A Twitter user asked an excellent question recently about the distinction between grid balancing and energy storage.
https://twitter.com/RegannotC/status/1687387644919980032
Yes, it is about short and long term storage but, like most things to do with energy supply, such an apparently simple question requires a fairly complex answer to even scratch the surface of the issues involved.
An electricity system needs to be ‘balanced’ at all times, i.e. supply and demand need to be exactly matched. Any generation deficit (surplus of demand over supply) will result in ‘load shedding’, initially by voltage reduction (‘brownouts’) and ultimately by widespread disconnections (‘blackouts’).
To date, the vast majority of effort and the provision of mechanisms for balancing energy systems has concentrated on the supply side of the equation, but this is changing - fast! Many climate alarmist activists and charlatans who have infiltrated the UK energy industry and ‘advisory groups’ in recent years are increasingly and openly championing ‘demand side management’, DSM, or ‘demand side response’, DSR, mechanisms (otherwise known in the real world as energy rationing) as a critical tool for grid balancing. More on that in a moment, but let’s look at the supply side first.
Forecasting energy requirements is much like - and very much correlated to - forecasting the weather; it is easy to make broad brush forecasts months or years in advance (January will be cold in the northern hemisphere, July will be warm), but detailed forecasts become ever more refined as specific dates approach in real time.
So even in early August 2023, a reasonably confident forecast for overall electricity demand in January 2024, or even January 2025 is possible. If you are a retail supplier of electricity, it is in your interests to secure most of the energy you’ll need from the wholesale markets well ahead of time - just as any responsible retailer in any other consumer industry would do. A supermarket chain not wanting to run out of milk or eggs for example puts in place long term contracts with suppliers to ensure both continuity of supply and reasonable price stability.
So it is with electricity - at least in a wholesale market where supply is predictable. Responsible suppliers will forward purchase most of the electricity they need in the wholesale markets, fine tuning their market positions as delivery approaches. The wholesale market is appropriately structured to reflect this reality - power is traded in long-term (e.g. monthly) packages for delivery periods far into the future, and half-hourly packages for periods a few days ahead.
The high-profile collapse of a number of retail energy suppliers over the past couple of years was precisely because they failed to ‘hedge’ their wholesale market positions to match their expected retail commitments. When short-term wholesale prices exploded, they were fully exposed to the risks they’d recklessly ignored (while the energy regulator, Ofgem, was asleep at the wheel as usual). Incidentally, the full costs of transferring the customers otherwise ‘stranded’ with failed suppliers has been distributed across the industry with additions to standing charges, which is why this component of your bill has increased so dramatically of late.
So far, so good. If electricity supply can be reliably forecast to match accurate demand forecasts, balancing risks can be effectively managed; only a tiny fraction of volume needs to be traded in short-term markets to fine-tune things as delivery approaches. With reliable nuclear and dispatchable power generation (coal, gas, biomass, reservoir-fed hydro), this is indeed the case. Traditionally, real-time, minor adjustments on the supply side were provided mainly by ‘spinning reserve’ (coal and gas generating units warmed up and running at no load) and pumped hydro storage schemes.
The problem, as everyone knows by now, is with intermittent wind and solar. When these sources of generation start to become dominant, as is increasingly happening in the UK, short-term market mechanisms, including real-time grid balancing requirements, become a much more significant, and costly, factor. Of course, they also provide significant opportunities for ‘savvy’ and/or ruthless market participants to make quite a lot of money!
Individual suppliers, energy traders, and power generators manage their market positions to maximise their own potential profits while minimising their risks. These individual market participants are exposed to the shortcomings of the market posed by inherently unpredictable wind and solar generation in the relatively short-term (days to a week or two ahead), but overall responsibility for balancing the grid in real time (‘today’) falls to the National Grid Electricity System Operator, ESO.
With the increasing fragmentation of the industry over recent years and decades, the ESO contracts with various suppliers for balancing short term operating reserve, ‘STOR’, services to manage the system, whereby providers commit to providing short-term power on demand, e.g. 50 MW for 1 hour, at 20 minutes notice. Anyone can bid to provide these services, from any source they choose to develop, including gas or diesel generation, stored hydro power, cryogenic air systems, hydrogen generation and, yes, batteries if they so desire.
So batteries can provide general STOR services to the ESO, for minutes or hours. Because they can respond ‘instantaneously’ batteries are particularly useful in providing frequency response services - ultra-short-term, extremely fast response bursts of energy to maintain grid stability, e.g. following the unplanned loss of a generating station or transmission line following a fault.
What batteries cannot meaningfully do is contribute to balancing the short-term, but non-real-time market - further than the ‘day-ahead’ responsibilities of the ESO, but within a few days to a week or so of delivery. Suppliers seeking to refine their market positions during or ahead of an extended wind drought depend on long-term thermal generation - e.g. from gas ‘backup’ plants or biomass - or from other yet to be matured alternatives such as hydrogen or cryogenic air storage. This is the fundamental dishonesty of claims that batteries can provide backup for intermittent renewables.
So that’s the immediate, if somewhat long-winded, answer to my Twitter friend’s question. Before ending, back briefly to DSM / DSR.
To do the demand side issues justice would require a substantial article in its own right, far longer that the supply side discussion above. The bottom line though is that the industry itself realises that supply side mechanisms - which it is constantly refining to meet the evolving challenges* - will be inadequate to balance the system in a ‘fully decarbonised grid’, let alone a full Net Zero scenario where all existing natural gas and petroleum demand is transferred to ‘green renewable’ electricity.
* “System conditions are changing … in their current form, our existing capabilities will not be able to meet all future challenges. Additional investment is required to develop new capabilities that can meet changing requirements. We are modernising and transforming our balancing capabilities and associated platforms. This will ensure that we have the vital flexibility to facilitate future changes, both expected and emerging, across the industry.”
Quotations from ESO Web Site (www.nationalgrideso.com)
Demand curtailment has traditionally applied primarily to large industrial users of power, who are reimbursed to drop demand on request in times of tight supply. Last winter however, the ESO introduced the Demand Flexibility Service, DFS, whereby residential consumers with Smart Meters are rewarded for reducing electricity use at peak times.
It is early days in terms of market wide demand management, but there is a very obvious implication that, in order to incentivise people to adopt the ‘service’, the benefits (cost savings) will need to heavily outweigh the disadvantages of adjusting the use of home heating, cooking, household appliances and such. You can be sure that residential demand management will not remain ‘optional’ for long; time of day tariffs will likely be mandated very soon, so that use of electricity at peak times becomes (even more) prohibitively expensive.
Furthermore, as Net Zero progresses, effective demand management (price controlled rationing) would have to be localised, to take account not just of generation capacity but also the loading conditions on your local mains network (e.g. neighbours charging their electric cars or operating their heat pumps). Proponents of a ‘Smart Grid’ claim such mechanisms are possible, but the truth is we are probably decades away from having the IT systems and data management capabilities to achieve such a system. At this stage it is, like everything else the disingenuous advocates of Net Zero claim; unicorn dust.
In summary, Net Zero is not possible. In theory, it would cost £ Trillions but in reality no one knows how to do it in practice, let alone having a ready-made detailed plan ready to implement today. The people claiming it is possible, and can be done by 2050, are nothing but grifters and charlatans.