Fuel prices going up, green energy getting cheap: now it’s time for a flexible energy grid
The ongoing gas crisis has highlighted that our current energy system is unsustainable. As fuel prices have tripled in a year, our dependence on it seems more and more risky. It has also become clear that the unhappy history of geopolitics and fossil fuels – brought home by Putin withholding gas supplies into Europe over the summer – will likely endure.
With around 40 per cent of the UK’s electricity generated from natural gas, price hikes are already affecting the power industry and consumer costs. It’s against this backdrop that the PM has announced all electricity in the UK will be clean from 2035. This should reduce our dependence on volatile gas prices.
Other major economies, like the US and Canada, are already committed to zero carbon power by 2035. The direction of travel has been apparent for some time as renewables have grown ever cheaper. The costs of offshore wind in the UK, for example, have fallen by two-thirds in five years to £40/MWh, whereas gas has remained stifled and is expected to cost £85/MWh out to 2025.
Of course, there will be those who argue that the “intermittency” of renewables will cause blackouts. There is definitely more to do to make our power system more dynamic, but these commentators may have neglected to notice National Grid’s promise to be able to run a net zero power system in 2025, a full decade ahead of the government’s new target. Some may wonder what the hold-up is.
With a flexible grid in place, moving to renewables gives us greater security of supply. We will rely on homegrown energy – sustained by offshore communities in Northern coastal towns – rather than on fossil fuels pumped in from abroad.
So, what do we do about less windy or sunny days? Energy efficiency on an industrial scale can build up our resilience to fluctuating supply, helping us to use less and pay for less. Indeed, the ECIU’s own analysis shows that families could save up to £246 a year on current gas bills through energy efficiency upgrades. Shifting electricity demand away from peak times, as is practiced in the US, plays a role while cutting overall energy costs.
In the same vein, smart charging of electric vehicles, borrowing energy from their batteries at peak times, limits pressure on the grid. With EV sales in September 2021 almost matching sales in the whole of 2019, capacity is only set to grow. These batteries and smart technologies can turn household items into mini storage and flexibility facilities, freeing up or feeding back electricity to the grid.
Nuclear might provide some baseload, but it is expensive and can be relatively inflexible as it is very costly to turn off and on. Other novel technology like hydrogen power plants may also come online. But focussing on the low-hanging fruit like energy efficiency can have an impact starting today.
Crucially, the diplomatic power created by committing to zero carbon electricity by 2035 cannot be underestimated. Alongside G7 counterparts like the US and Canada, the world is moving inexorably towards greener power. Expect to see others follow the UK’s lead; with the world present in Glasgow for COP26, this pledge will not go unnoticed.