MAXIMISING RETURNS FROM RENEWABLE GENERATION ASSETS

Philip Dingle, Director of Future Networks, Lucy Electric

The UK energy transition is moving at pace – with exponential growth in renewables investment in the last decade setting ourselves on the path to net zero.1 The government’s recent Powering Up Britain report shows a reduction in carbon emissions by 48% in the last 30 years, putting the country ahead of major global competitors.2 However, the rapid growth of the industry has brought new problems – with generation often exceeding grid capacity, the national grid is often obliged to pay operators a ‘constraint payment’ to reduce output in order balance supply and demand – these payments to wind powered generation alone totalled £144m in 2021/22, the cost of which is ultimately reflected in consumer energy bills.3 We must therefore ask: How do we maximise the efficiency of renewable assets to realise their potential as low-cost sources of clean energy?

Grid Connection Delays Risk Undermining Profitability Of Future Projects

We have entrusted the energy transition to the power of the free markets, anticipating that the end of fossil fuel consumption will be ensured by improved cost-efficiency of renewable alternatives. Renewables generation in the UK was at a record high in 2022, accounting for 41% of total generation and outperforming fossil fuels.4 And yet, the country is in danger of falling well short of its net zero targets. This is due, in part, to the missed opportunity created by the backlogs and bottlenecks in connecting renewable sites to the grid, undermining the profitability of future projects. Nearly 50GW of renewable projects have been connected to the grid since 1992, but there were 164GW worth of new requests last year alone, demonstrating the levels of scaling up required for the grid to be able to accommodate new projects. The size of the queue to connect is growing to a scale where it threatens to disincentivise any new investment in renewables in the UK, with some

1 Powering Up Britain: The Net Zero Growth Plan, UK Government, March 2023, p.9

2 Ibid., p.6

3 Monthly Balancing Services Summary 2022/23, National Grid ESO, October 2022

4 Energy Trends UK, October to December 2022 and 2022, Office of National Statistics, 30 March 2023 developers warning of waits of up to 13 years.5

While there is evidently widespread awareness of the necessity to address this issue through reforming the connection queue and modernising the transmission network,6 the growing queue and scale of adaptation required makes this seem like a Sisyphean task. This is especially evident when you consider electricity demand is forecast to rise 60% by 2035 as the uptake of technologies such as electric vehicles and heat pumps rise.7

Part of the problem is a failure to enact a devolved approach, with an emphasis on scaled-down, localised network management to accommodate the complexities and variations of the UK energy landscape. Factors such as geography, weather, accessibility, and population density greatly affect variation in demand up and down the country. This means a one-size-fits-all approach to connections is not only unsuitable for more flexible grid solutions needed to accommodate variable renewable generation but is actually hindering progress. Nick Winser, in the new role as Electricity Networks Commissioner, is tasked with attempting to reduce these connectivity timelines by three years and to develop recommendations to help halve the end-to-end project process by the mid-2020s. His first report is due to be published in due and is eagerly anticipated.

LOW VOLTAGE MONITORING: A SMARTER ROUTE TO NET ZERO

A key factor that will play an increasingly important role will be low voltage monitoring. A truly smarter grid will gather data on the time, location and scale of demand. This

5 Renewables groups sound alarm over UK grid connection delays, Financial Times, 6 February 2023

6 Improving and Accelerating Customer Connections: Our immediate action plan, Energy Networks Association, 20 April 2023

7 Powering Up Britain: The Net Zero Growth Plan, UK Government, March 2023, p.27 unlocks flexibility that can maximise the use of local renewable generation to meet local demand. For example, EV charging mostly takes place on the LV network, which is currently the least visible part of the grid. With demand rising, real-time monitoring to observe clustering of demand and check power quality will be an essential component of a distributed and renewablesdriven network, where the potential for losses and unmet demand is higher.

Lucy Electric’s Gridkey data provides clear visibility of load and demand fluctuations and can factor in network safety and load constraints. When combined with smart charging technology, this can create a control signal that can alert or even shut off charging to protect infrastructure or supplies.

Furthermore, Lucy Electric has worked with Oxford County Council to install public charging networks, which will increase in demand because many people do not have access to off-street parking. Using data-capture and monitoring technology in these projects helps maximise efficiency, enabling fast-charging infrastructure to operate within the distributed, more localised grid network of the future.

Addressing The Net Zero Skills Gap

To prevent renewable projects sitting idle, the government must address the skills gap in installing capacity. The surge in connection requests from new renewables projects should not be a surprise, and thus investing in the training and development of workers in this sector should be a priority for the government, especially at a local level in order to install and maintain a more dispersed collection of energy assets. Matching the rise in demand with a boost in skilled labour can help maximise the potential of the UK’s energy network, and there is no time to lose. https://www.lucyelectric.com/