Why Renewables Are Difficult

Renewable energy represents one of the most promising solutions to climate change since it emits no greenhouse gases. However, it poses some difficulties for power systems. Source: U. Leone

The issues of climate change and sustainability seem to be everywhere throughout politics, media and public sentiment, and represent a significant challenge for current and future generations. Making our lifestyles sustainable will require, among other things, drastic reductions in worldwide greenhouse gas emissions. One of the biggest sources of such emissions is the generation of electricity, and this proportion is expected to increase as electric cars, heating and the internet-of-things takes off. “Greening up” power supply is essential. The good news is that it is possible to generate electricity without any emissions whatsoever through renewables. Examples include wind turbines and solar panels, which are called renewable since their source of energy (wind and sun respectively) do not run out. This can be contrasted with fossil-fuel generation, which uses finite fuels such as coal, oil or gas, and emits greenhouse gases.

Renewable technologies have been around for years, and public awareness of the need to reduce greenhouse gas emissions since around the 80’s. However, most countries still generate the vast majority of their electricity from non-renewables that emit carbon or damage the environment in other ways (e.g. nuclear waste). Why, after decades of both the problem and a solution being known, haven’t renewables taken off yet? This article hopes to give the reader a sense of why renewables are “difficult”, and how the world can keep the lights on into the future in a cheap, secure, and sustainable way.

Until recently, the primary reason for the slow uptake of renewables was economical. It was impossible to build wind turbines and solar panels cheaply enough to compete with fossil fuel technologies, which had become highly cost effective after more than 100 years of use. While there was some effort, governments were not willing to spend billions on subsidising renewables when electricity could be generated cheaply in other ways. Mark Rutte, the Dutch prime minister, frequently claimed in debates between 2010 and 2014 that “windmills are only powered by subsidy” (link in Dutch). However, as time passed, improved manufacturing methods, economies of scale and increased competition has sent prices plummeting. The price of solar panels has decreased by a factor over 100 in the last 40 years, and generation through many renewables is now cheaper than fossil fuels.

So, is it just a matter of time before fossil fuel electricity disappears? Why are societies still so hesitant to go 100% renewable? To understand why, a quick introduction to power systems (meaning the industries, infrastructures and markets based around electricity) must be given.

At their core, power systems are simply supply & demand problems. Industries and consumers use electricity that is provided by generators. One key feature distinguishes power systems from other economic markets: there is virtually no means of storing it at large scale (with the notable exception of hydropower, discussed below). This implies that supply & demand must be continuously matched exactly, and makes managing the grid both complicated and essential. Usually, some independent party, called a system operator, is issued this task.

(As an aside, in the UK, there is a fantastic website, called Drax Electric Insights, in which the total UK electricity demand, and exactly from which sources it is being generated, can be browsed through in real time as well as historically. Looking through it for a few minutes will give a better feel for how power systems work than any blog post can).

A still from Drax Electric Insights, where electricity demand and generation levels can be browsed through, both in real time and historically. Source: Drax Electric Insights

Before renewables, most electricity was generated by fossil fuel plants. Fuel (e.g. coal or gas) could be burnt at different rates, and level of electricity supply was directly adjusted to meet demand. One caveat to this is that output levels in some types of plants cannot be adjusted arbitrarily quickly. To combat this, planners use baseload generation to generate most electricity, and peaking plants, whose output could be varied rapidly, to meet short-term fluctuations in demand. For example, the UK’s system operator had to deal with a massive demand spike just after the royal wedding, as millions turned on their kettles at the same time. Throughout the rest of the article, the term conventional generation will refer to generation through fossil fuels for which the output levels can be directly controlled.

A famous graph showing total UK electricity demand during the 1990 World Cup semi-final against Germany, with spikes at times that viewers turned on their kettles en masse. System operators had to rapidly adjust supply to ensure the lights stayed on. Source: National Grid

With renewables, the single biggest difficulty is that their production levels typically can’t be controlled. It’s not always windy or sunny, and times of high renewable output do not always align with times of high demand. How does one ensure the lights stay on on a cloudy day or when the wind tails off?

In most countries, this is not yet a problem since renewable capacity is small and their output never exceeds demand. Renewables produce whatever electricity they can, and the rest is picked up by conventional generation. Two complications warrant mentioning.

Firstly, the flexibility required from the grid increases. As well as just demand fluctuations, systems must also be able to deal with renewable output variability. To prevent blackouts, conventional generation (fossil-fuel power plants whose output can be controlled directly) must be able to ramp up quickly enough to meet a simultaneous demand spike and rapid drop in wind levels. In the Netherlands, in May 2018, the domestic grid was unable to respond quickly enough to an unexpected drop in wind-speeds and associated wind power, and required emergency imports from Belgium at high cost (link in Dutch).

Secondly, the advent of renewables changes the economics of power markets. Power plant owners tend to have a standard business model: build an expensive power plant and pay off the investment cost using the proceeds from the sale of electricity. For this to work, electricity prices need to be high for a large proportion of the time. When renewables are added to the grid, this changes: at times of high wind or sun, they produce electricity virtually free, pricing out conventional generation. This means that investing in a conventional power plant, or keeping an old one open, may no longer be economical. However, if this happens, when renewable output is low, there is no conventional generation left to provide power! To counteract this effect, many countries, including the UK, host capacity auctions, in which they subsidise producers to meet demand when necessary. In this way, while renewables displace conventional generation, they tend not to allow for the permanent closure of conventional plants. Note that this economic reality applies to renewables too: the more wind is added to the grid, the more it pushes electricity prices down at windy times, thus eating into its own profits.

(Two additional complications, which will not be discussed at length here, are the issues of transporting electricity from windy areas to demand centres, and frequency stability through inertia. In Germany and Ireland, these issues have already led to multiple occurrences of wind curtailment, in which wind farm owners are paid to turn off their turbines).

The issues of both flexibility and supply security will intensify as more renewables are added to the grid. Thankfully, there are a few ways that society can both use renewables and keep the lights on in the future. They fall broadly into two categories.

The first is electricity storage. With grid-scale storage, excess electricity production on windy or sunny days can be stored and used in times when renewable output is low. Besides adding to supply security, this would enhance the economic picture for renewables since storage owners buy up electricity when price is low and sell it when price is high, evening out price jumps. At present, the reason storage plays only a small role is economical. Battery prices still have to drop significantly before they can be used at large scale.

The second possible solution is by interconnecting different countries better and allowing them to share electricity. When it is wind-free in London, the chance is high it is in Scotland as well. However, it may be windy in Germany or Spain. Transporting electricity around could help alleviate supply insecurity. The UK currently has interconnections with France, the Netherlands, and Ireland, and more are in the pipeline. This may eventually become what has been termed the European Supergrid, where electricity can be transported across Europe to balance out regional renewable supply peaks and troughs.

There is one important exception to storage being uneconomical: hydropower. It has been around since the early 1900’s, and typically involves a high dam being built in a river, creating an artificial lake and an elevation difference on either side of the dam. Water is allowed to flow down the dam, powering a turbine to generate electricity in the the process. The generation levels can be controlled by adjusting the flow level, and there is a natural storage function: when demand is low, water is allowed to accumulate in the lake. In this way, the lake is “charged” by nature when it rains and water from the mountains flows into it.

Hydropower provides an economical option to store electricity, but requires mountainous terrain. Source: skeeze

Hydropower is a great form of electricity since its output can be controlled and has no associated greenhouse gas emissions. Norway, for example, generates virtually all its electricity from such dams and exports power to other countries when their demand is low. A difficulty is that hydropower requires mountainous and rainy terrain, which not all countries have.

(Since hydropower is so convenient, some developed countries are attempting to engineer their own forms of hydropower even without the above-mentioned terrain. In the UK, a notable example is tidal power, in which an artificial lagoon is constructed that water can enter and exit through turbines, generating power. At present, there are fierce discussions about the economics of such a project.)

The prospect of combining hydropower and interconnections between countries is tempting, since it means countries with lots of wind but little storage capacity, like Germany or Denmark, could “use Norway as a battery” by exporting their excess wind power to Norway in windy periods, who allow their dams to accumulate water. In calm spells, the hydropower generation levels could be increased and excess electricity exported back the other way. Making this work will require significant increases in Norwegian hydropower infrastructure, interconnection lines and international cooperation.

The batteries in electric cars can be used for grid management provided that owners agree to this. Source: Marilyn Murphy

Another creative solution to the storage problem is to use the big and expensive batteries in electric cars. Electric car uptake will lead to demand spikes when people return from work and plug them in to charge. An electric car owner could get the option of cheaper electricity if it means her car’s battery is not charged, or even emptied, during demand spikes and recharged when demand is lower. This presents interesting dilemmas: suppose you arrive home from work at 6pm and will leave again the next morning at 8am. Would you accept a cheaper charging price, if it meant your car might not be charged if you had to leave unexpectedly at 8pm?

Current power systems are not yet ready to use renewables for the majority of their electricity supply. However, the immediacy of the climate change danger means business-as-usual is not an option, and a total energy revolution is required, including in the electricity sector. Presently, the most realistic short- and medium-term solution is the use of renewables. This article hopes to give the reader a sense of the problem, why renewables are “difficult” and some the possible solutions. It is an exciting time to be in energy, and nobody knows how the power system of the future will look. But everyone agrees it will be very different.

Adriaan Hilbers

Adriaan Hilbers

Researcher in Mathematics of Power Systems at Imperial College London
Adriaan Hilbers

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