Tag: Cruachan

Getting Britain ready for the next generation of energy projects

Key takeaways:

  • As the UK continues to expand its renewable capacity the cost of curtailing wind generation at times of low demand is increasing, adding £806 million to bills over the last two years.
  • Curtailment costs arise from the grid paying to turn down generation due to energy balancing or system balancing issues.
  • Long-duration storage, such as pumped storage hydro, offers a way to absorb excess wind power, reducing the cost of keeping the system balanced.
  • Drax’s plans to expand Cruachan Power Station would increase the amount of excess power it can absorb from 400 MW to over one gigawatt, and rapidly deliver the same amount back to the grid when needed.
  • New financial mechanisms, such as a cap and floor regime, are needed to enable investors to back capital-intensive, long-term projects that will save consumers and the grid millions.

Meeting big ambitions takes big actions. And there’re few ambitions as big, or as urgent, as achieving a net zero power sector by 2035.

This energy transition must mean more low carbon power sources and fewer fossil fuels. But delivering that future requires new ways of managing power, balancing the grid and a new generation of technologies, innovation, and thinking to make big projects a reality.

As the system evolves and more renewables, particularly wind, come online, the UK is forecast to need 10 times more energy storage to deliver power when wind-levels drop, as well as absorb excess electricity when supply outstrips demand, and to maintain grid stability. Pumped hydro storage offers a tried and tested solution, but with no new long-duration storage projects built for almost 40 years in the UK, the challenges of bringing long-term projects to fruition are less engineering than they are financial.

Drax’s plan to expand Cruachan Power Station to add as much as 600 megawatts (MW) of additional capacity will help support a renewable, more affordable, net zero electricity system. But government action is needed to unlock a new generation of projects that deliver electricity storage at scale.

Reigning in excess wind power

Wind is the keystone power source in the UK’s renewable ambitions. Wind capacity increased from 5.4 GW in 2010 to 25.7 GW in 2021 – enough to provide renewable power for almost 20 million homes – and the government aims to increase this to 50 GW by 2030.

However, wind comes with challenges: the volume of electricity being generated must always match the level of demand. If there is a spike in electricity demand when there are low wind-levels, other technologies, such as electricity storage or carbon-emitting gas power, are required to make up the shortfall.

Conversely, if there is too much wind power being generated and not enough demand for electricity the grid often has to pay windfarms to stop generating. This is known as wind curtailment and it’s becoming more expensive, growing from £300 million during 2020 to more than £500 million in 2021.

An independent report by Lane Clark & Peacock (LCP), by Drax, found that over the last two years curtailing wind power added £806 million to energy bills in Britain.

There can also be a carbon cost to curtailing wind power. As more intermittent renewables come onto the system the grid can become more unstable and difficult to balance. In such an event the National Grid is required to turn to fossil fuel plants, like gas generation, that can deliver balancing and ancillary services like inertia, voltage control and reserve power that wind and solar can’t provide.

“It’s lose-lose for everyone,” says Richard Gow, Senior Government Policy Manager at Drax. “Consumers are paying money to turn off wind and to turn up gas generation because there’re not enough sources of ancillary services on the system or renewable power can’t be delivered to where it’s needed.”

“Curtailment costs have spiked this year because of gas prices, and while they might dip in the next two or three years, curtailment costs are only ever going to increase. If there’s wind power on the system without an increase in storage, the cost of managing the system is only going to go up and up.”

Source: the LCP’s ‘Renewable curtailment and the role of long duration storage’ report, click to view/download here.

The proposed Cruachan 2 expansion would help the grid avoid paying to turn off wind farms by increasing the amount it would be able to absorb from 400 MW to over 1,000 MW, and rapidly deliver the same amount of zero carbon power back to the grid should wind levels suddenly drop or the grid need urgent balancing.

Adding this kind of capability is a huge engineering project, involving huge new underground caverns, tunnels and waterways carved out of the rock below Ben Cruachan. However, the challenge in such a project lies less with the scale of the engineering than with its financeability.

From blueprints to real change

The original Cruachan Power Station’s six-year construction period began in 1959. The work of digging into the mountainside was carried out by a team of 1,300 men, known affectionately as the Tunnel Tigers, armed with hand drills and gelignite explosives in an era before modern health and safety practices.

Engineer working at Cruachan Power Station

Expanding Cruachan in the 21st century will be quite a different, and safer process, and one that’s practically, straightforward.

“There is no reason why we physically couldn’t build Cruachan 2,” says Gow. “Detailed engineering work has indicated that this is a very feasible project. There’s no technological reason or physical constraint that would prevent us. It has a large upfront cost, and requires drilling into a mountain, but the challenge is much more on the financial, particularly securing the investment, side of the project.”

Pumped storage hydro facilities today generate their revenues from three different markets: the capacity market, where they receive a flat rate per kilowatt they deliver to the grid; the wholesale and balancing market, where they buy power to store when it’s abundant and cheap and sell it back to the grid when it’s needed, more valuable and used to support the Electricity System Operator in matching supply and demand on a second-by-second basis; and through ancillary services contracts, dedicated to specific stability services.

These available markets present challenges for ambitious, capital-intensive projects designed to operate at scale. With the exception of the capacity market, revenues from these markets are often volatile and difficult to forecast, with no long-term contracts available.

Sourcing the investment needed to build projects on the scale of Cruachan 2 requires mechanisms to attract investors comfortable with long project development lead times that offer stable, low risk, rates of return in the long-term.

Cap and floor

An approach that can provide sufficient certainty to investors that income will cover the cost of debt and unlock finance for new projects is known as a ‘cap and floor’ regime.

With cap and floor, a facility’s revenues are subject to minimum and maximum levels. If revenues are below the ‘floor’ consumers would top-up revenues, while earnings above the ‘cap’ would be returned to consumers. This means investors can secure upfront funding safe in the knowledge of revenue certainty in the long term, whilst also offering protection to consumers.

Such an approach won’t attract investors looking to make a fast buck, but the vital role that it could play in the ongoing future of the UK energy system offers a long-term, stable return. At the same time, the system would save both the grid and energy consumers hundreds of millions of pounds.

The cap and floor system is also not unique, with a similar approach currently used for interconnectors, the sub-marine cables that physically connect the UK’s energy system to nearby countries allowing the UK to trade electricity with them. This means investors are already familiar with cap and floor structures, how they operate and what kind of returns they can expect.

“It’s not just pumped storage hydro that this could apply to,” explains Gow. “There are other, different large-scale, long-duration storage technologies that this could also apply to.”

“It would give us revenue certainty so that we can invest to support the system and reduce the cost of curtailment while ensuring consumers get value for their money.”

The Turbine Hall inside Cruachan Power Station

Cruachan was originally only made possible through the advocacy and actions of MP and wartime Secretary of State for Scotland Tom Johnston. Then it was needed to help absorb excess generation from the country’s new fleet of nuclear power stations and release this to meet short term spikes in demand. Today it’s renewable wind the system must adapt to.

For the UK to continue to meet an ever-changing energy system the government must be prepared to act and enable projects at scale, that bring long-term transformation for a net zero future.

Storage solutions: 3 ways energy storage can get the grid to net zero

Key points:

  • Energy storage plays a crucial role in the UK electricity system by not only providing reserve power for when demand is high but also absorbing excess power when demand is low.
  • The UK’s electricity system’s growing dependency on intermittent renewables means the amount of energy storage needed will increase to as much as 30 GW by 2050.
  • There are three different durations of energy storage needed to help balance the grid: short-term, day-to-day and long term.
  • It will take a range of technologies including batteries, pumped storage hydro and new approaches to meet the storage demands of a net zero grid.

When you turn on a lightbulb – in 10, 20, or 30 years – the same thing will happen. Electricity will light up the room. But where that electricity comes from will be different. As the country moves toward net zero emissions, low carbon and renewable power sources will become the norm. However, it’s not as simple as swapping in renewables for the fossil fuels the grid was built around.

Weather dependant sources, like wind and solar, are intermittent – meaning other sources are needed at times when there’s little wind or no sunshine to meet the country’s electricity demand. Equally as challenging to manage, however, is what to do when there’s an excess of power being generated at times of low demand.

Energy storage offers a low carbon means of delivering power at times of low supply, as well as absorbing any excess of generated power when demand is low, helping to balance and stabilise the grid. As the electricity system transforms through a range of low-carbon and renewable technologies, the amount of energy storage on the UK grid will need to expand from 3 GW of today to over 30 GW in the coming decades.

The storage solution

Even as the UK’s electricity system transforms, from fossil fuels to renewables, the way the grid operates remains primarily the same. Central to that is the principle that the supply of electricity being generated must always match the demand on a second-by-second basis.

Too little or too much power on the system can cause power outages and damage equipment. National Grid needs to be able to call on reserve power sources to meet demand when supply is low or pay to curtail renewable sources’ output when demand drops. During the summer of 2020, for example, lower demand due to Covid-19 coupled with high renewable output resulted in balancing costs 40% above expectations.

“There is a lot of offshore wind coming online in Scotland, as much as 11 GW by 2030 and a further 25 GW planned,” explains Steve Marshall, a Development Manager at Drax.

Offshore wind farm along the coast of Scotland

“It’s great because it increases the amount of renewable power on the system, but the transmission lines between Scotland and England can become saturated as much as 30-40% of the time because there is too much power.”

Electricity storage can provide a source of reserve power, as well as absorb excess electricity. These capabilities are crucial for balancing the grid and ensuring that frequency remains within a stable operating range of 50 Hertz, as well as providing other ancillary services.

Whether it’s absorbing power or delivering electricity needed to keep the grid stable, in energy storage, timing is everything.

There are three main time periods electricity storage needs to operate over:

  1. Fast-acting, short term electricity

Because electricity supply must always match demand, sudden changes mean the grid needs to respond immediately to ensure frequency and voltage remain stable, and electricity safe to use.

Batteries are considered the fastest technology for responding to a sudden spike in demand or an abrupt loss of supply.

Battery technology has evolved rapidly in recent decades as innovations like lithium-ion batteries, such as those used in electric cars, and emerging solid-state batteries become more affordable and more commonplace. This makes it more feasible to deploy large-scale installations that can absorb and store excess power from the grid.

“Batteries are good for near-instantaneous responses. It can be a matter of milliseconds for a battery to deploy power,” says Marshall. “If there’s a sudden problem with frequency or voltage, batteries can respond – it’s something that’s quite unique to them.”

The speed at which batteries can deploy and absorb electricity makes them useful grid assets. However, even very large battery setups can only discharge power for around two hours. If, for example, the wind dropped off for a long period the grid needs a longer-duration supply of stored power.

  1. Powering day-to-day changes in supply, demand, and the grid

When it comes to managing the daily variations of supply and demand the grid needs to be able to call on reserves of power for when there are unexpected changes in the weather or electricity demand from users. Pumped storage hydro power offers a low carbon way to provide huge amounts of electricity, quickly and for periods that can last as long as eight or even 24 hours.

The technology works by moving water between two reservoirs of water at different elevations. When there is demand for electricity water is released from the upper reservoir, which rushes down a series of pipes, spinning water turbines, generating electricity. However, when there is an excess of power on the electricity system the same turbines can reverse and absorb electricity to pump water from the lower to the upper reservoir, storing it there as a massive ‘water battery’.

Pumped storage hydro is a long-established technology, having been developed since the 1890s in Italy and Switzerland. In the UK today there are four pumped storage hydro power stations in Scotland and Wales, with a total capacity of 2.8 GW.

Among those is the Drax-owned Cruachan Power Station in the Scottish Highlands. The plant is made up of four generating/pumping turbines located inside Ben Cruachan between Loch Awe and an upper reservoir holding 10 million cubic metres of water.

Turbine Hall at Cruachan Power Station

Pumped hydro storage facilities can rapidly begin generating large volumes of power in as little as 30 seconds or less. The ability to switch their turbines between different modes – pump, generate, and spin mode to provide inertia to the gird without producing power – make pumped storage hydro plants versatile assets for the gird.

“How Cruachan operates depends on weather,” says Marshall. “We make as many 1000 mode changes a month, that’s how frequently Cruachan is called on by National Grid.”

As the electricity system transforms there will be a greater need for flexible energy storage like pumped storage hydro, this is why Drax is kickstarting plans to expand Cruachan Power Station, however, the specific conditions needed for such facilities can make new projects difficult and expensive.

Cruachan 2, to the east of the original power station, will add up to 600 MW in generating capacity, more than doubling the site’s total capacity to more than 1GW. By increasing the number of turbines operating at the facility it increases the range of services that the grid can call upon from the site.

  1. Long-term electricity solutions

However, storage technologies as they exist today cannot alone offer all the solutions the UK will need to achieve its net zero targets. While technologies like pumped storage can generate for the better part of a day, longer periods of unfavourable conditions for renewables will need new approaches.

In March 2021, for example, the UK experienced its longest cold and calm spell in more than a decade, with wind farms operating at just 11% of their capacity for 11 days straight, according to Electric Insights.

The shortfall in the country’s primary source of renewable power was made up for by gas power stations. But in a net zero future, such responses will only be feasible if they’re part of carbon capture and storage systems or replaced by other carbon neutral or energy storage solutions.

Generating enough power to supply an electrified future, as well as being able to take pressure off the grid and provide balancing services will require a range of technologies working in tandem over extended periods.

Interconnectors with neighbouring countries, for example, can work alongside storage solutions to shed excess power to where there is greater demand. Similarly, rather than curtailing wind or solar power, extra electricity could be used for electrolysis to produce hydrogen. Other functions may include demand side response where heavy power users are incentivised to reduce their electricity usage during peak periods helping to reduce demand.

To achieve stable, reliable, net zero electricity systems the UK needs to act now to not only replace fossil fuels with renewables but put the essential energy storage and balancing solutions in place, that means electricity is there when you turn on a lightbulb.