The ECIU today launched our report, subtitled A Layman’s Guide to Affordable, Flexible, Clean Power, at a press conference in Westminster. This sets out how the UK can rely on a 50% share of intermittent wind and solar in its generation mix, using technology that is commercial today, and at no additional cost. The analysis is based on our proprietary Smart Energy Asset Modelling Tool (SEAM-T).
An expert panel consisting of Paul Massara, CEO of blockchain company Electron; James Heappey, MP; Catherine Mitchell, Professor of Energy Policy at Exeter University; and Hugo Chandler, NRP Director and co-founder, discussed the findings of the report. They agreed that there is no technology-based or economic reason why the UK should not rely on at least 50% wind and solar share of UK electricity, and concluded that the key task for government is to remove historical barriers to smart, flexible energy providers. These barriers are an unintended consequence of conventional power market design that persist despite some attempts by Ofgem and the government to modernise, and which are blocking private investment in new flexible power options.
The analysis used the SEAM Tool to model highly conservative assumptions with regards to technology costs and assumed deployment of technologies such as battery energy storage and demand shifting. Central to the report is an analysis of where supply could come from in the face of a worst-case “lull” in the wind resource. To this end, NRP modelled a three-week, unbroken, total absence of the wind resource. This extremely unlikely circumstance was used to illustrate that a combination of demand shifting, imports, energy storage and a portfolio of gas roughly a third of the size of today’s would be sufficient to maintain supply.
All Party Parliamentary Group for Rural Business chairman, James Heappey MP, said: “I think this is a very timely contribution because the new nuclear programme is, as far as I can tell, stalling. I don’t think that nearly as much as envisaged is going to be built, as is the case with the number of combined cycle gas (CCG) turbines.
“Our opponents keep giving more and more ground over what a renewables-heavy system can sustain, but they constantly draw a new set of trenches that we need to fend off. To do this, we need to be able to explain very clearly how intermittency can be mitigated through storage and demand response, and what a digitised energy system looks like and costs. This report does just that.”
Also speaking at the report launch, former Npower chief, Paul Massara said: “So often, we get the scaremongering headlines of ‘the lights are going out, renewables mean we need to get the candles out’. You can have security of energy supply, carbon reduction and price reduction simultaneously. Solar, batteries, flexibility and wind – when combined together – are going to become the cheapest source of energy production and distribution.”
The complete report can be found here
The European Commission discontinued tariffs on solar panels from China, abolishing the Minimum Import Price (MIP) on 3rd September. One leading market commentator expects module prices to fall by up to 30% in the coming weeks.
We think this may be an over-statement. Hugo Chandler, Director at NRP said: “The Minimum Import Price was intended to protect European manufacturers of solar modules. The Commission has been dropping the MIP steadily – from 46 cents per Watt last October to 35 cents in July – which has resulted in turn in a steady fall in the EU module spot price, as expected. It is likely that solar investment will rise on this trend.
But it will be interesting to see whether the removal of the MIP leads to a further substantial drop in module prices. This would really only happen if there were a very large gap between the price of Chinese modules and the MIP, which seems unlikely now. We think that a 30% fall in module prices in the next few weeks is rather optimistic.”
New Resource Partners was in Delhi this week to moderate a workshop focused on accelerating India’s uptake of renewables through early identification of integration and market barriers. MNRE Joint Secretary Varsha Joshi highlighted the opportunity wind represents to India and the major challenges still to be resolved. For further details, visit the IEA webpage. IEA webpage.
Battery costs today stand at $180/kWh, and are expected according to the recent Bloomberg New Energy Outlook to halve again by 2025. The rate of this price reduction is on a par with solar PV, which has led to an explosion of deployment globally.
“We expect cheaper batteries to present new revenue opportunities. In the UK, wind and solar provide 19.4% of the country’s electricity. As this share rises still higher, it will drive volatility in the wholesale energy market and open the way for price arbitrage with batteries.” Nick Gibbins from NRP comments.
Read more here
A new article from Bloomberg reports installed battery capacity in the UK in 2018 is expected to reach over 300MW, amounting to 500MW installed in total. Utility scale batteries play an ever-increasing role in this country where a fifth of power is from wind and solar. Meanwhile, Bloomberg predicts that the energy storage market will double six times by 2030, with the UK a market leader.
During his time at BNEF Abraham spearheaded Bloomberg’s work to size the clean energy investment world, as quoted in several of its quarterly publications. Abraham also wrote on the scale of development bank investment in clean energy and provided the data used in the UN’s report, Global Trends in Renewable Energy Investment. Abraham will be driving our data, analytics and energy modelling.
Hugo Chandler of New Resource Partners was happy to lend his expertise to the making of this manual, written for policymakers and staff in energy ministries and regulatory bodies. The manual has two main objectives: firstly to clarify the true challenges faced in the early days of VRE deployment, and secondly to signal how these can be mitigated and managed successfully.
Wind and solar PV capacity have grown very rapidly in many countries, thanks to supportive policy, and dramatic falls in technology cost. By the end of 2015, these technologies – collectively referred to as variable renewable energy (VRE) – had reached double-digit shares of annual electricity generation in ten countries. In Denmark, their share in electricity generation has risen to around 50%, and was around 20% in Ireland, Spain, and Germany, in all cases without compromising the reliability of electricity supply.
Despite this evidence, discussion of VRE integration is often still marred by misconceptions, myths, and in cases even misinformation. Commonly heard claims include that electricity storage is prerequisite to integrate VRE and that conventional generators are exposed to very high additional cost as VRE share grows. Such claims can distract decision-makers from the real, though ultimately manageable issues; if unchecked they can bring VRE deployment to a juddering halt.
The publication was prepared by the System Integration of Renewables (SIR) Unit of the International Energy Agency (IEA). Simon Mueller (Head of SIR) and Peerapat Vithayasrichareon (SIR) are the main authors of this report, alongside Hugo Chandler of New Resource Partners Ltd.
Emanuele Bianco (SIR) also made substantive contributions. This report was developed under the supervision of Paolo Frankl, Head of the Renewable Energy Division and Keisuke Sadamori, Director of Energy Markets Security.
You can access the full report here
It was announced that Gore Street Energy Storage Fund PLC, the UK’s first pure play energy storage fund, will launch an initial public offering on the Premium Segment of the Main Market of the London Stock Exchange.
The Company seeks to provide investors with a sustainable and attractive dividend over the long term by investing in a diversified portfolio of utility-scale energy storage projects primarily located in the UK, although the Company will also consider projects in North America and Western Europe.
Hugo Chandler of New Resource Partners comments, “This is the UK first for battery energy storage, and signals one route for investors to get exposure to the smart energy asset class. Just as was the case for renewables, we expect to see more and more of this sort of fund emerging.”
Read the full announcement here
October 21st: the Government of Mali has signed an agreement with R20 Regions of Climate Action and Akuo Energy to develop bankable renewable energy projects in various regions of the country. The duo has designed a project for a 50 MW solar PV plant in Kita, and conducted technical studies assessing the feasibility of installing such a plant. For more information visit the R20 website.
Predictions of blackouts and supply “crunches” will be plastered all over the media this autumn, as every year. We do not believe the lights will go out, but much greater focus is needed on modernizing the power system, signalling the value of flexibility alongside energy revenues, and stimulating consumers to respond to changing supply conditions. Click here for more.
Hugo Chandler, Director of New Resource Partners, Paul Massara, Former Head of RWE npower and Joan McNaughton, World Energy Trilemma Executive Chair at World Energy Council, comment in advance of reports to be published by National Grid this week.
Commenting ahead of reports this week from National Grid, on UK electricity margins for this winter and on future energy scenarios, Hugo Chandler, Director at New Resource Partners, said that National Grid has the tools to address concerns over generation-related blackouts.
“There’s been a lot of crying wolf over blackouts given that the UK has only seen one in the past 10 years that was due to issues with generation. Just for comparison, transmission and distribution faults cause around a quarter of a million power cuts across Britain every year. And although people get quite excited over grid management measures such as NISMs, the reality is that they’re needed much less frequently than in the past,” he said.
“National Grid has the tools to tackle the tight margins this winter, but that doesn’t mean we should hold off investing in cheaper, smarter and cleaner ways of balancing the grid right now. The immediate opportunity lies in demand-side response, which the Government and big consumers want but which isn’t yet properly incentivized. Ultimately demand response means fewer new peaking plants, avoiding the price tag that comes with that and less of a burden on bills for consumers and businesses.”
Have a read of the full article via this link.
National Grid said yesterday it was confident that there would be enough generation to meet demand, despite a flurry of recent closures of the coal-fired power stations that, until recently, were the biggest contributors of Britain’s electricity.
View the full article featured in ‘Financial Times’ here or by ‘The Times’ here.
Alongside James Heappey, MP for Wells and member of the Energy and Climate Change Select Committee and Professor Jim Watson, Director of the UK Energy Research Centre (UKERC) Hugo Chandler of NRP discussed the implications of Brexit for energy policy in the UK.
Hugo Chandler, Director at New Resource Partners who formerly led work on grid integration of renewables at the International Energy Agency, said that the UK, along with other nations, was committed to developing a flexible, smart power grid.
“Before the referendum, the UK had made some good first moves towards the kind of flexible grid that can manage the 12GW of offshore wind in the pipeline. Whether in the EU or out, this direction of travel remains sound. Transition to a flexible grid is the logical thing to do, and with present technology it’s the only route to addressing the energy trilemma of clean, affordable, secure energy supply,” he said.
“Britain isn’t alone in this transition: most other major developed economies are pursuing smart power infrastructure such as interconnection, demand response, storage and flexible power plants. And it remains in our neighbours’ interests to collaborate in gas and power.
“Major players from the big utilities to Energy UK and the National Infrastructure Commission are all pointing in the same direction. The right thing to do for the new business department is to continue on its course, and indeed to entrench it firmly in our overall industrial strategy.”
NRP and Lazarus have prepared a research note on investment opportunities arising from disruptions in electricity markets caused by new wind and solar power plants. The note highlights that media doomsaying on security of supply misses the point that these disruptions are opening the way for new infrastructure assets, including new transmission, demand response, storage, and fast flexible CCGTs.
New Resource Partners has joined the Grid Integration of Variable Renewables (GIVAR) Programme of the International Energy Agency, to provide input on increasing power market flexibility to manage high shares of variable renewable such as wind and solar PV. For more about the programme, please visit the GIVAR programme page at the IEA.
Against a back-drop of reduced system margin this winter, Hugo Chandler presented to a wide cross-section of the UK electricity industry, public sector and large consumers on the increasing need for flexible power assets to manage the more than 30GW of wind and solar expected in Great Britain by 2020. For slides and further details, visit the Ofgem’s website
Hugo Chandler of New Resource Partners will join the panel at Ofgem’s Winter Outlook Technical Seminar in London on Thursday the 15th of October 2015.
The seminar aims to delve into topics such as ‘Flexibility in the GB power market’ and ‘The global outlook for LNG, the potential impacts on the GB market and the role it can play to enhance security of supply in GB’ with plenty of time for Q & A’s. We encourage you to come along to this insightful session.
You can view the full agenda here – we look forward to seeing you at the event!
New Resource Partner’s Nick Gibbins & Hugo Chandler join as industry experts at the How2Guide for Wind Energy Expert workshop in support of implementing a wind energy technology roadmap for India workshop run by The Government of India (Ministry of New & Renewable Energy), Shakti & IEA on 16th September 2015 in New Delhi.
– Global wind energy outlook and deployment perspectives in India
– Accelerating wind energy development in India
– Implementing a wind roadmap for India: from vision to action options
– Reporting back from groups and take-away messages
To have a look at the full agenda, click here.