The UK Government’s commitment to power every home with offshore wind is a positive step towards reaching its ultimate goal of achieving net-zero.
However, it will only be possible if we re-think the way energy is generated, distributed and stored so that we can better manage the peaks and troughs associated with renewable generation.
In the past, balancing the system was easy, you simply burned more or burned less fossil fuel. But wind and solar generation are not so easy to control. Sometimes they produce too much power for the grid to accommodate, and sometimes too little to meet demand. If this is not managed well, it could lead to assets being switched off, which is expensive and inefficient; and in extreme cases power cuts.
At a national level, the system is managed using flexible demand, battery storage, and flexible generation. However, it is becoming increasingly important to manage network constraints at a local level too.
Allowing energy consumers – homes and businesses – to generate and store renewable energy and become active contributors to the energy system will be vital.
Such inter-trading of electricity is known as flexibility, and Centrica has concluded the UK’s biggest trial of its potential in over 200 homes and businesses in Cornwall. As part of the trial, five megawatts of low carbon technologies were installed across more than 100 businesses, and a further 100 homes received a combination of solar panels and wall mounted battery storage.
The stored capacity of the home battery systems was combined to form a Virtual Power Plant and, when aggregated, it was able to trade with the grid operators, completely autonomously. Some businesses saved as much as 35% on energy costs by operating at times more aligned with grid needs, we call this ‘greentime’.
Over three years, the £16.7 million Cornwall Local Energy Market (LEM) saw 310MWh of power traded successfully, with greenhouse gas savings of nearly 10,000 tonnes a year as a result.
Centrica has estimated as much as 25TWh of electricity will need to be traded flexibly every year, in order to support the Government’s ambitious wind power plans - that’s almost double the annual electricity demand of Wales (or the demand of New Mexico for those reading in the US).
Demand side response has been the domain of large energy users for nearly a decade, but the Cornwall LEM proves that homes and small businesses can play a role too.
We see a future where electric vehicles, smart hot water tanks and battery storage enable home and business owners to trade electricity providing balance to the electricity grid.
Such an approach to flexibility offers an alternative, more cost-effective way of tackling these constraints and gives consumers a real stake in managing the energy system.
We have shown that solutions like the Cornwall LEM can pave the way for a smarter grid that is better able to accommodate renewable energy; save money and reduce carbon for consumers; and create new economic opportunities for both homeowners and businesses.
In the UK, the upcoming Energy White Paper is an ideal opportunity for the Government to identify grid flexibility as a vital component in the transition to an electrified future and set a policy objective for the deployment of flexibility at a local and national level to meet net zero at least cost to consumers.
Read the full report detailing the results of the Cornwall Local Energy Market trial.