This study has:
- Developed three different Scenarios showing different ways in which electricity generation in Scotland could evolve in the next 20 years.
- Elaborated the impact of two of the Scenarios on electricity flows to and from Scotland.
- Established the level of energy storage that would be required in 2020 and in 2030.
- Reviewed a range of energy storage and energy management technologies.
- Assessed these technologies against the needs shown by two of the Scenarios.
- Considered the regulatory, economic, supply chain and development constraints for the key energy storage options.
From this the following conclusions are drawn:
8.1 Scenario 1
Scenario 1 represents comfortable achievement of the current Scottish Government renewable targets. This has renewable generation as 80% of gross consumption in 2020 and the percentage of renewable capacity as 61% by 2020 and 76% by 2030. In this Scenario total Scottish generating capacity rises markedly, increasing from around 12 GW today to 17 GW by 2020 and close to 18 GW by 2030. The results for Scenario 1 suggest if the planned interconnector upgrades take place then the additional power generated can be accommodated by increasing exports to England. As a consequence there is little additional need for energy storage under this situation.
8.2 Scenario 2
Scenario 2 represents a more ambitious growth target for renewables. The level of renewable generation capacity reaches 70% by 2020 and 83% in 2030. This represents an increase in installed capacity from 12 GW to 21.5 GW by 2020. The increase in capacity over the period to 2020 is driven by renewables - with over 12 GW of wind, 700 MW of marine and 400 MW of biomass capacity installed by 2020. By 2030 offshore wind increases to 11.2 GW, onshore to 6.5 GW, biomass to 600 MW and marine to 1.3 GW. In terms of Scottish generation output the percentage contribution from renewables to Scottish demand rises from 27% in 2008 to 120% and then 158% in 2020 and 2030 respectively.
The modelling work found that with high growth of intermittent renewables as described under Scenario 2 energy storage will be required from 2020 onwards. By 2030 under this Scenario there is a maximum power flow of 13 GW with an excess of approximately 5 GW even following upgrades to the interconnectors between Scotland and England. If no constraints are applied on top of the interconnectors then generation will need to be constrained 28% of the time. Under this situation energy storage and demand side management is required to avoid substantial constraining costs being incurred.
An important outcome from the modelling is that the role of interconnections to England. With increasing levels of intermittent generation on the network new interconnectors are required to transfer excess generation a large proportion of the time. This finding aligns with recent work by the ENSG.
8.3 Scenario 3
Scenario 3 was developed to show extreme renewables growth. This scenario shows an increase in capacity from 12 GW to 25.5. GW by 2020, increasing to 29 GW by 2030. A large proportion of this increase (15 GW) is driven by an increase in offshore wind capacity. The results show that total Scottish generation output increases to 84 TWh in 2020 and 91 TWh by 2030 compared to current output of around 48 TWh.
Scottish generation output becomes dominated by renewables. By 2020 73% of Scottish generation output is renewable, rising to 88% by 2030, with the majority of renewable output from intermittent sources of generation. In terms of the target of meeting 50 per cent of Scotland's electricity demand from renewables, this is achieved in 2015. By 2020 Scotland is producing electricity considerably in excess of demand. This Scenario shows the outcomes that could occur if all existing plans for generation were realised plus a number of additional developments that could follow on from the recent licensing activity.
8.4 Suitable Energy Storage
The technology review found that pumped hydro is the most suitable energy storage option available to Scotland, particularly when considering the scale of the storage challenge required in Scenario 2. Assuming that storage is designed to keep flows within the boundary transmission capacity (7.8 GW). Installing 7 GW of storage with 10 hours of storage capacity then the time period in which generation output needs to be constrained is reduced from 30% to 10%. This highlights the trade off in the cost of additional storage and the cost to constrain generators whether these be renewable wind or thermal generation.
To meet the required amount amounts of storage under Scenario 2 in 2030 would require eighteen 400 MW pumped hydro plants. This is five times the current capacity of natural hydro of 1,340 MW.
Pumped hydro was identified as the only viable large scale storage solution, this matches the trends found in other European countries such as Spain and Portugal looking to accommodate increasing levels of intermittent generation. The only other large scale energy storage option is CAES, Scotland does not have the ideal geology for this technology. However given environmental constraints upon pumped hydro there may be merits to exploring the options for using disused coal mines as storage caverns for CAES.
The economic appraisal of energy storage is challenging as limited data exists. The high level economic analysis undertaken as part of this study found that
- The costs of constraining renewable generation is less than the cost of installing pumped storage.
- Capital costs for installing further interconnections to England appear lower than installing the equivalent volume of energy storage.
Therefore there is no real need to provide financial incentives for large scale energy storage. The Scottish Government should however consider the benefits of energy storage and consider the following to facilitate their operation:
- Market/regulatory changes are needed so that storage devices can function on a level playing field - for example addressing restrictions on network company's operation of generation and easily access different revenue streams that cross the boundaries of generation and distribution companies.
The small decentralised scale energy storage should also be considered because of the many different revenue streams that currently provide benefits to different sections of the market structure:
- Voltage fluctuation regulation
- Avoiding or deferring the need for line upgrades
- Potential black start capability, depending upon size
- Arbitrage trading
At present few storage technologies are economic, this was highlighted by the US DoE study. The Scottish Government should look to see what opportunities exist such as the Low Carbon Network Fund for engaging with electricity suppliers to trial battery technologies in remoter parts of the Scottish grid.
The future electricity market is likely to alter the present day economics with increasing volatility influencing pricing and potential regulatory changes facilitating the sector. It should be noted that this study has not considered the possible value (direct and indirect) of increased GHG savings from pumped storage replacing spinning reserve capacity and the increase in energy security that this would also bring.
Finally, smart grids they are likely to have an important role in assisting the grid to deal with increasing variation in output and enable demand side management technologies. Two key demand side management areas will be growth in the numbers of electric vehicles and growth in electric heating as these will both reduce the storage requirement. These both represent options to reduce/utilise excess generation should a more ambitious renewable energy target be developed in the future.
8.5 Future steps
The modelling work has identified some important initial conclusions. Scenario 1 and 2 demonstrated that in the future Scotland will require capacity for higher power flows to UK through the planned interconnectors.
In Scenario 2 the planned interconnector capacity will not be sufficient to carry all of the generation output. Analysis of the pumped storage needed shows large numbers of large pumped storage schemes would be needed. The annual cost of a typical pumped storage scheme would be slightly higher than the cost of constraining the generation off. Hence pumped storage will be a part solution is levels of generation reach the Scenario 2 levels.
If the levels of greater renewable generation suggested by Scenario 2 were to be accommodated, several solutions will need more detailed investigation. These include:
1. A more detailed understanding of how the need for storage and the discharge of storage will work on an hour by hour basis. This will require more detailed modelling and analysis to understand the characteristics of the peak flows (i.e. the number of peaks their size, duration and intervals).
2. The potential for lower cost pumped storage - through site selection or engineering design.
3. Site specific estimates of pumped storage capacity and costs for potential locations in Scotland.
4. The costs of additional interconnection vs. the costs of the range of pumped storage schemes from 1) 2) and 3).
5. The impact of DSM technologies
The second area of focus is to understand the support needed for the smaller decentralised storage technologies. As highlighted the revenues streams are less certain for the small scale distributed storage solutions. Hence some form of greater certainty in income is require to bring forward demonstration and then commercial deployment of these technologies. Providing economic intervention to these technologies will allow a analysis of the potential benefits and help inform the future evidence base for this sector. In addition, showing leadership and incentives to develop these technologies in Scotland will generate a large market for technology development which in turn could lead to job creation.