The country needs an effective energy policy in order to ensure a swift and effective transition to net-zero whilst maintaining a secure and affordable energy sources.
The need for a clear, well-structured policy
Without a clear energy policy, the country risks having an energy system that is driven by choices made by developers who will look at the commercial opportunities for investment and select the most financially rewarding, without consideration of what is best for the UK. It is the UK government’s position to set out a clear policy with guidelines and regulations to govern private investment to ensure the country gets the best outcome and our policy aims are met. We must also be aware of the marketing campaigns run by private businesses which portray any investment in what they present as ‘green’ or ‘renewable’ simply to greenwash their natural profit-driven investment strategy.
Outline of a National Energy Policy
- Invest in wind farms ONLY in areas of high wind power density where they will generate the highest and most constant output to minimise dependence upon gas and reduce the real economic and net carbon cost of wind energy (1).
- Focus wind farms where they can connect to the National Grid Offshore transmission network to reduce the cost grid connection and avoid the environmental harm of unnecessary individual onshore grid connections. (2)
- Invest in domestic offshore gas to replace all the dependence upon UK coal and foreign gas which will be necessary if we use wind: there are many periods when the wind does not blow. If managed carefully this will eventually reduce costs for consumers. (3)
- Invest in small modular nuclear reactors (SMR) (based upon proven submarine technology) which can be deployed rapidly and reduce the consenting time to ensure we continue to grow our nuclear baseload to minimise our dependence on gas in the future. Using UK developed technology will also allow the UK to avoid dependence upon China and Chinese technology and create a significant opportunity for new export sales of SMRs. (4)
- Invest in and encourage the development of very long-term storage technology to bring down the storage cost to enable wind power to become no longer dependent upon gas backup. (5)
- Encourage the development of short-term storage and demand management (e.g. smart meters) to balance inter-day demand to with supply. (6)
- Continue to encourage the integration of a wide range of other renewable energy sources (e.g. solar, tidal, fusion, geothermal etc.) into the grid with their own storage solutions which will ultimately reduce the dependence upon gas as a flexible supply to balance demand. (7)
- Continue to invest in grid connection with continental energy systems to increase reliable supply and diversity sharing. (8)
Notes on the key strands of the policy:
(1) Not all wind farms are the same. Inherently all wind farms are an intermittent source of energy, however some are more intermittent than others. When the wind blows at a reasonably high speed then they will generate their full output. At lower wind speeds the output will be low. When the output is low there is no wind-generated electricity to feed into the National Grid. The country cannot continue to run without power! To satisfy demand, the National Grid has to turn on gas generators to provide the backup supply. As will be discussed in note 3 below, the country is likely to continue to need this gas backup for around 20 years until there is an alternative. This has three consequences: the use of wind power means higher costs, potential dependence upon foreign gas, and significant levels of carbon emissions from the use of gas power. With wind farm energy generation being between 25% and 69% efficient (% of time generating full power), the dependence on carbon-emitting backup will be between 75% and 31%. A 25% efficient wind farm will require three times as much (carbon-emitting) gas generation as the wind farm produces on its own. The highly efficient wind farm at 69% will required less then half of its power in gas generation. In times when gas prices are high, all this results in very high energy bills for customers for inefficient wind farms. In order to keep the cost of electricity to customers as low as possible, to reduce our dependence upon foreign gas and to reduce carbon emissions, it is very important to ensure the wind farms are as efficient as possible and thus need as little backup as possible. Locating wind farms in areas of high wind power density make them efficient. The next paragraphs set out one example, demonstrating this point with the latest data from the National Grid.
(2) According to the National Grid (NGESO): “[the]most beneficial approach to offshore connections will be vital to offshore wind reaching its potential to facilitate net zero in a way that minimises the impact on consumers and coastal communities”.
By following the first strand of this proposed policy, wind farms will be significantly further offshore where the wind strength is much greater. The second strand of this proposed policy would minimise the number of onshore cable links – and thus also reduce the impact on coastal communities. At the same time, this advances sustainable infrastructure development (i.e., balancing environment, social and economic considerations to meet current and future needs) by avoiding unnecessary socio-economic harms to coastal communities – who alone would bear the principal harms. It respects the government’s own visual buffer safeguards for offshore wind farms that aim to afford that protection and it improves public acceptance.
(3) As set out in (1) above, the output from wind farms is intermittent. There are many days when the wind does not blow and no power is generated. In the winter, the output is generally higher than in the summer when it is less windy. Whilst the demand is, in general, higher in the winter it is fairly constant from week to week (see Figure 3 in the appendix). Whilst the UK continues to use wind farms to provide power to the Grid, the UK will need an alternative source of flexible supply which can be turned on very rapidly to balance the network. This balancing supply is an essential feature of a network with an intermittent source like wind farms. The backup balancing supply must be capable of reacting quickly to the changing output from wind farms. Currently our gas, oil and coal fired power stations can provide this. Gas power is the cleanest of the options and by introducing a carbon takeback obligation on extractors the impact on climate change can be minimised. The country must invest in the exploration and use of all our natural gas supplies to minimise dependence upon foreign gas. This will also avoid the need to use the high carbon emitting coal power stations we also use for backup. Gas generation will continue to be the only balancing source of power until the technology for mass storage has been developed and the UK has invested in this capability. It is likely to be around 20 years before mass storage is available on the scale required.
Storage of energy can be an alternative to this gas generation backup. However, the amount of storage required for even the 2030 target of 50GW from offshore wind would be immense. If electrical storage were used, giving a 100% return on stored energy, then analysis of the combined output of the current offshore wind farms (which amount to 10GW of nameplate capacity) over a one-year period to 31 October 2021, a constant output of 3.667GW could have been produced with a storage facility storing 5.65TWh of electrical power. With 50GW of installed off-shore wind capacity by 2030, the storage required would be 28.3TWh. Tidal power has a real advantage over wind power since the output is relatively constant from day to day, with a reliable tidal cycle every 6 hours. The equivalent storage capacity required for tidal power is very much lower for the same level of power generation, making battery storage feasible for this type of renewable and thus eliminating the need for gas backup.
Battery storage: current costs
The largest battery storage facility in the world has just become operational in Australia. It is the 300MW Tesla battery facility which could store 450MWh at an estimated capital cost of £150M. In order to provide battery storage back up for the 50GW of projected offshore wind farms by 2030, 28,250GWh of storage would be required. Based on the costs of the Australian storage facility, this would cost about £9,375B. It is clear that this is unaffordable. Other technologies may be developed in the future – such as hydrogen storage in underground caverns – but there are no current plans to develop such facilities and the UK will continue to need to depend on gas backup for all UK Wind Farms for the next 20 years, making investment in new domestic gas sources viable.
Relative costs of renewable energy and the cost of backup (which should be included to make a fair comparison) of carbon free sources.
Offshore Wind (without the cost of storage) is projected to cost £57/MWh in 2025 (calculated at 2018 prices with a 50% capacity factor). If it is assumed that the capital (CAPEX) is 50% of the LOCE then the projected cost for offshore wind with electrical battery backup would rise to about £2900/MWh. This cost would be higher for wind farms located in low wind areas. Nuclear power is likely to cost between $66 to $100/MWh and there is no cost for storage as the output is constant. In December 2020, the UK Marine Energy Council reported likely costs for Tidal (excluding storage) of £90/MWh by about 2025. The storage required for tidal is significantly less than for wind as tides generate on a 6-hour cycle. The £90/MWh would rise to £105/MWh to include the cost of storage.
(4) Nuclear energy generation does not produce any carbon emissions during operation and can provide a constant output to ensure we have the power required to meet demand every hour and every day. There is no need for storage. Having this technology in our energy mix gives the UK increased energy security and reliability. The cost of electricity generated by nuclear power is likely to be lower than most renewable sources when the cost of storage is taken into account. (see table below)
Rolls Royce has been involved for decades in the design, product development, manufacturing, and long-term support of the UK nuclear reactors used in UK submarines. This technology has proved itself to be safe and very dependable. Rolls Royce sees an opportunity to use this technology to build Small Modular Reactors (SMR) to rapidly increase the use of this type of nuclear energy generation, replacing the current nuclear reactors, and would have them up and running quickly.
Rolls Royce believes its SMR will:
• Provide 220MW to 440MW of power, depending on the configuration; that is the equivalent of up to 150 onshore wind turbines.
• Supply power to the grid in a timely manner at lower cost to the taxpayer and consumer, generating electricity that is at least as cheap (per MW) as power generated by today’s large-scale reactors – potentially even cheaper when SMRs go into volume production.
• Represent the lowest risk by using proven technology and best value, using a high degree of commercial or standardised off-the-shelf components.
• Sit within a power station that would be roughly five and half times the size of the pitch at Wembley, which is just one-tenth the size of a typical large-scale reactor site (40,000m2 vs 400,000m2).
• Take just 5 years from the start of construction to the generation of the first electricity.
• Be up and running by 2028, maximising the UK’s first-mover advantage in the race for exports.
• Minimise operating costs such as refuelling and the burden of decommissioning.
• Last for 60 years.
(5) It is clear from points (1) and (3) above that there is no storage technology available today to allow power from wind farms to become a zero-carbon source of power to meet the UK demand at affordable costs. The most promising technology might be hydrogen storage in underground caverns. These could potentially provide the capacity but the process of creating hydrogen from electricity (by hydrolysis: using electricity to split water into hydrogen and oxygen) and then generating electricity from the stored hydrogen is only about 40% efficient. This low efficiency when compared with battery storage would result in the overall constant power from UK wind farms being effectively reduced. [As noted in (3) above, current 10GW of capacity would produce 3.66GW of constant power with 100% efficient battery storage but only 2.69GW with 40% efficient hydrogen storage]. With increasing dependence on wind power, new technologies for large-scale storage will be required to enable the UK to become net-zero. For a full report on storage options, see the report in 2020 by Mott MacDonald
(6) The use of smart metering and local storage can be used to help manage the peaks of demand and to move it to times where more supply is available.
(7) Increasing the range of renewable technologies will help diversify the dependence on one technology. In order to be a technology that will properly contribute to a carbon free future, the renewable source should ideally be integrated with its own storage so that its output could be constant to meet demand. When judging which technology to invest in, the overall cost of renewable energy source (including the cost of storage) should be used. Tidal power is very attractive because the storage required is very low when compared with wind power. Unfortunately, the total capacity for this technology is limited and so others must also be pursued. Nuclear fusion has been worked on for many decades and potentially offers a constant source of carbon free power. The right combination of solar and wind has the advantage that solar output is higher in the summer when wind power is lower and vice versa. (See Figure 4 in the appendix). The current level of solar capacity of 11GW is about the right level of capacity to balance the current onshore wind capacity of 10GW. For offshore wind which is significantly more efficient (such as in the North Sea or off the North of Scotland), the balancing solar capacity would need to be at least 1.5 times the offshore wind capacity. This would mean adding 75GW of solar capacity by 2030 to help balance the planned offshore wind. The solar capacity might be best located in a part of the country relatively close to the South – and southeast coasts and the southern east coat – where the sunshine hours are highest, providing this does not conflict with agriculture requirements. Geothermal is another technology being developed which has the real advantage of being constantly available and flexible in output. There are technical hurdles to be overcome but this is one of the most attractive opportunities.
Comparative cost of electricity generation
The table below shows a comparison between the costs of a few renewable sources of energy.
|Source of Power||Type||Without Storage||With Storage|
|Tidal Power||Intermittent – inter-day fluctuation||(£90/MWh)||£105/MWh|
|Offshore wind (Sussex Bay) 35% capacity||Intermittent – daily/weekly/seasonal fluctuation||2.78million Tons of CO2/year per GW capacity and £81/MWh||£3006/MWh|
|Offshore wind (Dogger Bank) 56% capacity||Intermittent – daily/weekly/seasonal fluctuation||1.88 million Tons of CO2/year per GW capacity and £51/MWh||£2975/MWh|
|Small Modular Nuclear (fission) reactors||Constant||£49/MWh to £74/MWh||£49/MWh to £74/MWh|
|Large-scale Solar||Intermittent – daily/weekly/seasonal fluctuation||TBC Tons of CO2/year per GW capacity and £39/MWh to £51/MWh||TBC|
Appendix of figures
 NOAK Projects commissioning in 2025, in real 2018 prices, from: ELECTRICITY GENERATION COSTS 2020 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/911817/electricity-generation-cost-report-2020.pdf
 Projected nuclear LCOE costs for plants built 2020-2025 in $/MWh, from: Economics of Nuclear Power: https://world-nuclear.org/information-library/economic-aspects/economics-of-nuclear-power.aspx
 UK Marine Energy Council Response – Technological Innovations and Climate Change: Tidal Power (Dec 2020) https://committees.parliament.uk/writtenevidence/19220/pdf/