A wake-up call for grid modernisation

The rapid growth of renewables is key to unlocking a secure and affordable energy transition, but while we have seen investment in renewables nearly double since 2014, for grid modernisation it has barely changed, writes Matthew Boulton, Director of Solar, Storage and Private Wire at EDF Renewables UK.

As the International Energy Agency’s (IEA) recent Electricity Grids and Secure Energy Transitions report shows, globally, grid modernisation is not keeping pace, risking them being the weak link of the clean energy transition.

The IEA’s first-of-a-kind global stocktake is a wake-up call that the progress made to date in renewables deployment could be put in jeopardy without decisive, immediate action to modernise our grids and ensure energy security.

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Greater policy reform needed to transform the UK grid

As we decarbonise energy, one of the biggest challenges will be getting the right amount of power to the right places at the right time.

A key problem highlighted by the IEA is that power from new solar and wind farms is becoming available at a faster pace than can be channelled by utilities onto current grid networks – which often require significant upgrades and new equipment.

As the report identifies, new grid infrastructure often takes five to fifteen years to plan, permit and complete, compared with one to five years for new renewables projects and less than two years for new EV charging infrastructure.

We’ve experienced this ourselves in the UK with developers seeing connections dates in the mid-2030s.

To facilitate quicker, large-scale renewables deployment that will deliver the transition to net zero, we need to move away from a ‘connect and build’ mentality to a ‘build and manage’ approach.

The government has set out policies to try and address this and have actioned a number of recommendations from the UK’s Electricity Networks Commissioner, Nick Winser.

Prime Minister Rishi Sunak set out his approach in three areas just a few weeks ago. Firstly, reform the way the grid is designed, identifying where supply and demand is likely to be in the future. Next, streamline planning consent for new infrastructure, such as new pylons, needed to connect renewables to the grid. And thirdly, cut the long waiting list for generators to connect to the network. 

These pledges address some of the key areas that the IEA identifies as being key to boost grid capacity development.

As the report sums up, the strongest barriers relate to public acceptance of new projects and the need for regulatory reform. Here, policymakers can speed up progress on grids by enhancing planning, ensuring regulatory risk assessments allow for anticipatory investments and streamlining administrative processes.

However, we need to see the recommendations actioned quickly.

Certainty is key to unlocking investor confidence

Currently, in the UK, energy generators and suppliers are subject to ‘Transmission Use of System’ (TNUoS) charges, which are used to recover the cost of the installation and maintenance of the transmission network. It is currently calculated through a variety of factors, mainly location.

These charges are important as they indicate to developers the sites that may economically be suitable for low-carbon infrastructure. But they need to be proportionate as there are clear limits to the value that these locational signals can provide, with other factors having an impact such as wind resource and availability of grid connections.

Currently, transmission charges fail to provide this useful investment signal as they are not sufficiently predictable.

The recent UK Electricity System Operator (ESO) 10-year projection has reinforced this concern with an unexpected doubling of TNUoS charges in some locations and significant falls in other areas, compared to the five-year forecast. This degree of uncertainty seriously undermines investor confidence and risks an investment hiatus, plus uneconomic development of the country’s grid infrastructure.

Urgent action is needed to address this uncertainty. A serious review of TNUoS and its underlying methodology is required by the government to make sure it is fit for purpose to ensure investment in net zero from the private sector continues, and Ofgem must consider how it provides some level of longer-term assurance.

Battery storage can mitigate the cost of grid infrastructure

One of the measures available to system operators when trying to manage system-wide supply-demand imbalance and preserve system stability is to curtail renewables when there is too much energy on the grid.

The IEA report finds that curtailment has reached significant levels in some countries in recent years, with a sample of ten markets having an average renewable curtailment of 3% – adding up to the equivalent of the annual electricity demand of New Zealand.

Battery storage certainly has a role to play, giving system operators greater flexibility and more choice rather than just hitting the off switch on both the cheapest and cleanest form of generation – renewables.

As more of our lives are powered by electricity – from heating to cars – our energy system is changing, and batteries are an important part of the solution, providing rapid response capabilities as the grid quickly injects or absorbs power.

The UK government has set a target of installing 30GW of electricity storage capacity by 2030 and National Grid’s Future Energy Scenarios 2023 forecast a minimum of 30GW of storage by 2050 in the net zero scenarios, comprised of different storage technologies.

That is not to say storage is the only solution needed. It complements but does not replace grid development. Summed up perfectly by the IEA report, new technologies and practices, such as increased battery storage and the development of microgrids can act as alternatives to traditional infrastructure buildout in some cases, but we need new poles and wires too.

Grids as the backbone of secure energy transitions

Climate change is a global challenge that we all face and the transition to clean energy systems will not happen overnight.

EDF Renewables UK has a large pipeline of wind, solar and battery projects, and we have been calling for faster grid development to avoid lengthy and expensive delays, and a much more collaborative approach between system operators, government, generators and the general public.

There are some promising signs here in the UK and in countries around the world, so it is up to us to translate these signs into action and deliver a smarter, cleaner grid powered by renewables.