The Alternative Green Energy Thread

michaels

JKenH said:

michaels said:

As per the NESO net zero report.  Net zero is based on continuing to use gas when required and balancing this with exports of renewables.

How much of the wind energy would need to be curtailed (but still paid for) before the price per unit is equal to that of the Hinckley C contract?  50%?

Isn't curtailment / free or given away electricity likely to create a bigger market for storage technologies / uses that can work with an intermittent supply?

Yes, NESO have acknowledged the case for some gas in the system. That might be 5% of annual generation but that isn’t  the same as 5% of capacity.  If demand grows (as is expected to accommodate more EVs and heat pumps) then faced with a situation like today, when renewables are barely contributing, there will be much more gas generation capacity needed than our current 27GW or so. If demand grows by 10GW as seems likely, then “when the wind isn’t blowing”, we will need almost a further 10GW of new gas capacity just to make up the shortfall. Some older nuclear plants will be retiring (along with some older gas plants) so there may be an even bigger gap to fill. Maybe more interconnects and some storage will come online but will it be at the rate needed? Remember, when we have low wind here, our continental neighbours will also be facing the same problem, so how much spare export capacity will there be? Given the risks to undersea cables from bad actors it seems that the senior bods at NESO are going to have to keep both their fingers and our toes crossed. 

I just wonder how NESO think that, say, 35 GW of gas capacity can be economically sustained for just a few days a year like this. It won’t be cheap. UK’s electricity is already the most expensive in Europe. Does that not matter?

I am perhaps being cynical, but the way to progress in an organisation seems to be to say what your masters want to hear, and hope that by the time the pigeons come home to roost, you will have moved on or be collecting a gold plated pension. If you tell your masters that their political promises are not possible to achieve you will soon be moved out of the way in favour of a Yes Man. 

It might all work out but not a lot of thought is being given to the possibility that it might not. 

What is the actual forecast for demand growth in the time frame - both for peak and average?

In theory demand flexibility should help a lot (filling car batteries during the lower grid demand periods and discharging them at peak etc) but the problem with heat pumps is that they are least efficient just when the heat demand is highest (cold anticyclonic winters days and nights?) so although their average demand may be fine their peak demand is probably correlated with minimum wind output which I suspect may make things a lot harder?

JKenH

I am putting forward some figures as a basis for discussion and would welcome others views on future electricity costs.

I’ll start with how NESO sees generation developing by 2030

https://www.carbonbrief.org/analysis-how-the-uk-plans-to-reach-clean-power-by-2030/

The two alternative scenarios are as follows:

The “new dispatch” pathway relies more on low-carbon “dispatchable” power, meaning capacity that can be turned on and off at will. This includes gas-fired power stations fitted with carbon capture and storage (CCS), or turbines that burn low-carbon hydrogen fuel.

The “further flex and renewables” pathway relies on larger amounts of wind and solar capacity, coupled with a more flexible grid and higher levels of battery or long-duration energy storage.

Given what we know already the “further flex and renewables” pathway appears the more likely.

Leaving out interconnectors, storage and demand flexibility, it sees an increase in generation capacity from 92GW to 168GW or renewable capacity up from 46 GW to 125 GW, a threefold increase. Storage increases from 8GW to 35 GW. On very windy days (reaching capacity) wind could exceed storage by 45 GW which would be almost perfect to meet demand but no indication of storage duration is given so at times we could have 35GW or almost half wind capacity being curtailed. ( I have ignored consumer led flexibility helping with over generation just as I have ignored solar possibly contributing at the same time as wind assuming they cancel each other out).

Interconnector capacity is only planned to increase by 20% or 2GW (so presumably the Morocco interconnector is not included).

Meanwhile we are keeping on 35GW of unabated gas of which 95% will be constrained - that will require some form of subsidy, be it constraint payments or some form of retention for making capacity available. 

While therefore we might be able to buy renewable energy at a wholesale cost of, say 8p/kWh, constraint payments and subsidies for back up generators/storage* could easily double this. 

While it was originally suggested bill payers could see savings of £300/year this forecast has been dialled back to no additional cost. Bear in mind average wholesale cost of electricity for 2024 was only £70/MWh or 7p/kWh I think we are likely to be seeing prices at least double by 2030. 

Edit: *plus infrastructure upgrade costs 

michaels

Of course guessing the future of gas prices is a mugs game so it is very hard to know whether renewables will increase or decrease overall cost.

I guess the low carbon dispatchable is the Drax wood pellets?

Batteries are normally assumed to store about 4 hours worth of their output capacity?

But I guess the big cost question is what proportion of CCGT costs are fixed and variable?

No renewables generation there seems to be minimum 4 nuke, 4 bio, 35 gas = 43gw I wonder if that running 24/7 would be enough (along with the storage) to keep the lights on for several days of winter anticyclone gloom (with the undersea cables cut by Russia or there being no supply available from Europe?) - sounds enough for current consumption but would it be enough with 25% or more EV penetration and over 10% ASHP?

JKenH

michaels said:

Of course guessing the future of gas prices is a mugs game so it is very hard to know whether renewables will increase or decrease overall cost.

I guess the low carbon dispatchable is the Drax wood pellets?

Batteries are normally assumed to store about 4 hours worth of their output capacity?

But I guess the big cost question is what proportion of CCGT costs are fixed and variable?

No renewables generation there seems to be minimum 4 nuke, 4 bio, 35 gas = 43gw I wonder if that running 24/7 would be enough (along with the storage) to keep the lights on for several days of winter anticyclone gloom (with the undersea cables cut by Russia or there being no supply available from Europe?) - sounds enough for current consumption but would it be enough with 25% or more EV penetration and over 10% ASHP?

I agree with what you say about future uncertainty so it is very hard to predict how future gas generation prices will work out. In fact I find it quite difficult to work out how they compare today. 

If we look at yesterday and compare with today’s prices we see that despite yesterday’s generation being heavily dependent on gas (62%) the average price (both day ahead and spot) was lower than today’s when wind made a more significant contribution and gas was lower (40%).

https://electricinsights.co.uk/#/dashboard?start=2025-01-23&&_k=ejhgk9

Looking at the fuel component of gas generation, I found this

If we’re talking about modern Combined Cycle Gas Turbine (CCGT) power stations then these are around 60% efficient. A cubic metre of natural gas produces around 11kWh of heat energy, and so at 60% efficiency a CCGT plant will produce 6.6kWh of electricity from this cubic metre. Or to answer the question precisely this means 0.15 cubic metres of gas are needed to generate 1kWh of electricity.

https://www.quora.com/How-much-natural-gas-is-required-to-generate-1-MWH-of-electricity

Prices per therm are around 127p - quite high at the moment compared to around 60p last March - which equates to 45p/cu.m. which produces 6.6kWh or 6.8p/kWh. The March 2023 figure would have been around half this (3.2p/kWh)

https://tradingeconomics.com/commodity/uk-natural-gas

These figures from Ember suggest the fixed costs of gas generation rose from £15 to £25/ MWh. (1.5 to 2.5p/kWh)

Edit:

The cost of generating electricity from fossil gas, including the associated carbon allowance costs, has also tripled to over £100/MWh (August 2021) from £29/MWh (August 2020). And while the price of carbon allowances has also risen over the same period from £42/tonne to £66/tonne, its contribution to the increased cost of electricity generation is minimal when compared to the fossil gas price.

Analysing the fossil gas cost component alone, it has soared by £61/MWh (from £14/MWh to £75/MWh). Consequently, the increase in fossil gas costs equates to 86% of the wholesale electricity price rise of £71/MWh.

https://ember-energy.org/latest-insights/fossil-gas-uk-electricity-prices/

New offshore wind in AR6 works out around 8p/kWh in today’s prices.

michaels

JKenH said:

michaels said:

Of course guessing the future of gas prices is a mugs game so it is very hard to know whether renewables will increase or decrease overall cost.

I guess the low carbon dispatchable is the Drax wood pellets?

Batteries are normally assumed to store about 4 hours worth of their output capacity?

But I guess the big cost question is what proportion of CCGT costs are fixed and variable?

No renewables generation there seems to be minimum 4 nuke, 4 bio, 35 gas = 43gw I wonder if that running 24/7 would be enough (along with the storage) to keep the lights on for several days of winter anticyclone gloom (with the undersea cables cut by Russia or there being no supply available from Europe?) - sounds enough for current consumption but would it be enough with 25% or more EV penetration and over 10% ASHP?

I agree with what you say about future uncertainty so it is very hard to predict how future gas generation prices will work out. In fact I find it quite difficult to work out how they compare today. 

If we look at yesterday and compare with today’s prices we see that despite yesterday’s generation being heavily dependent on gas (62%) the average price (both day ahead and spot) was lower than today’s when wind made a more significant contribution and gas was lower (40%).

https://electricinsights.co.uk/#/dashboard?start=2025-01-23&&_k=ejhgk9

Looking at the fuel component of gas generation, I found this

If we’re talking about modern Combined Cycle Gas Turbine (CCGT) power stations then these are around 60% efficient. A cubic metre of natural gas produces around 11kWh of heat energy, and so at 60% efficiency a CCGT plant will produce 6.6kWh of electricity from this cubic metre. Or to answer the question precisely this means 0.15 cubic metres of gas are needed to generate 1kWh of electricity.

https://www.quora.com/How-much-natural-gas-is-required-to-generate-1-MWH-of-electricity

Prices per therm are around 127p - quite high at the moment compared to around 60p last March - which equates to 45p/cu.m. which produces 6.6kWh or 6.8p/kWh. The March 2023 figure would have been around half this (3.2p/kWh)

https://tradingeconomics.com/commodity/uk-natural-gas

These figures from Ember suggest the fixed costs of gas generation rose from £15 to £25/ MWh. (1.5 to 2.5p/kWh)

Edit:

The cost of generating electricity from fossil gas, including the associated carbon allowance costs, has also tripled to over £100/MWh (August 2021) from £29/MWh (August 2020). And while the price of carbon allowances has also risen over the same period from £42/tonne to £66/tonne, its contribution to the increased cost of electricity generation is minimal when compared to the fossil gas price.

Analysing the fossil gas cost component alone, it has soared by £61/MWh (from £14/MWh to £75/MWh). Consequently, the increase in fossil gas costs equates to 86% of the wholesale electricity price rise of £71/MWh.

https://ember-energy.org/latest-insights/fossil-gas-uk-electricity-prices/

New offshore wind in AR6 works out around 8p/kWh in today’s prices.

Thanks
But a bit more digging I guess to work out exactly what the fixed costs of a 1gw CCGT are per year and thus how much they will be per kwh if the plant only runs for 5% of the time.

I assume that price per kwh for wind assumes zero curtailment payments, so f we got to the point where only 50% of the generation were used then the cost per used kwh would be 16p?

Reed_Richards

If a gas plant is 60% efficient at generating electricity, what happens to the other 40%?  If it ends up as heat that is vented to the atmosphere, is that a significant contribution to global warming or is it really only the greenhouse gasses that contribute?

QrizB

Reed_Richards said:

If a gas plant is 60% efficient at generating electricity, what happens to the other 40%?  If it ends up as heat that is vented to the atmosphere, is that a significant contribution to global warming or is it really only the greenhouse gasses that contribute?

It ends up as heat

It's not a huge contribution; it's the same amount of heating as the sunlight that falls on an OS grid square. The CO2 is much more significant.

JKenH

michaels said:

JKenH said:

michaels said:

Of course guessing the future of gas prices is a mugs game so it is very hard to know whether renewables will increase or decrease overall cost.

I guess the low carbon dispatchable is the Drax wood pellets?

Batteries are normally assumed to store about 4 hours worth of their output capacity?

But I guess the big cost question is what proportion of CCGT costs are fixed and variable?

No renewables generation there seems to be minimum 4 nuke, 4 bio, 35 gas = 43gw I wonder if that running 24/7 would be enough (along with the storage) to keep the lights on for several days of winter anticyclone gloom (with the undersea cables cut by Russia or there being no supply available from Europe?) - sounds enough for current consumption but would it be enough with 25% or more EV penetration and over 10% ASHP?

I agree with what you say about future uncertainty so it is very hard to predict how future gas generation prices will work out. In fact I find it quite difficult to work out how they compare today. 

If we look at yesterday and compare with today’s prices we see that despite yesterday’s generation being heavily dependent on gas (62%) the average price (both day ahead and spot) was lower than today’s when wind made a more significant contribution and gas was lower (40%).

https://electricinsights.co.uk/#/dashboard?start=2025-01-23&&_k=ejhgk9

Looking at the fuel component of gas generation, I found this

If we’re talking about modern Combined Cycle Gas Turbine (CCGT) power stations then these are around 60% efficient. A cubic metre of natural gas produces around 11kWh of heat energy, and so at 60% efficiency a CCGT plant will produce 6.6kWh of electricity from this cubic metre. Or to answer the question precisely this means 0.15 cubic metres of gas are needed to generate 1kWh of electricity.

https://www.quora.com/How-much-natural-gas-is-required-to-generate-1-MWH-of-electricity

Prices per therm are around 127p - quite high at the moment compared to around 60p last March - which equates to 45p/cu.m. which produces 6.6kWh or 6.8p/kWh. The March 2023 figure would have been around half this (3.2p/kWh)

https://tradingeconomics.com/commodity/uk-natural-gas

These figures from Ember suggest the fixed costs of gas generation rose from £15 to £25/ MWh. (1.5 to 2.5p/kWh)

Edit:

The cost of generating electricity from fossil gas, including the associated carbon allowance costs, has also tripled to over £100/MWh (August 2021) from £29/MWh (August 2020). And while the price of carbon allowances has also risen over the same period from £42/tonne to £66/tonne, its contribution to the increased cost of electricity generation is minimal when compared to the fossil gas price.

Analysing the fossil gas cost component alone, it has soared by £61/MWh (from £14/MWh to £75/MWh). Consequently, the increase in fossil gas costs equates to 86% of the wholesale electricity price rise of £71/MWh.

https://ember-energy.org/latest-insights/fossil-gas-uk-electricity-prices/

New offshore wind in AR6 works out around 8p/kWh in today’s prices.

Thanks
But a bit more digging I guess to work out exactly what the fixed costs of a 1gw CCGT are per year and thus how much they will be per kwh if the plant only runs for 5% of the time.

I assume that price per kwh for wind assumes zero curtailment payments, so f we got to the point where only 50% of the generation were used then the cost per used kwh would be 16p?

Ok, I will have a stab at this. 

If I have read this document (https://ukerc.rl.ac.uk/ETI/PUBLICATIONS/AdHoc_CCS_CC1025_2.pdf)  right the fixed cost in 2017 figures would be about £71m for a 620 MW station. On top of that there is a cost of about £0.5m for a cold start. I have no idea how many would be needed per year but if, say 12, then that would take the cost up to £77m/620MW, or about £103m in todays money which works out at £166m/GW of stand by capacity. For 35GW of CCGT on stand by the cost will be about £5.8bn annually. Based on last years generation of 258 TWh, that would work out at about 2.25p/kwh additional fixed cost. If however demand rises to 350 TWh it would only add 1.65p/kWh to the wholesale price. (I would be pleased if someone could check this calculation as I hate working with numbers that go beyond the capacity of my 8 digit calculator as there are just too many 0s to deal with.) 

1.65p or even 2.25p/kWh might not seem much but last years day ahead wholesale price averaged just 4.3p/kWh so to spend between 38% and 52% of our current annual generation costs just on plant sitting on standby is a big cost to absorb. (The £71/MWh price I quoted in an earlier post was the spot price). 

This just doesn’t seem right so I hope someone can come up with some better figures. 

JKenH

I am now beginning to get really worried about future electricity prices. 

In March 2024, the Beyond 2030 update was published that estimated an additional £58 billion of investment will be needed to deliver offshore and onshore network upgrades throughout the 2030s.

https://commonslibrary.parliament.uk/research-briefings/cdp-2024-0156/


If my calculations in the previous posts were correct this will add 16.5p to 22.5p/kWh spread over 5 years so around 3.2p to 4.5p/kWh per annum to the cost of providing electricity over the next five years. That’s huge compared to the current wholesale cost of electricity - in fact almost doubling it. 

Everything makes me think I have gone wrong with the number of zeros.



Correction: the £58bn referred to is through the 2030s. The figure for grid upgrades up to 2030 is £54bn which makes a fraction of a penny difference to the additional cost per kWh suggested. 

NESO, the electricity system operator for Great Britain, carried out a review of the grid requirements needed to deliver the increase in offshore wind and other low carbon generation. This review reported in July 2022 with Pathway to 2030, which recommended a single, integrated network connecting new offshore wind farms and associated offshore and onshore transmission networks. It was estimated that £54 billion would be needed to deliver the recommendations. In March 2024, the Beyond 2030 update was published that estimated an additional £58 billion of investment will be needed to deliver offshore and onshore network upgrades throughout the 2030s.

michaels

Useful numbers. However I wonder if day ahead prices are the best comparator. Might make more sense to compare against the 25p retail price. Not that they are negligible even in this context.

Edit: do we know if the £54bn is all extra spend as no doubt there is already some grid spend in the 25p?