Balancing and flexibility in a 2050 net zero carbon economy

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High renewable energy penetration grids require balancing solutions ranging from hours to months and for both predictable and unpredictable variations.

Common wisdom is that a penetration of variable renewables up to about 30% can be integrated with sufficient flexibility in existing energy systems but when the penetration rises above that the balancing challenges become increasingly complex.

Three types of challenges must be considered. These are the daily balancing on timescales of hours, e.g. with large daytime solar output but large evening demand, predictable seasonal variations, e.g. with the changing demand peaks between summer and winter, and unpredictable week by week variations, e.g. due to extended absence of wind.

The scales of these obviously vary across regions and an optimal mix of variable renewable resources can minimise the balancing challenges. For example, analysis for Germany shows that an optimal 30%/70% mix of solar and wind generation can meet 80% ‘concomitant generation’ , i.e. of the hours of demand, leaving only 20% of hours where demand and supply must be matched either by storage or some form of dispatchable generation.

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On average a level of 75% of concomitant generation is projected for most regions, with the daily balancing requirement estimated at 8%, seasonal balancing at 15% and the week to week unpredictability at 2%.

Daily balancing

The Energy Transitions Commission in its plan for a net-zero system by 2050 considers balancing as “a vital but manageable challenge”, with daily balancing the most important and potentially easy to implement.

The Making Clean Electrification Possible: 30 Years to Electrify the Global Economy report states that it is increasingly certain that daily balancing can be met at low cost by deploying a range of energy storage and demand management levers.

Lithium-ion batteries are expected to be an increasingly cost-effective solution. Lithium-ion battery pack costs have fallen 85% in the last decade and are certain to fall still further as automotive demand drives the economy of scale and learning curve effects.

Other short term and medium term energy storage solutions may also play a significant role. Pumped hydro storage represents the majority of grid level storage today and is highly likely to be economic in many situations. Significant new capacity potential still exists.

Multiple energy storage technologies also are emerging, including flow batteries and compressed air.

Flexible demand response also has huge potential to meet the daily cycle. For example, large residential heating loads could be shifted by several hours in houses with domestic water heaters and micro heat storage technologies.

Electrification of road transport also creates a major opportunity, with electric vehicles able to provide both demand side flexibility via smart charging and energy storage via vehicle-to-grid.

In addition, many industrial and commercial electricity uses could vary demand in response to supply. These include multiple existing uses such as commercial AC or retailer chilling and freezing cabinets.

But the biggest opportunity probably lies in hydrogen electrolysis. Electrolysers will be sufficiently cheap to run cost effectively for only a small proportion of total yearly hours, with the ability to ramp up and down rapidly.

Seasonal balancing

For predictable seasonal cycles a range of solutions is available, the report states.

One is an ‘overbuild’ of variable renewable assets, which could provide a least cost option to meet seasonal balancing in many locations, even if it results in curtailment in low demand periods.

Another that is likely to be among the most cost-effective is the long-distance interconnection with other regions, both within and across countries, which have complementary renewable resources.

Dispatchable generation also offers options including hydro and nuclear. Emerging options for zero-carbon generation include hydrogen produced from electrolysis and burnt in compatible thermal plants when needed, natural gas plus carbon capture and storage and a constrained role for sustainable biomass.

Unpredictable variations

For unpredictable week-by-week variations, overbuild does not provide a solution and the role of interconnectors could be limited by security of supply concerns, the report comments. Lack of predictability is also likely to limit the industrial off-takers able to offer demand-side response solutions.

Therefore, some category of firm dispatchable capacity is almost certain to be required, as detailed above.

Hydrogen in combined cycle gas turbine plants could be the most cost-effective zero-carbon option, states the report. It estimates that generating electricity for 10% of hours per year using gas plus carbon capture and storage could cost between $0.13-24/kWh delivered and therefore contribute $0.01-$0.02/kWh to average total costs across the year.

However, the impact of this increase on total system costs in a variable renewable system relative to today’s costs could be offset by the low and falling cost of the renewable generation.

The report notes that overall at the system level, both the seasonal and unpredictable balancing challenges must be met, and therefore the cost optimal mix of zero carbon solutions must optimise across both.

Given the emerging flexibility options, multiple studies suggest that variable renewable energies could rise above 60% and as high as 90% of electricity generation in highly decarbonised systems.

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