to small and medium sized (SME) businesses.
For more information visit www.drax.com
REA General Election 2019 manifesto top level asks:
- Ensure that the funding, integrated planning and delivery of the wholesale systems change that’s needed to decarbonise the economy sits with No 10 and the Cabinet Office. An independent body with strong enforcement capabilities should be appointed to ensure the Government produces policy that supports decarbonisation in line with the Carbon Budgets and advice of the Committee on Climate Change.
- Ensure that renewable energy and clean technology are central to a Net Zero Treasury test, as set by Committee on Climate Change and enforced by an independent body, for Government funding; and that the Treasury implements a more effective taxation system that incentivises these technologies instead of fossil fuels.
- Reform Ofgem, in part by including decarbonisation as a central mandate, alongside consumer protection, and ensure energy network operators are sufficiently incentivised to modernise the energy systems so that they can deliver a major expansion of renewable energy generation capacity and meet the 5th Carbon Budget.
- Help local authorities to reach Net Zero by providing ring-fenced funding for measuring and reporting on progress on the number of zero-carbon buildings, energy efficiency, effective waste management, decarbonising transport fleets while valuing soil quality and natural capital.
- Deliver a just transition by developing a workforce strategy that supports the renewable energy and clean technology sector to provide high-quality skilled jobs for existing fossil fuel sector workers transitioning to the new economy, and future workers, across the UK.