Tag: wind power

Harnessing Scotland’s landscape to power a renewable future

Key takeaways:

  • Scotland’s ambitious plan to expand its wind capacity­ and reach net zero by 2045 will require greater levels of energy storage
  • Plans to expand the storage and generation capacity of Cruachan pumped storage hydro station from 440 MW to over 1 GW can help support a re­­newable future
  • Greater levels of energy storage can also reduce the costs of operating the grid and enable the greater utilisation of renewable electricity sources such as wind.
  • Expansion plans for Cruachan would bring as many as 900 jobs during the construction phase across the supply chain and continue Drax’s commitment to local communities and environments
  • The project is a large-scale and long-term infrastructure solution to some of the critical issues faced by Scotland’s electricity network.

The hit Star Wars TV series Andor might be set a long time ago in a galaxy far, far away, but audiences in Argyll and Brute may recognise a local landmark on the titular distant planet.

Cruachan Power Station’s 316-metre-long buttress-style dam served as a setting for the space thriller. However, here on planet Earth, it has another big role to play in supporting Scotland and the UK’s efforts to reach net zero emissions.

The pumped storage hydro station, known as the ‘Hollow Mountain’, complements Scotland’s wider strategy to expand its onshore wind capacity to 20 gigawatts (GW) by 2030. The plant’s ability to absorb excess electricity at times of low demand, and discharge it again when needed, allows it to play a key role in balancing and supporting the national transmission system.

As Scotland and the rest of the UK move to a future increasingly powered by intermittent renewables, ambitious plans to increase Cruachan’s capacity to more than 1GW, will also help create jobs in Argyll and Bute and support communities through the net zero transition.

Scotland’s wind power potential

Scotland’s famously blustery, wet weather and dramatic landscapes of mountains and lochs has long enabled it to pioneer hydro schemes along its rivers, pumped storage hydro on its mountainsides, and wind turbines on and offshore.

Wind power contributed heavily to Scotland achieving 97% renewable electricity generation in 2020. And with more than 17 GW of additional capacity in the pipeline, Scotland has the potential to be the wind powerhouse of the UK – in 2021, Scotland exported 33% of its generation in net transfers to England and Northern Ireland, having previously set a record 37.3% in 2020.

However, simply generating a lot of power isn’t the whole story. Generating too much power can even be a problem for grids if there is nowhere for that power to go. Currently, constraints in the transmission system limit how much power can be exported from Scotland to meet demand in other parts of the UK.

When generators start producing these surpluses, the grid operator has to pay wind farms to turn them off. It’s estimated that wind curtailment costs added £806m to energy bills in Britain in 2020 and 2021. This is where energy storage comes in, offering somewhere for power to be redirected and reducing curtailment costs.

Enter Cruachan. At maximum load Cruachan Power Station can generate 440 MW, enough to power 1 million homes, when water from the upper reservoir is released, flowing through the plant’s four turbines, and entering Loch Awe below. But when there is more electricity on the system than demand, excess electricity can be used to power turbines that pump water up from Loch Awe to the upper reservoir where it’s stored until needed.

Pumped storage hydro, as this system is called, offers long-term, large-scale energy storage to the UK’s electricity system, helping to reduce costs and prepare for a renewable-led future.

The large-scale, long-term storage solution

Since opening in the 1960s Cruachan has only become more important in helping to stabilise an increasingly renewable UK, while supplying ancillary services like inertia to the grid. The Cruachan expansion plan to expand the facility and bring its ability to absorb and discharge electricity to more than 1 GW can offer a host of benefits to the grid and power to consumers across the country.

Cruachan’s ability to reach full generating capacity in less than 30 seconds means that it can respond quickly to fluctuations in supply and demand. When Cruachan provides power back to the system in times of high demand, it can in turn lead to lower peak power prices. This becomes even more important at a time of high gas prices, when ordinary consumers are feeling the impact of rising energy costs more than ever.

Increasing Cruachan’s capacity to generate and absorb power can help reduce transmission system costs and wind curtailment. It also offers a zero-carbon source of stabilising ancillary services to the grid, which have historically been provided by gas generators. As the proportion of gas generation decreases and the proportion of intermittent renewables generation increases, low-carbon generators that are able to provide these services will become increasingly more important.

Importantly, the Cruachan expansion is a long-term solution. The expanded facility would have an operational life span of more than half a century, significantly longer than the 10-15 years offered by lithium-ion battery storage solutions.

However, there is a need for a financial mechanism to de-risk the project for investors and offer value for money for consumers. The cap and floor mechanism, which ensures generating revenues remain within a specific range, is currently used for interconnectors to stabilise revenues by offering sufficient certainty to investors that income will cover the cost of debt, which unlocks finance for new projects. A similar mechanism could be introduced to support energy storage technologies that will be needed to support a renewable future, such as the Cruachan expansion. The UK government must act quickly to implement the mechanism and realise the opportunity that storage can provide to the UK and Scotland.

Making the Cruachan expansion a reality  

Expanding Cruachan is a long-term, large-scale project that will create a range of jobs and economic benefits and help support the local economy through the transition to net zero.

“I am absolutely delighted that Drax is progressing plans to expand the Ben Cruachan site,” says Jenni Minto, Member of Scottish Parliament. “This will not only support 900 jobs and create a pumped storage facility that will be able to provide enough renewable energy to power a million homes, it will provide £165 million benefit to the local economy during construction.”

In addition to 150 on-site local construction jobs, the project’s supply chain will create opportunities across a range of industries, from quarrying and engineering, to transport and hospitality.

 “The Cruachan extension is a really exciting project and one that’s really important for Scotland.” says Claire Mack, CEO Scottish Renewables. “It brings together a number of our really important skills, including civil engineering and electrical engineering. What we really want to see is a renewables industry that’s thriving but also driving economic gain in Scotland.”

Cruachan has operated in the region for more than half a century and has supported local communities through more than just job creation. This includes a donation to The Rockfield Centre in Oban to help fund a new community hub, offering education as well as a social space. Following Cruachan’s appearance in Andor, Drax also made a five-figure donation to several charities and good causes across Argyll, including Oban Mountain Rescue’s efforts to create a rural defibrillator network.

As well as lending a helping hand to local communities, Cruachan’s teams have always taken precautions to minimise any impact on the natural environment and preserve the area’s biodiversity and natural beauty.

The Cruachan expansion is an engineering project on an epic scale. It will involve carving huge new underground caverns, tunnels, and waterways out of the rock below Ben Cruachan. But in doing so it will create long-term opportunities for the local community and a key piece of infrastructure to take Scotland into a net zero future.

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.

5 exciting energy innovations that you should know about in 2020

As we head into the 2020s, it’s an exciting time for energy. A deeper level of climate consciousness has led to crucial changes in populations’ attitudes and thinking around how we power our lives – adapting to a new set of energy standards has become essential.

It’s also driving innovation in energy technology, leading to the rise of a number of emerging technologies designed to support the global energy transition in new ways. From domestic solar and wind generation, to leaps forward in recycling and aeroplane fuel, here are five new energy ideas in the 2020s pipeline.

Miniature turbines for your garden

Think of a wind farm and you might think of giant structures located in remote, windswept areas, but that’s quickly changing.

IceWind is developing residential wind turbines that use the same generator-principal as large-scale wind farms, just on a much smaller scale. A set of three outer and three inner vertical blades rotate when the wind passes through them, providing spinning mechanical energy that passes through the generator and is converted to electricity.

Constructed from durable stainless steel, carbon fibre and aluminium, the CW1000 model can handle wind speeds of up to 134 miles per hour. To ensure they’re fit for domestic use, the units are adapted to have a maximum height of just over 3 metres and make less than 40 decibels of noise – roughly equivalent to quiet conversation.

The Icelandic company says it aims to decentralise and democratise energy generation by making wind power accessible to people anywhere in the world.

Expanding solar to cover more surfaces

As solar technology becomes more widespread and easier to implement, more communities are turning to a prosumer approach and generating their own power.

Roof panels to date have been the most common way to domestically capture and convert rays, but Solecco is taking it a step further, offering solar roof tiles. These work in the same way as roof panels, using photovoltaic cells made of silicon to convert sunlight into electricity. But by covering more surface area, entire roofs can be used to generate solar energy, rather than single panels.

Environmental Street Furniture takes it a step further by bringing small scale solar generation into many aspects of the urban environment such as smart benches, rubbish bins, and solar lighting in green spaces. This opens up opportunities for powering cities, including incorporating charging stations and network connectivity, which in turn enables social power sharing.

Re-purposing plastic 

Global recycling rates currently sit at approximately 18%, indicating there are still further steps to take in ensuring single-use products are eliminated.

Plastic is a major target in the war on disposal, and for good reason. By 2015, the world had produced over seven billion tonnes of plastic. Greenology is tackling this by harnessing a process called pyrolysis to turn plastic into power. By heating waste at a very high temperature without oxygen, the plastic is breaks down without combusting.

This process produces bio-oils, which can be used to create biofuels. The benefits of this innovative approach to waste are twofold: not only can plastic be repurposed, which minimises the lasting impact single-use plastic has on the planet, but the creation of biofuel offers a power source for everything from transport to generating electricity.

Storing heat for the home

Decarbonising heating is one of the global challenges yet to have a clear answer. Pumped Heat Ltd (PHL) is developing a potential solution with its heat battery technology. The company has found a solution that enables its devices to charge up and store electricity during ‘off-peak’ hours (when electricity is at its cheapest) and then use this energy to generate heating and hot water for homes as it is required. As the grid continues to decarbonise, and as renewable power becomes cheaper and more accessible, the electricity used to charge these units will approach zero carbon content.

The heat battery technology utilises vacuum insulation, losing 10 times less heat than a conventional night storage heater. In contrast, air sourced heat pumps (a more commonly used type of heat pump), operate in real time when a home needs heating. They take water at its delivery temperature (which can be very cold, during the winter months) and heat it using electricity available at that time. Pumped Heat’s storage system instead ensures there is always heat available, maintaining a consistent temperature for hot water or central heating, rather than just when there is an excess of electricity.

The company claims the benefit of using a heat battery system is that it is cheaper than an oil or LPG boiler, in a world where renewable electricity production, both domestic and on a national level, is only set to increase.

Waste-powered planes

As some of the most fossil fuel-reliant industries in the world, travel and transport are actively seeking alternative and more sustainable ways to keep them powered in long run.

Velocys aims to do this using waste. The company is developing sustainable fuels for aviation and heavy goods transport, using the Fischer-Tropsch method of gasifying waste. This involves turning waste materials – such as domestic refuse and woody waste – into clean jet fuel using a catalytic chemical reaction, where synthesis gases (carbon monoxide and hydrogen) are converted into liquid hydrocarbons that can then be used for fuel.

Not only does this make use of waste products that could have ended up in landfill, but it produces much cleaner fuels, that emit less particle matter and harmful pollutants into the atmosphere.

As we enter a new decade of invention, the world is focusing on more sustainable alternatives to power our lives, and these innovative solutions to current environmental issues will continue to inspire creativity.

Is renewable-rich the new oil-rich?

Aerial view of hundreds solar energy modules or panels rows along the dry lands at Atacama Desert, Chile. Huge Photovoltaic PV Plant in the middle of the desert from an aerial drone point of view

We’re all familiar with the phrase ‘oil-rich’ nations, but as low carbon energy sources become ever more important to meeting global demand, renewable energy could become a global export. With a future favouring zero-carbon and even negative emissions innovation, here are some countries that are not only harnessing their natural resources to make more renewable energy, but are making progress in storing and exporting it.

Could these new opportunities lead us to one day deem them ‘renewable-rich’?

Could Europe import its solar power supply?

With the largest concentrated solar farm in the world, Morocco is already streets ahead in its ability to capture and convert sunlight into power. The 3,000 hectare solar complex, known as Noor-Ouarzazate, has a capacity of 580 megawatts (MW), which provides enough power for a city twice the size of Marrakesh.

Noor-Ouarzazate Power Plant, Morocco. Image source: ACWA Power

Its uses curved mirrors to direct sunlight into a singular beam that creates enough heat to melt salt in a central tower. This stores the heat and – when needed – is used to create steam which spins a turbine and generates electricity. This has helped keep Morocco on course to achieve its goal of deriving 42% of its power from renewable sources by the end of 2020, which potentially means a surplus in the coming years.

Morocco already has 1.4 gigawatts (GW) of interconnection with Spain, and another 700 MW is scheduled to come online before 2026. The country’s close proximity to Europe could make its solar capacity a source of power across the continent.

Africa’s geothermal potential

Olkaria II geothermal power plant in Kenya

Kenya was the first African nation to embrace geothermal energy and has now been using it for decades. In 1985, Kenya’s geothermal generation produced 45 MW of power – 30 years later, the country now turns over 630 MW.

Kenya’s ample generation of geothermal electricity is due to an abundance of steam energy in the underground volcanic wells of Olkaria, in the Great Rift Valley. In 2015, the region was responsible for providing 47% of the country’s power.

Currently the Olkaria region is thought to have a potential capacity of 2 GW of power, which could help to provide a source of clean energy for Kenya’s neighbours. However, there is potential for the rest of East Africa to generate its own geothermal power.

In this region of the continent there is an estimated 20 GW of power generation capacity possible  from stored geothermal energy, while the demand for the creation of usable grids that can connect multiple countries is high. Kenya is currently expanding its own grid, installing a planned 3,600 miles of new electrical wiring across the country.

Winds of change

China’s position in the renewable energy market is already up top, with continuous investment in solar and hydro power giving it a renewable capacity of more than 700 GW

The country is also home to the world’s largest onshore wind farm, in the form of the Gansu Wind Farm Project, which is made up of over 7,000 turbines. It is set to have a capacity of 20 GW by the end of 2020, bringing the nationwide installed wind capacity to 250 GW.

With China exporting more than 20,000 gigawatt-hours (GWh) of electricity in 2018, large scale renewable projects can have a wide-reaching effect beyond its borders. South-Asia is the primary market, but excesses of power in Western China have stoked ideas of exporting power as far away as Germany.

Can the US store the world’s carbon?

In the quest for zero-carbon energy it won’t just be nations that can export excess energy that could stand to profit – those that can import emissions could also benefit.

While many countries are developing the capabilities to capture carbon dioxide (CO2), storing it safely and permanently is another question. Having underground facilities that can store CO2 creates an opportunity to import and sequester carbon as a service for other nations. Norway is already doing it, but the US has the greatest potential thanks to its abundance of large underground storage capabilities.

The Global CCS Institute highlights the US as the country most prepared to deploy carbon capture and storage (CCS) at scale, thanks to its vast landscape, history of injecting CO2 in enhanced oil recovery, and favourable government policies.

The Petra Nova plant in Texas is also known as the world’s largest carbon capture facility. The coal-power station captured more than 1 million tonnes of CO2 within the first 10 months of operating as a 654 MW unit.

Carbon capture facility at the Petra Nova coal-fired power plant, Texas, USA

Chile’s hydrogen innovation

Hydrogen is becoming increasingly relevant as an energy source thanks to its ability to generate electricity and power transport while releasing far fewer emissions than other fossil fuels.

Chile was an early proponent of energy sharing with its hydrogen programme. The country uses solar electricity generated in the Atacama Desert (which sees 3,000 hours of sunlight a year), to power hydrogen production in a process called electrolysis, which uses electricity to split water into oxygen and hydrogen.

Chile plans to export the gas to Japan and South Korea, but with global demand for hydrogen set to grow, higher-volume, further-reaching exporting of the country’s hydrogen could soon be on the way.

Going forward, these green innovations – from carbon storage to geothermal potential – could increasingly be shared between countries and continents in an attempt to lower the overall carbon footprint of the world’s energy. This could create a global power shift toward nations which, rather than having high capacity for fossil fuel extraction, can instead use a different set of natural resources to generate, store and export cleaner energy.

How getting renewable energy from your supplier actually works

Where does our electricity come from? One answer might be the power stations, wind turbines and solar panels that generate it. You might even go as far as to say the wind, sun, water, biomass and gas powering those stations. Or even the network companies transporting that power around the country. But there’s also a very important middle-man in this process: electricity suppliers.

Most of Great Britain gets its power from one of the ‘Big Six’ energy suppliers, which buy electricity from the wholesale market and then sells it to consumers. However, with more businesses and consumers looking for less carbon-intense electricity sources, there are now a whole host of smaller companies taking on the incumbents and offering all-renewable electricity.

From Ovo to Bulb to Drax’s own Haven Power and Opus Energy, consumers and businesses have more and greener options than ever about where to buy their electricity, with many even offering 100% renewable electricity.

But how do these companies ensure the megawatts powering homes, offices and street lights come from renewable sources?

Cleaning up the river

The electricity we use doesn’t just flow through a single cable from a power station to our houses. It travels through what’s called the transmissions system, which is run by National Grid ESO and local distribution network operators.

Apart from off-grid installations like solar panels on buildings, some of which are unable to export their unused power, all the electricity generated by different sources around the country goes into this same system. It means megawatts generated by a wind turbine get mixed up with those generated by a nuclear reactor or a coal power station.

Think of it as a river. Although it is its own entity, it is fed by multiple streams of water coming from different sources. In the case of electricity, megawatts from various generators are fed into a central system, which then enter homes, offices and devices around the country.

So, what makes green power generated from renewable sources, green power used in homes?

Suppliers can’t control exactly what megawatts you use, but they can influence the makeup of the overall ‘river’ your electricity is pulled from by what electricity they agree to buy and offer to their customers.

Renewable suppliers match the amount of electricity their customers use with the amount they buy from renewable sources. So, if a home uses 4 megawatt-hours (MWh) a year, a supplier will need to ensure it buys an equal amount of power from National Grid, which National Grid sources from generators. If that supplier offers 100% renewable power, it will need to ensure it has the right kinds of deals in place with renewable generators to deliver that amount of power.

It means that while the river of electricity is still a mix from different streams, more of the water will come from renewable streams. Therefore, if more homes and businesses switch to renewable suppliers, more of the overall river will be renewable, which will in turn help to decarbonise the electricity system, enabling a lower-carbon economy.

But how does this fit into the existing electricity business and infrastructure?

But how do suppliers actually buy renewable power from generators?

The business of electricity

To understand how suppliers ensure they are buying renewable power you first need to understand how the business works. Or at least, how it used to. The most obvious place to start is with the generators.

Be they gas power stations or an offshore wind farm, the generator is where electricity is produced and are often owned by a supplier.

Suppliers can buy electricity from their own generators, often months or years ahead of delivery. But if there is a shortfall, the supplier can also buy electricity on the wholesale market, where other generators can sell their electricity.

Because suppliers are on a competitive market, their aim is to buy the electricity for the lowest possible price and sell it for more – but at a better rate than rivals. Measures like carbon prices or green incentives help lower the cost of renewable and low-carbon generation, and position it as a more economically viable purchase than more expensive fossil fuels like coal.

Renewable-only suppliers also want to buy electricity as cheap as possible and sell it as affordably as possible. But unlike standard suppliers they only buy electricity from renewable sources.

This can be done by purchasing electricity from independent renewable generators on the wholesale market, or arranged through what are known as Power Purchase Agreements (PPAs) – longer-term contracts between generators and suppliers agreeing on a specific amount of power.

The advantage of these for the renewable generator is it secures revenue for the future, while for the supplier it means a dependable source of electricity. For large installations, these deals are often signed before construction even begins to ensure investors there will be a return.

Transitioning to a low-carbon electricity system, however, is not just about suppliers buying more electricity from renewable sources.

The future of electricity suppliers

As more businesses, individuals and communities are becoming prosumers and generating their own electricity, the wider role of the supplier in the system is changing.

The government’s feed-in-tariffs financially reward customers for generating their own electricity, even if they don’t export it to the grid. But even small generators can sign deals with suppliers to sell electricity through schemes such as Good Energy’s SmartGen policy, which is open to generators with between 10 and 100 kilowatts (kW) of installed capacity. Similarly Opus Energy helps over 2,100 businesses sell more than 1,100 gigawatt-hours (GWh) of excess wind, solar, anaerobic digestion and hydro power.

For larger prosumer businesses, the relationship with suppliers and the grid is different. Rather than the traditional buying and selling of electricity, it requires a cooperative approach to understand how the prosumer can best utilise their assets.

Beyond increasing the amount of low-carbon electricity, decarbonising the electricity system also means making more efficient use of energy and managing the data that can help improve efficiency. Haven Power’s partnership with Thames Water sees it analyse an average of 68 million half-hour smart meter readings every year, using the data to help the company improve its billing and forecasting. As the wider system becomes more intelligent, suppliers will be able to better forecast how much electricity its customers use and help them reduce their consumption.

The role required of suppliers in a changing system will create opportunities for more renewable and efficient use of electricity. And empower more consumers to get their electricity from low-carbon sources that can help to make the whole country’s electricity greener.

Want a different perspective on the same story? Watch TV’s Jonny Ball explain.

The companies making coal history

Coal has been the backbone of electricity generation for well over a century – but times have changed. A growing understanding of fossil fuels’ contribution to pollution and global climate change means more energy companies around the world now realise their long-term success depends on moving away from coal. As a result, between 2015 and last year, construction of new coal-powered plants dropped by 73%.

The Powering Past Coal Alliance is an initiative helping facilitate this move. It brings together those working  moving completely away from coal, and is comprised of a number of governments, businesses and energy companies – including Drax. However, it isn’t the only initiative of its type – nor is Drax the only electricity generator fast moving away from coal.

Here we look at some of the other companies giving coal the cold shoulder. 

Avedøre is a high efficiency, multi-fuel combined heat and power plant in Denmark operated by Ørsted. Source: Ørsted


Denmark’s partly state-owned, global energy firm (once called DONG, an acronym for Danish Oil and Natural Gas) is one of the largest of the Alliance’s members leading the charge away from coal. The company is at the forefront of the energy sector’s transformation towards renewables.

It is the global leader in offshore wind, having installed more than one quarter of the world’s total offshore wind capacity.

More recently the company changed its name to Ørsted after the Danish scientist who first discovered that electric currents create magnetic fields.

The name change reflects the company’s move away from fossil fuels, including coal. The company has slashed its coal usage from 6.2 million tonnes in 2006 to 1.1 million last year, and aims to reach zero by 2023, as well as cutting its CO2 emissions by 96%.

This is thanks largely to the massive growth in Ørsted’s offshore wind farm business, as well as the conversion of six of Ørsted’s Danish coal-fired power stations to biomass. The company aims to have enough wind capacity by 2020 to supply 16 million people in Europe.

Denver, Colorado – Xcel Energy’s Cherokee Generating Station. Originally coal-fired, it is being converted to natural gas.

Xcel Energy

Coal is something of a controversial topic in the US these days. However, forward-thinking electricity generators in the country are quickly moving from contentious fossil fuels to renewables.

Mid-west-based Xcel Energy is laying out a timeline to switch the majority of its generation from coal to carbon-free sources. The company plans to retire 20 of its coal units between 2005 and 2026 – 40% of its total coal capacity – and expand its renewable portfolio in its place.

Xcel’s ambitions are perhaps clearest in Colorado, where it recently announced it will bring forward the closure of about a third of its coal fleet by a decade.

Alongside these coal closures, the company plans to construct 1,131 megawatts (MW) of new wind capacity, 707 MW of new solar power and 275 MW of battery storage in the state. Nationwide, Xcel says it is on course to hit a 50% reduction of its 2005 carbon emissions levels by 2022. 

Enel Generación Chile

Italian electricity giant Enel’s Chilean arm is one of the companies signed up to the Chilean government’s target of generating 70% of its electricity by renewable sources by 2050. In a positive move towards this, the firm recently closed a deal to build 242 MW of new solar, wind and geothermal generation, adding to its already growing roster of renewables.

Last year, Enel Green Power Chile and ENAP opened the Cerro Pabellón geothermal plant in the country’s Atacama Desert. Located 4,500 meters above sea level, it is the first facility of its kind in South America and uses Chile’s volcanic landscape to produce 340 GWh per year.

It comes as a part of Enel’s wider push to become carbon neutral by 2050. Chile’s energy ministry and the electricity power generators’ association have pledged to build no new coal power stations unless they are fitted with carbon capture technology.

Like Drax Group and the UK, companies and countries are quickly moving beyond unabated coal-fired power generation.

Europe’s kicking its coal habit

From Roman mines to the fuel behind the continent-wide industrial revolution, Europe has a long history with coal. But with reducing carbon and other greenhouse gas emissions, now firmly on the global agenda, Europe’s love for coal is rapidly declining.

Collectively, the EU aims for renewable sources to account for 20% of gross final energy consumption by 2020 and 27% by 2030. Countries in and outside the EU, as well as businesses and organisations, are setting ambitious targets to phase out coal as part of the UK and Canada-led Powering Past Coal Alliance, which Drax recently signed up to.

European CountriesCoal-free date
(according to Europe Beyond Coal *updated September 2020*)
Austria 🇦🇹 2020
France 🇫🇷 2022
Portugal 🇵🇹2023
UK 🇬🇧2024
Ireland 🇮🇪 Italy 🇮🇹 2025
Greece 🇬🇷2028
Finland 🇫🇮 Netherlands 🇳🇱 2029
Denmark 🇩🇰 Hungary 🇭🇺 Portugal 🇵🇹2030
Germany 🇩🇪2038
Czech Republic 🇨🇿 Spain 🇪🇸Phase out under discussion
Bosnia Herzegovina🇧🇦 Bulgaria 🇧🇬 Croatia 🇭🇷 Kosovo🇽🇰Montenegro 🇲🇪 Poland 🇵🇱 Romania🇷🇴Serbia🇷🇸 Slovakia 🇸🇰Slovenia 🇸🇮 Spain 🇪🇸 Turkey 🇹🇷No phase out date
Belgium 🇧🇪 Cyprus 🇨🇾 Estonia 🇪🇪 Iceland 🇮🇸 Latvia 🇱🇻 Lithuania 🇱🇹 Luxembourg 🇱🇺 Malta 🇲🇹 Norway 🇳🇴 Sweden 🇸🇪Switzerland 🇨🇭No coal in electricity mix

This movement is not only being fuelled by an increased capacity in wind and solar generation, but also by other low-carbon energy sources enabling countries to kick their coal habits.

Aiming for 100% renewable

As myth after myth is dispelled about renewables, there are countries proving it is possible to power a modern developed nation entirely through renewable energy sources.

Up in the northern-most reaches of Europe, Iceland already generates all its electricity from renewable sources. This is split between 75% hydropower and 25% geothermal power. Geothermal not only offers a renewable source of electricity but also hot water for heating the volcanic island nation.

A geothermal power station steams on a cold day in Iceland

Hydropower is also a key contributor to Norway’s renewable ambitions. With more than 31 gigawatts (GW) of installed hydropower capacity, Norway is able to rely on it as a source of electricity and export its plentiful oil and natural gas reserves to countries still dependent on fossil fuels.

Many parts of Europe are well suited to hydropower, with reliable rainfall and the mountainous topography necessary to construct dams and power stations. Parts of Austria, Romania and Georgia also make substantial use of hydropower as a source of electricity.

Artificial Lake behind the Bicaz Dam at sunset, Romania

For countries without this access to large-scale hydropower, it’s the increased installation of renewables that holds the key to eliminating the need for coal.

Growing renewable generation

Last year saw electricity generation from renewable sources overtake that from coal for the first time thanks to continuous expansion of wind, solar and biomass capacity around the continent.

Between 2010 and 2017, generation from wind, solar and biomass installations in EU countries more than doubled from 302 terawatt hours (TWh) to 670 TWh, according to Eurostat, driven primarily by an increase in wind capacity. As a source of renewable electricity wind has already proved capable of generating major portions of a country’s demand –managing to meet 44% of Denmark’s overall demand in 2017. This was after previously producing a 40% electricity surplus one day for the country, allowing it to export the emission-free electricity to neighbours.

Wind turbines on the east coast of Sweden

Across the EU, generation from wind more than doubled from 150 TWh to 364 TWh from 2010 to last year, while solar generation grew five times from 23 TWh to 119 TWh and biomass jumped from 129 TWh to 196 TWh. By contrast, coal and lignite fell from 818 TWh to 669 TWh.

These renewable electricity sources, along with hydropower, now account for 30% of EU countries’ collective electricity generation. And while coal generation continues to drop, other low carbon energy sources, particularly nuclear, still play essential roles in many European energy systems.

From coal to low carbon

Sweden is one of the leaders in renewable electricity generation, setting 2040 as the date to move to totally renewable energy. However, while it currently counts 6.5 GW of wind capacity installed and has already exceeded its 2020 renewable generation goals, the country’s 10 nuclear reactors still make up 40% of its electricity output. Sweden aims to phase-nuclear out of its energy mix, but this will force it to import more power from neighbours to meet demand.

France is even more dependent, with nuclear making up 75% of its electricity production and earning more than €3 billion a year for the country in exports. It aims to reduce its nuclear generation to 50% with president Emmanuel Macron claiming continued nuclear generation offers “the most carbon-free way to produce electricity with renewables.”

Fessenheim Nuclear and Hydroelectric Power Plants in Alsace, France

As a reliable and low-carbon source of electricity, the most modern nuclear power stations add a certain amount of flexibility to grids enabling greater adoption of intermittent renewable sources. Across the EU nuclear made up a quarter of electricity generation in 2017.

Gas in the transition

Much more flexible than nuclear, gas plays an essential role in many countries. It accounted for 19% of electricity generation in the EU last year and produces around half the CO2 and just one tenth of the air pollutants of coal. Gas turbines can begin generating electricity at full power in just 30 minutes from a cold start, or 10 minutes from warm standby, allowing it to plug any gaps in demand left by intermittent renewables. Its ability to provide many system services such as reserve power and frequency response will see it play an important transition role over the coming decades, until cleaner technologies are able to take over.

Artist’s impression of a Drax rapid-response gas power station (OCGT) with planning permission

Coal is not gone yet, making up 11% of EU’s electricity generation in 2017, but the momentum behind decarbonisation is keeping Europe on track to meet its ambitious emissions target and take the final step away from coal.

Gamlingay community turbine

Gamlingay Community Turbine is situated just outside the village of Gamlingay, Cambridgeshire. It is an enterprise privately funded by local residents and businesses. The village installed the turbine for three reasons: to reduce its carbon footprint; to raise money for the community by selling the turbine’s power; and to create a good investment opportunity for individuals and businesses in the area.

Opus Energy offers to purchase power at market-leading prices. The team behind the Community Turbine were seeking a high level of customer service, which is why they chose to sell their power to Opus Energy. Mr Brettle, a director of the project, comments:

“It really came down to how easy it was to talk to Opus Energy. We’re all people with day jobs so don’t have much spare time, and we’re certainly not experts in this area! Opus Energy helped us cut through the jargon and gave us confidence that nothing horrible will happen because we’d missed some technical detail. They made the entire process simple from start to finish.”

Gamlingay Community Turbine Ltd will give 10% of the net income, after all running costs, to a community fund. This will enable them to create a long-term income stream for the local area which will be used to support environmentally friendly projects for the benefit of the whole community.