Renewable electricity reached almost record levels in Q1-24, producing more than 50% of the UK’s total generation during that period. Based on the rapidly increasing allocations in the latest round of the CFD scheme, the launch of Great British Energy, and COP28’s goal of tripling renewables by 2030, we can expect that share to increase in the coming years.
However, the growth of renewables could be hindered by one major factor – Intermittency.
A common refrain when it comes to renewables and energy security is “What happens when the sun doesn’t shine, and the wind doesn’t blow?”
This is a valid concern, though when balancing demand at a grid level we should consider the sum of all parts – what is the likelihood that all renewable sources – solar, wind, tidal etc. – are not generating at a given time? And what are the ramifications if this was the case?
This is the primary reason behind continued support for traditional combustion-based generation, and necessity of the Capacity Market auctions – Ensuring that UK generation can always meet demand requires having large scale assets which can respond at any time.
Whilst coal-fired and CCGT power stations have understandably fallen out of favour (given their environmental impact) there remains support for alternative generation methods, such as Biomass and Nuclear. These are seen as more reliable than renewables, but also aren’t beyond reproach when it comes to their own environmental credentials.
This puts the renewable energy industry at an interesting inflection point. Appetite is strong, and expansion is still very much required for the UK to reach Net Zero. However, the rapid uptake – amidst a belief that alternative forms of generation will still be required – means that concerns are beginning to emerge regarding the potential for overinvestment.
A significant surplus of renewables would carry its own set of problems, such as curtailment (the practice of turning down generation when it is not required). For private businesses looking to make substantial investments into renewable projects, curtailment will be a considerable factor when modelling production risk. The more projects that come online, the greater the potential surplus, and the higher the likelihood of curtailment (or potential projects simply not securing the “strike prices” that make their investment viable).
In any scenario – whether the total available capacity is projected to exceed, or fall short of demand – the issue of intermittency is one which will need to be addressed.
In Part 2, we’ll begin examining some of the solutions, and the drawbacks hindering their widespread use.
