Governments of all shades, and energy utilities, tend to believe that large, centralised solutions are the most cost-effective because of the economies of scale. There is a belief that local solutions will increase costs.
Ground-breaking work by an energy modelling company in the USA (Vibrant Clean Energy (VCE)) has turned this argument on its head, and this could, or should, have profound implications for any strategy to decarbonise the power grid in any country, including the UK, with renewables playing a dominant role in the future.
VCE summarise some key conclusions:
The present study finds that by including the co-optimization of the distribution system, the contiguous United States could spend $473 billion less on cleaning the electricity system by 95% by 2050 and add over 8 million new jobs. … The findings suggest that local solar and storage can amplify utility-scale wind and solar as well as provide economic stimulus to all regions across the contiguous US.
The study finds that wind, solar, storage and transmission can be complements to each other to help reduce the cost to decarbonize the electricity system. Transmission provides spatial diversity, storage provides temporal diversity, and the wind and solar provide the low-cost, emission-free generation.
We understand that what is true for USA can be true of the UK.
Now, in the UK, various groups have already published reports based on modelling of the grid to show that net zero is achievable. The Centre for Alternative Technology (CAT) produced a report ‘Zero Carbon Britain – rising to the climate emergency’ that showed how this could be achieved. They used granular weather data to help model supply and demand at national scale. Energy storage was included at utility scale (using excess energy on windy/ sunny days to produce synthetic gas that could be used to generate electricity during periods when both wind and solar were too low to meet total demand).
VCE have gone much further in the sophistication and granularity of the modelling:
- Firstly, they have modelled the dynamical behaviour of the grid at all scales – with 5 minute intervals and 3km square spatial grid over a minimum of 3 calendar year (and for planning reserves up to 175 years hourly at 30km grid). There was always a suspicion with other models that even if the national supply and demand appear to match up at a point in time, the grid will experience issues at particular points in the grid, particularly at local pressure points. VCE have addressed these weaknesses.
- Secondly, the economics of how the roll-out of the capacity is achieved is key to policy. The modelling includes economic aspects to show the marginal cost of each new tranche of generating capacity; and so modelling the evolution of the network, not just an assumed end point. VCE have modelled the period between ‘now’ and future end dates to see what impact different scenarios have on the marginal and net costs.
The astonishing result that VCE have found is that local renewables with local storage – even at only 10% of the total generating capacity – make a disproportionate impact on the speed and cost of further roll out of associated utility scale renewables. This is because it creates flexibility in the grid and relieves pressure points.
VCE note that this was an emergent behaviour of the system, which the modelling revealed, and certainly not obvious to energy specialists, because its only emerges when the model reaches a sufficient level of sophistication.
The bottom line is that we should see local renewables (including community energy schemes) not as marginal additional capacity in the transition to a greening of the grid, but as a key ingredient to both speed up – and lower the cost of – the transition. We should see small and big as beautiful, working collaboratively, to accelerate the greening of the grid.
This may seem quite a technical point for those who are not students of the energy system, but it is truly remarkable and transformative, and from a policy perspective, it highlights the need for Governments to continue to promote and invest in large, utility scale renewables, but also to assist in the roll out of local renewables and associated storage.
UK Treasury, please take note!
“Why Local Solar For All Costs Less: A New Roadmap for the Lowest Cost Grid”, Vibrant Clean Energy (VCE), December 2020, https://www.vibrantcleanenergy.com/media/reports/
VCE define emergent behaviour as follows:
Emergent behavior is characterized by properties and behavior that is not dependent on individual components, but rather the complex interactions and relationships between those individual components. Therefore, it cannot be fully predicted by simply observing or evaluating the individual components in isolation.