80. Professor Dieter Helm argued that security
of supply is a more complex matter than simply the issue of reliance
on energy imports (p 212).
81. Due to their nature most renewable technologies
are intermittent; they rely on the wind blowing, the sun shining,
the tide ebbing and so forth. This intermittency has the potential
to affect reliability of electricity supply. The electricity grid
operator needs to balance energy generation to meet energy demand
second by second. The UK transmission system operator (National
Grid) already has to make provision for demand prediction errors
and for unexpected faults with power stations and transmission
lines. This requires sophisticated processes that allow rapid
and cost effective responses to changes in demand or supply. However,
since renewable generation depends, in part, on factors beyond
human control, a new dimension of uncertainty is added to balancing
82. Witnesses were confident that intermittency
could be managed, although doing so will increase energy costs
(EDF p 197 and BERR Q 13). National Grid has calculated the additional
system balancing services they would require to manage 40% of
electricity from intermittent sources. They estimate that the
cost per unit of electricity supplied would be in the range 0.14p
to 0.28 p/kWh, or 1.6-3.2% of the average domestic bill. This
would increase the average domestic consumer bill of £390
per year by £6-£12 (p 64).
83. The Government cited UKERC research that
finds that intermittency is a manageable issue, but also noted
that additional research is needed on very large penetrations
of renewables (p 12). As part of the UK Renewable Energy
Strategy consultation the Government commissioned research into
renewables penetration from Sinclair Knight Merz (SKM).
The SKM research explores the measures needed to integrate up
to 50% of electricity from renewable sources, mostly wind power.
SKM find that costs increase with increased renewable generation
for a range of reasons associated with intermittency. These include
additional system balancing services and the need for conventional
reserve plant to ensure reliable operation (p 28, p 34, p 72
and pp 90-91). However, SKM do not report any insuperable problems
in managing intermittency with up to 50% of electricity from renewables.
84. The SKM report notes that it is possible
for supply to exceed demand on occasion when large amounts of
renewables are installed (p 64). For example, at some times
of the year a significant peak output from the Severn Barrage
would occur at night, when demand is low and the output from a
large capacity of wind could exceed demand on occasion. The Energy
Policy Group, Exeter University, cited examples of energy storage
technology being used to smooth variations in supply and demand
(p 41). Scottish and Southern Energy and the UK Business
Council for Sustainable Energy also saw a role for energy storage
(p 240 and p 258).
85. The UK Renewable Energy Strategy consultation
document highlights energy storage as useful technology to manage
the issues of intermittency, along with demand response, for example
through the use of smart meters. It states that the UK currently
uses pumped hydro systems (where excess power is used to pump
water up to a higher reservoir that can then be released to generate
electricity when demand increases). However, the consultation
notes that there is limited scope for new pumped hydro capacity
in the UK (p 216). Other storage technologies are still emerging
(BERR p 13).
86. One of the consequences of an increased use
of intermittent generation is that conventional generation will
need to be kept available to ensure demand is met even when renewable
sources are unable to generate (EDF p 198, Scottish and Southern
p 240). SKM estimate that around 15% of conventional capacity
could be replaced by wind power supplying 50% of electricity (p 27).
Nevertheless, renewable sources can save fuel and reduce imports.
The Commission estimated that, with the need for reserve capacity
taken into account, import dependency across the EU could be reduced
by 4-5% (Q 426). The UK Renewable Energy Strategy consultation
estimates that UK overall gas imports could be reduced by 12-16%
by 2020. For the electricity sector, SKM modelling indicates a
38% to 50% reduction in reliance on gas by 2020 (p 7).
87. We consider intermittency to be a manageable
problem but one that will increase costs to consumers. However,
the development of storage technologies and other options such
as demand-side management could help reduce costs and, by reducing
the need for reserve capacity, improve the economic and environmental
performance of renewable energy.