The Anonymous Widower

Ofgem Enables National Grid To Make Early Payment Of Interconnector Revenues, Helping To Reduce Household Bills

The title of this post, is the same as that of this press release from National Grid.

These are the first three paragraphs.

National Grid has offered to pay £200m of interconnector revenues ahead of schedule rather than at the end of the standard five-year review period to play its part in reducing household energy bills.

Interconnectors, which are subsea electricity cables connecting the UK and Europe, enable the import of cheaper, cleaner energy from European neighbours, supporting security of supply and reducing carbon emissions.

It’s estimated that National Grid’s interconnector portfolio will help the UK avoid around 100 million tonnes of carbon emissions by 2030.

Ofgem has approved National Grid’s request to make early payments.

These are my thoughts.

What’s In It For Consumers?

National Grid is making a payment early, so they are not getting anything, they won’t eventually get.

But they are getting it early!

What’s In It For National Grid?

As National Grid is making a payment early, they are forgoing interest on the £200 million.

In New Electricity ‘Superhighways’ Needed To Cope With Surge In Wind Power, I talked about National Grid’s plan to build new North-South interconnectors, that would handle all the extra wind-power.

National Grid currently owns all or part of these operating or planned interconnectors.

National Grid would appear to have a substantial interest in the UK’s interconnectors and is the £200 million payment to ensure they get the contract to build and operate any new UK interconnectors? I’m not saying it’s a bribe, but it’s just operating the interconnectors in a manner that is an advantage to the UK and its electricity customers.

Surely, if the ultimate customers are happy, there will be less calls for the break-up of National Grid.

What Is A Cap And Floor Regime?

The press release explains a cap and floor regime like this.

Ofgem’s cap and floor regime sets a yearly maximum (cap) and minimum (floor) level for the revenues that the interconnector licensees can earn over a 25-year period. Usually, revenues generated by the interconnector are compared against the cap and floor levels over five-year periods. Top-up payments are made to the interconnector licensee if revenues are lower than the floor; and similarly, the licensee pays revenues in excess of the cap to consumers.

Ofgem’s approval enables National Grid to make payments of above cap revenues significantly earlier than originally planned, which will contribute to reducing consumer energy costs over the next two years. National Grid is now working with Ofgem to explore how to ensure the early payments can have the most impact for consumers.

I wonder if Ofgem and National Grid feel that a cap and floor regime is not only good for them, but for electricity consumers as well.

Cap And Floor Regimes And Energy Storage

There has been talk that cap and floor regimes should be used for energy storage.

This article on Current News is entitled Cap And Floor Mechanism The ‘Standout Solution’ For Long Duration Storage, KPMG Finds.

These are the first two paragraphs.

A cap and floor regime would be the most beneficial solution for supporting long duration energy storage, a KPMG report has found.

Commissioned by Drax, the report detailed how there is currently no appropriate investment mechanism for long duration storage. Examining four investment mechanisms – the Contracts for Difference (CfD) scheme, Regulated Asset Value (RAV) model, cap and floor regime and a reformed Capacity Market – it identified cap and floor as the best solution.

I also suspect that if the operator does a National Grid with the revenues, a cap and floor regime, must be even better.

I would not be surprised to see schemes like Coire Glas pumped hydro operating under a cap and floor regime.

Effect On Other Energy Companies

Wind farms seem to be operated under the Contracts for Difference scheme in many cases, but will we see cap and floor regimes being used in this market?

I can certainly see a new regime emerging, that is better for investors, wind farm builders, consumers and the Treasury.

In some ways keeping a happy relationship between the investors, Government and consumers is most important. So as National Grid, the Government and consumers don’t seem to be jumping up and down about their cap-and-floor regime, it must be working reasonably well!

Conclusion

Get the right regime and quality investors could be flocking to the UK’s energy generation and supply industry.

National Grid by their actions in paying up early, have thoroughly endorsed the system.

May 12, 2022 Posted by | Energy, Energy Storage | , , , , | 9 Comments

Ministerial Roundtable Seeks To Unlock Investment In UK Energy Storage

The title of this post, is the same as that of this press release from Drax.

These are the first two paragraphs.

Business leaders have met with UK Energy Minister the Rt Hon Greg Hands MP to discuss how the government could unlock significant investment in vital energy storage technologies needed to decarbonise the power sector and help ensure greater energy independence.

The meeting was organised by the Long-Duration Electricity Storage Alliance, a new association of companies, progressing plans across a range of technologies to be first of their kind to be developed in the UK for decades.

This press release, which I found on the Drax website, has obviously been produced by the four companies; Drax, Highview Power, Invinity Energy Systems and SSE Renewables.

Greg Hands MP, who is the Minister of State for Business, Energy and Clean Growth said this.

The Long-Duration Electricity Storage Alliance is a key part of our plan to get the full benefit from our world-class renewables sector. Government have already committed £68 million of funding toward the development of these technologies.

“This will support the UK as we shift towards domestically-produced renewable energy that will boost our energy security and create jobs and investment.

The three CEOs and a director from SSE, make statements about what they are doing and what they need from Government, which are all worth reading.

  • Drax still needs planning permission for its flagship project at Cruachan, that is called Cruachan 2.
  • SSE are saying that the massive 30 GWh Coire Glas pumped hydro scheme has full planning permission and is shovel-ready.
  • Drax and SSE appear to be in favour of Cap and Floor regimes to support long term energy storage.
  • Highview Power and Invinity Energy Systems appear very optimistic.
  • Finance for capital cost is not mentioned. As billions will be needed for some of these schemes and the returns are very predictable, I assume that it has been promised.

After reading this press release fully, I too am optimistic.

Conclusion

I feel sure, that a sensible plan will evolve fairly soon, which will involve these four companies and possibly some others.

March 19, 2022 Posted by | Energy, Energy Storage | , , , , , , | 5 Comments

A Resilient Net Zero Electricity System Achievable By 2035 But Increased Investment Required, Regen Report Finds

The title of this post, is the same as that of this article on Current News.

This is the first two paragraphs.

The technical solutions needed to operate a net zero electricity system by 2035 are available or attainable, Regen has found, though a step-change in the level of investment is still needed.

The trade body has produced a new report for National Grid ESO into a ‘day in the life’ of a fully decarbonized electricity system by 2035, which the ESO is aiming for.

The article gives a lot of figures about our electricity supply in 2035.

Consumption of electricity will be between 450 and 500TWh per year, with the following sources.

  • 55-65GW of offshore wind
  • 25-35GW onshore wind
  • 40-50GW of solar
  • 6-10GW of other renewables
  • 10-15GW of low carbon dispatch
  • 8-10GW of nuclear
  • 8-12GW of carbon capture and storage (CCS)
  • 15-25GW of fossil fuel backup.

Note.

  1. 450-500 TWh is 51-57 GW per hour averaged out over the year.
  2. They emphasise the importance of energy storage.
  3. No mention is made of the massive Coire Glas pumped hydro storage.
  4. No mention is made of hydrogen.
  5. As is normal, with reports like this the authors don’t keep their GW and GWh separate.
  6. They also don’t explain the hierarchy of MW, GW and TW, which is 1000 x steps up the scale.

The full report is at this page on the Internet.

March 17, 2022 Posted by | Energy, Energy Storage | , , | 2 Comments

The Coire Glas Pumped Storage Scheme

The Coire Glas pumped storage scheme, which is being developed by SSE Renewables will be the first large scale pumped storage scheme to be developed in the UK for more than 30 years.

  • It would have a power output of 1.5 GW.
  • Compared to Dinorwig (Electric Mountain) in Wales at 9.1 GWh and Cruachan in Scotland at 7.1 GWh, it will be a giant.
  • Planning permission has been obtained.

The Coire Glas project has a web site.

This is the introductory paragraph.

Coire Glas is a hydro pumped storage scheme with a potential capacity of up to 1500MW. Coire Glas is an excellent pumped storage site with a large lower reservoir (Loch Lochy) and a significant elevation of more than 500m between the lower and the new upper reservoir site over a relatively short distance.

There is also an explanatory video.

This map was clipped from this SSE planning document.

Note.

  1. Loch Lochy in the Great Glen will be the lower reservoir.
  2. Loch Lochy is a freshwater loch, that is up to seventy metres deep.
  3. The top reservoir is formed by building a dam across the stream, that runs into the Northern end of Loch Lochy.
  4. The green line leading from the pentagon in the lake behind the dam towards Loch Lochy is the headrace tunnel.
  5. It leads to the brown rectangle, which is the underground power station.
  6. The blue line leading from the power station, where water is discharged into the loch.
  7. The two orange lines are access tunnels.
  8. The yellow line is the emergency access tunnel.

It is a standard layout for a pumped storage power station.

  • To store electricity, water is pumped from Loch Lochy and stored in the new lake.
  • To generate electricity, water runs down the headrace tunnel, through the turbines and then down the tailrace into Loch Lochy.
  • The power station would have a number of pump/turbines, that can do both tasks.

In addition, any water from rain or snow melt, that runs into the top lake gives low-cost extra electricity.

This layout of the dam and the upper lake was clipped from this SSE planning document.


It would be an impressive structure.

Could this pumped storage scheme give the UK energy security?

February 26, 2022 Posted by | Energy, Energy Storage | , , , , , , , | 1 Comment

Up To 24GW Of Long Duration Storage Needed For 2035 Net Zero Electricity System – Aurora

The title of this post, is the same as that of this article on Current News.

This the first three paragraphs.

Deploying large quantities of long duration electricity storage (LDES) could reduce system costs and reliance on gas, but greater policy support is needed to enable this, Aurora Energy Research has found.

In a new report, Aurora detailed how up to 24GW of LDES – defined as that with a duration of four hours or above – could be needed to effectively manage the intermittency of renewable generation in line with goals of operating a net zero electricity system by 2035. This is equivalent to eight times the current installed capacity.

Additionally, introducing large quantities of LDES in the UK could reduce system costs by £1.13 billion a year in 2035, cutting household bills by £26 – a hot topic with energy bills on the rise as a result of high wholesale power prices.

The report also says that long duration storage could cut carbon emissions by ten million tonnes of carbon dioxide per year.

I feel strongly, that this is a target we will achieve, given that there are at least four schemes under development or proposed in Scotland.

It certainly looks like the Scots will be OK, especially as there are other sites that could be developed according to SSE and Strathclyde University.

We probably need more interconnectors as I wrote about in New Electricity ‘Superhighways’ Needed To Cope With Surge In Wind Power.

There are also smaller long duration storage systems under development, that will help the situation in the generally flatter lands of England.

One of them; ReEnergise, even managed to sneak their advert into the article.

Their high density hydro could be a good way to store 100 MWh or so in the hills of England. As they could be designed to fit into and under the landscape, I doubt their schemes would cause the controversy of other schemes.

Conclusion

I think we’ll meet the energy storage target by a wide margin.

February 18, 2022 Posted by | Energy, Energy Storage | , , , , , , , , , | 1 Comment

A Brief History Of Scottish Hydropower

The title of this post, is the same as that of this page on the Drax Group web site.

This is the introductory paragraph.

Over the last century, Scottish hydro power has played a major part in the country’s energy make up. While today it might trail behind wind, solar and biomass as a source of renewable electricity in Great Britain, it played a vital role in connecting vast swathes of rural Scotland to the power grid – some of which had no electricity as late as the 1960s. And all by making use of two plentiful Scottish resources: water and mountains.

These are some points from the page.

  • The first scheme was built in the last years of the nineteenth century and provided power for aluminium smelting.
  • The first modern scheme was the Lanark Hydro Electric Scheme, which was built in the 1920s and is still running today, under the ownership of Drax Group.
  • In 1935, the Galloway scheme, set the tone for later projects with architecture including stylised dams and modernist turbine halls.
  • The North of Scotland Hydroelectric Board was founded in 1943.
  • Sloy, the largest conventional hydro-electric station opened in 1950 and has a capacity of 152.5 MW.
  • Building the dams and power stations appears to have been hard but well-paid work.
  • By the mid Sixties, the North of Scotland Hydroelectric Board had built 54 main power stations and 78 dams. Northern Scotland was now 90% connected to the national grid.
  • In 1965, the world’s then largest reversible pumped storage power station opened at Cruachan.
  • In 2009, the last major scheme at Glendoe opened.

The schemes are a working catalogue of everything you can do with water to generate and store electricity.

Future development now seems to be moving in two directions.

The Drax page says this about new hydro-electric schemes.

In recent years, however, the real growth has been in smaller hydro-electric schemes that may power just one or a handful of properties – with more than 100 MW of such generation capacity installed in the Highlands since 2006.

On the other hand, several large pumped storage schemes are under development.

Note.

These schemes add up to an output of just over 4 GW and a colossal 92.3 GWh of storage.

The existing Foyers scheme and the under-development Coire Glas and Red John schemes. all use Loch Ness as the lower reservoir.

Two of these under-development schemes will be larger than the current largest pumped storage system in the world; Bath County Pumped Storage Station in Virginia in the United States, which is a 3 GW/24 GWh system.

Conclusion

Adding large numbers of wind turbines and tens of GWs to Scotland’s existing pumped storage could transform not just Scotland’s but most of Western Europe’s green energy production.

 

February 14, 2022 Posted by | Energy, Energy Storage | , , , , , , , , | 11 Comments

SSE Renewables Launches 1.5GW Coire Glas Construction Tender

The title of this post, is the same as that of this article on renews.biz.

These are the first two paragraphs.

Hydro construction companies have been invited to submit tenders for construction of SSE Renewables’ proposed 1500MW pumped hydro storage scheme at Coire Glas, in Scotland.

Coire Glas, on the shores of Loch Lochy near Invergarry, would be the first large-scale pumped hydro storage scheme to be built in the United Kingdom for more than 30 years.

There appears to be global interest and six shortlisted bidders.

  • The ANDRITZ HYDRO and Voith Hydro partnership
  • The Bechtel, Acciona Construcción and Webuild S.p.A consortium
  • The BAM Nuttall, Eiffage Génie Civil and Marti Tunnel consortium
  • The Dragados and BeMo Tunnelling UK consortium
  • GE Hydro France
  • STRABAG UK

Bidders like these probably wouldn’t bother to get involved unless they knew that funding of the project was in place and it was pretty certain that the project will be constructed.

In World’s Largest Wind Farm Attracts Huge Backing From Insurance Giant, I talk about how Aviva are funding the Hornsea wind farm.

I believe, that insurance and pension companies like abrdn, Aviva and L & G could find a way of financing a scheme like Coire Glas.

Conclusion

It looks to me, that it’s almost certain that Scotland will get a 1.5GW/30 GWh pumped-storage system at Coire Glas.

Coire Glas could supply slightly more power than Sizewell B nuclear power station for twenty hours.

Now that’s what I call backup!

February 5, 2022 Posted by | Energy, Energy Storage, Finance | , , , , | 3 Comments

Power Storage Is The Next Big Net Zero Challenge

The title of this post, is the same as that of this Opinion from Bloomberg.

This is the sub-heading.

Britain’s pioneering plans for renewable energy show the global need could be massive. The means don’t yet exist.

The opinion is very much a well-written must-read.

One new project the article mentions is a 30 GWh pumped storage project at Coire Glas in the Scottish Highlands, that is planned by SSE.

I discuss this scheme in The Coire Glas Pumped Storage Scheme.

 

Bloomberg didn’t say it, but this pumped storage scheme could give the UK energy security.

February 4, 2022 Posted by | Energy, Energy Storage | , , , , , | 8 Comments