National Grid: Control Through Amusing Charts

Those wacky funsters in the DECC amusing graphs department have come up with another good one. Not quite in the league of the graph I posted on a while ago on Green Deal and DECC, but pretty good, nevertheless. This one, from the newly published Technical Update on Electricity Market Reform purports to explain how the new system for FiT ‘Contracts for Difference’ and the capacity mechanism will work in the new reformed Electricity Market Reform programme.

Here it is, from p. 15 of the document:

And here it is, rendered into English.

It is clear from the document (and the chart, once you translate it) that the intention is effectively to give the running of all the machinery of Contracts for Difference and capacity payments over to National Grid Plc, including design of the system, operation, giving out of contracts, auctions of capacity payments, and the payments and collection of contributions themselves.  Might there be some conflict of interest?  Well, DECC has thought about that. “Giving the system operator influence over the type and location of generation and the capacity margin raises potential or perceived conflicts of interest with National Grid’s existing functions and businesses,”  they say (quite rightly, in my opinion) and then they list just what those businesses are.  “…including,” they say in a footnote “National Grid’s role as transmission owner for England and Wales (including responsibility for network build), National Grid’s existing and potential role as Offshore Transmission owner, National Grid Carbon Ltd’s potential role as Carbon Capture and Storage Infrastructure owner.”

But not to worry. They’re going to “carefully consider any potential conflicts of interest and possible mitigating measures.”  They’re starting a project to do just that, with the full project expected to take “around a year.”  So that’s, let’s say, next Christmas: by which time, as the document proudly states, legislation will have been through the House to put everything into law.  Hmm. Not sure this really works, DECC, and you may well regret giving huge chunks of the electricity market management system over to one of the players within it.  Better have a good think about it earlier, rather than later, in my view.

Electric Lalaland?

I spoke at a PRASEG  (Parliamentary Renewable and Sustainable Energy Group) seminar yesterday on renewable and future networks. My small contribution was to talk about interconnectors, electricity storage and super grids, all of which keen readers (yes there are some, I understand) of this blog will know I have been going on about for a while, so I won’t bore you with any detail of what I said.

However, I will bend your ears about another contribution to the meeting, from Richard Smith, who is the future Transmissions Manager at National Grid: or rather one particular point he made. Clearly, he said, if we are to develop electricity delivery in line with what is projected in the ‘roadmaps’ to 2050, then we will have to build in a great deal more capacity and substantial grid development and strengthening. So far so uncontroversial, except that, of course the pathway to which he refers is the ‘high capacity’ route set out in the DECC ‘Pathways to 2050’ document of last year (here). The central case in that document, repeated in the National Energy Planning Statement is that as it said “demand for electricity could double over the next forty years as a result of the need to electrify large parts of the industrial and domestic heat and transport sectors.”  That is based on the assumption that we will be largely driving around in electric vehicles, and, importantly, heating our homes and offices electrically.  Sort of makes sense doesn’t it?  After all, gas comes out at well above the level of emissions we will have to have in our electricity and heating economy by 2030 so it will have to go.

What Richard Smith sets out (and I think this is the first time I have seen it put quite like this) is what that switch from gas to electricity will actually mean.  He takes as his starting point electricity demand per day (an average November day, to be precise) of 1000 Gwh and then sets that against the average gas demand for the same day at 4000gwh. “What would you have to do to electrify all that heat?” he asks. The results are rather startling: you would need 45 nuclear sites at two reactors per site: or perhaps 30000 wind turbines at 5mw per turbine, or maybe 75 CCS equipped power stations. Or you might go for Solar PV –  40 million homes with PV on the roof: or then again if you interconnected; well that would be a modest 150 new interconnectors the size of the new Brit Ned line. It’s just not going to happen is it?

There is, of course, a distinction to be made between gas in power stations and gas for heating homes, offices and factories. Whilst we can and should reasonably decarbonise (i.e. degas) our power supplies, or at least ensure that the remaining gas is Carbon Capture equipped, to do the same for all our heat doesn’t really add up, at least on Richard Smith’s scenarios.  And yet…as I have mused on previously, we’re seemingly locked into a scenario of ever increasing requirements for additional electricity generation capacity over the next thirty year because of these and other assumptions about what demand is going to look like, and in what form.

I think we’re going to have to look at all that again. I had a little look a while ago about our assumptions to 2020, (here) and how with reasonable progress on interconnectors and storage, we could come in at a much lower level of capacity requirement. We are going to have to think out the future after that a bit better as well, and probably, I would think resist the temptation to throw away our extensive gas delivery networks to pursue a probably unattainable goal of wholesale electrification.

Yes, you say, but what about the carbon backpack in all this?  I’m not sure that this is necessarily the complete riposte it looks like. A combination of better managed energy efficiency, installation of district and home heating CHP fuel cell boilers (of which a little more later) and a fairly comprehensive programme of putting biogas into the mains supply would substantially decarbonise heating whilst avoiding much of the need to replace gas distribution capacity in the way currently envisaged:  and by the way, we’d need far fewer new power stations to fuel our ‘electric’ future. I guess Richard Smith should be able to work all the numbers out on this, as well…

Will there be a fjord focus*?

I think it is a bit like having a new car – the day after you bring it home, it seems like everyone else is driving around in the same model. They’ve always been there, of course, it is just that now you notice them.

I posted a little while ago about electricity storage, and how it could play a substantial role in balancing future electricity markets, particularly when those markets have a high penetration of wind. I also identified more recently that pumped storage might not be as expensive on a localised cost basis than some believe.

Well, now we seem to be surrounded by nods and murmurs on storage – National Grid mentioned the importance of considering it in future energy markets when I visited their market balancing committee in Wokingham this week. I also spoke to Mainstream Renewable Power a day later, who continue to push the merits of the European Supergrid, though the energies (pun intended) of their indefatigable CFO Eddie O’Connor.  A substantial element of the grid in Mainstream’s view, could be either a direct or a mediated DC connection to Norway – which of course has enormous resources for the development of pumped hydro – raising the vision that inconveniently generated electricity in the UK could be exported for storage along such an interconnector, and returned to the grid when needed almost as quickly as the Dinorwig storage plant presently allows.

And then we had the occasion of the very excitingly entitled “European Committee A” last Wednesday. The Committee on this occasion was discussing the EU Commission’s programme for Energy 2030 – I took the opportunity of asking the minister questions on the European interconnection memorandum signed by 10 EU states (including the UK) last December to develop a schedule for the establishment of an offshore transmissions grid in the North Sea and elsewhere. One of these signatories is Norway (I know pedants, Norway is not an EU member state but it is effectively bound voluntarily by most EU regulations and agreements).

The minister agreed with me that either a bilateral connector to Norway or connection through a grid could open up an enormous storage potential for the UK and seems intent on pursuing this with the Norwegian government. That would, by the way, have considerable implications for stand-by capacity proposals presently accompanying electricity market reform proposals. If a connector was part of a grid, it would also have implications for the present near-crazy system of “separate point to point” cabling to land the product of new offshore wind farms. But that, I guess, is a topic for another day…

*I can only apologise to my staff for the use of this terrible pun