THE BLOG
17/10/2017 09:49 BST | Updated 17/10/2017 09:49 BST

Sun Setting On 'Renewables And Reliability Argument'

As a result of rapidly falling costs of solar and wind power, and in response to meeting emissions reductions targets, there has been significant increase in investment into renewable energy and phasing out of coal based power stations in the UK.

In April this year, the UK went its first full day without the use of energy from coal since the Industrial Revolution. As the first country to use coal for electricity, this is a watershed moment for the low carbon revolution. In fact, the UK energy supply was only 2% from coal in the first half of 2017, down from some 40% of total supply just 5 years ago.

As a result of rapidly falling costs of solar and wind power, and in response to meeting emissions reductions targets, there has been significant increase in investment into renewable energy and phasing out of coal based power stations in the UK. The effect of this structural change is also in evidence when National Grid reported that at lunchtime on the 7th June 2017, for the first time in excess of 50% of the UK's electricity needs were met by power from wind, solar, hydro and wood pellets. With the addition of nuclear, at 2pm this reached 72.1% from carbon neutral generation.

The price of renewables continues to fall due to improved technology and uptake - solar and wind is now either the same price or cheaper than new fossil fuel capacity in more than 30 countries, according to a report from the World Economic Forum released earlier this year. However, the rapid adoption of these new technologies is causing concerns in some quarters.

One major argument used against renewables is that they do not produce a consistent base-load type of power like fossil fuels due to being intermittent - not generating power when the wind is not blowing or sun not shining. However, this is being answered by rapid improvements in battery storage systems and an increasingly flexible grid. Battery system costs are dropping fast, which means that power generated from the sun and wind can be stored for future use, which dramatically reduces the need for base-load generation.

The Storage Holy Grail

Improved battery technology and lower costs has been mainly driven by the rapidly growing electric vehicle (EV) market. The costs of Lithium Ion battery packs have dropped by 90% in 10 years, which is now creating a timely opportunity to increase the use of renewable energy, and strengthen the current power grid. This is also enabling both industrial users and consumers to gain better control over their energy usage and power bills.

The benefits of battery-based storage systems are multiple. Battery storage systems can provide greater grid stability, and also enable power generators of many types to maximise revenue and minimise costs. Behind the meter, on the demand side, users can better control bills and optimise local renewable power consumption. In addition, battery storage systems allow for more resilient power for the rare cases where the grid fails such as when there are natural disasters such as the flooding seen in recent years in the UK and other places.

On a larger scale, battery systems are generating revenue by providing ancillary services to the grid transmission systems. Such markets are expected to grow for smaller systems in aggregate in coming years. Another exciting development that storage enables is microgrids. Here, local, distributed power generation and storage can allow portions of the grid and critical facilities to operate independently of the larger national grid when necessary, helping reduce the overall potential for unforeseen blackouts. These microgrids - whether large or small - ensure resiliency and stability of supply and a reduction of CO2 emissions.

The car and home as energy providers

In its first major move to support the nascent battery revolution, the UK government announced in June 2017 that it is poised to invest £246m in battery technology, and that it will be a key pillar in its industrial strategy.

These recent announcements in support of battery technologies are welcome. What is now expected and needed is more transparency and the removal of barriers to allow small systems to participate in the ancillary services markets. Doing so would also foster the growth of the local ecosystems that will help to achieve the transformation of the energy markets and modernise the grid. For example, people with EV cars will eventually also let them provide power back to the grid and thus offset the cost of the cars.

Overall, the long-lasting argument that renewables are unreliable is short lived. With so many advancements within the renewable energy sector coming to head, the 'sun not shining at night' and "wind does not always blow" concerns are rapidly becoming obsolete. As costs continue to drop, and battery system and ancillary services continue to expand, there is a huge opportunity for complete structural changes within the energy sector. And with supportive regulation changes and increased transparency for markets, the future is certainly bright for UK's energy supply moving forward.