National Grid, the system operator of the GB power system, has produced its forecast of the challenges that it will confront over the summer in ensuring security of energy supplies.
National Grid has particularly highlighted that a greater amount of flexibility in both power generation and demand will be required during summer 2017 in order make sure that demand and supply are always in balance on the electricity system. This is particularly true during periods of record low demand and with increased variability in supply and demand on the system.
Drop in demand
In its Summer Outlook Report 2017, published on 6 April, National Grid predicted that the weather-corrected minimum demand for summer 2017 will be 17.3GW, 500MW lower than the minimum in 2016.
This continues a recent trend of falling summer minimum demand. In order to balance the system during these periods the system operator said that flexible generation (such as large gas-fired power stations and biomass) will need to be curtailed and inflexible generators (such as wind and solar farm operators) may also need to be told to reduce their output.
This downward trend is largely due to an increase in the levels of embedded generation: smaller scale generation that transmits its power through local networks, not the national transmission system. In particular, lots of solar has been installed in recent years, as well as a decrease in underlying demand as the energy efficiency of buildings and appliances has improved.
The report explained that traditionally, the daily variation in supply and demand has required “minimal intervention”. However, the recent changes in generation mix – like the increase in solar – and varying demand have increased the need for direct intervention from National Grid to ensure system security.
National Grid said it has made sure it has “a range of tools” to balance the system. For example, in February there was a successful tender for the “Demand Turn Up” service, which offers opportunities for large businesses to voluntarily shift their energy usage to increase consumption when called upon in exchange for a payment.
While National Grid has already procured 138.6MW of Demand Turn Up via the fixed tender in February, the Energyst reported on 7 April that National Grid is likely buy several times more capacity via flexible tenders run fortnightly during spring and summer.
The maximum available generation for summer 2017 is expected to be 68.9GW. The majority of transmission-connected capacity will come from large gas-fired power stations (28.1GW) with other significant contributors being wind (11.1GW), coal (10.1GW), nuclear (9GW), interconnectors (3.8GW), pumped storage (2.7GW) and hydro (1.2GW).
Despite making up a large share of available generation, the report found that it is “unlikely” that any coal-fired power stations will be able to operate at a profit, whether providing baseload or running at peak times. Based on analysis of current wholesale prices, gas-fired power stations are expected to be cheaper than coal-fired generators this summer, meaning they are likely to be priced out of the generating mix for much of the summer.
National Grid expects that the minimum available generation will occur in the week commencing 31 July, where capacity is expected to fall to 38GW. However, it added that it is confident it will still be able to meet its demand and reserve requirements over this period.
Cordi O’Hara, Director of UK System Operator at National Grid, explained that ever-decreasing summer minimum demand means that “summer is now as challenging as winter. Even though we have an obsession with the winter peak in the UK, we do need to think about the summer and its operation too.”
Stable gas supplies
As well as exploring forecasts for the power system over summer, National Grid also delivered it outlook of GB’s gas supplies and demand.
It said that GB benefits from “highly diverse and flexible” gas supplies, receiving gas from the UK Continental Shelf (UKCS), Norway, Belgium, the Netherlands and in the form of liquefied natural gas (LNG) from global sources.
The amount of gas supplied from each of these sources varies and is dependent on production, competition with other markets, and on the level of gas demand. The supply of gas from the UKCS and Norway is expected to be fairly high this summer, mirroring the rates seen across 2016. Other sources are likely to be more responsive to short-term market conditions.
National Grid also expects to see more variable patterns of gas supply and demand this summer, as industry players respond to movements in GB and European gas and electricity prices.
That said, gas demand is typically much higher in winter, due to its use for household and business heating. Therefore, National Grid is confident that this range of supply sources will be sufficient to ensure gas demand is met this summer.
A reminder of the rapid changes to the British electricity system came on 21 April, as National Grid confirmed it had supplied Great Britain’s electricity demand without coal generation for the first 24-hour period since the 1880s. The system operator hailed the event as a “watershed” moment.
Duncan Burt, Head of Real-time Operations at National Grid commented: “The Industrial Revolution started with coal and it’s been the absolute backbone of our power for most of the time since […] Days like this will become more and more common in the next two or three years, and by the early 2020s burning coal will become increasingly rare.”