Download SE SIG Community Energy Systems Project

Smart Energy Special Interest Group
The Role of Community Energy Systems in the
UK Resilient Energy Supply
A Study by the Smart Energy Special Interest Group for the Technology
Strategy Board
April 2013
Rob Morland
Jenni McDonnell
Smart Energy SIG
Nee Joo Teh
Paul Huggett
Mike Perry
Eddie Townsend
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Smart Energy SIG
CES Project Background
• Planned as a follow-on to the SE SIG Community Energy Systems Fore
sighting Project
• Originally envisaged as two projects:


one focused on a technical assessment of CESs and potential alternative
business models,
a second concentrating on energy storage technologies, an environmental
analysis and alternative power sources for CESs
• With guidance from TSB a single initial Phase 1 study was scoped,
addressing issues of particular interest to the TSB
Smart Energy SIG
1
Available at: https://connect.innovateuk.org/c/document_library/get_file?uuid=532149cb-0c3c-43f1-9aec-ba67e0ac1c30&groupId=91689
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Smart Energy SIG
Scope of the Report
• Focus on community
elements and technology
opportunity
• National-level
generation and
distribution not covered
Challenge
Provision of a resilient UK, eco efficient and cost-effective
energy supply that will support long-term economic growth
Community Energy
Systems
Vehicles
+
National Grid
generation and distribution
• Initial look only at
business models
• Policy and planning
considerations also left
for later
Instruments
Technology
Enabling
components
CES generation
Business models
Policy /
planning
Interface and
connection
Smart Energy SIG
Types of CES
storage
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Smart Energy SIG
Potential Contribution of CESs
• Several interviewees in our CES Foresighting project suggested that CESs might
in time contribute 10-15% of final UK electricity generation:

what would this look like when built up from real household and community scale
systems?
• DECC’s chosen FIT scenario projects around 6TWh (1.6%) of final UK electricity
generation through FITs by 2020:

from around 750k installations, perhaps topping out at 800k by around 2025
• For 10-15% CES contribution we need 6-9 times the current FIT programme
• Simply scaling the current FIT programme with 4-6 million more individual
microgen installations would be challenging:




costs per install would grow as ‘low hanging fruit’ already picked with current
programme
building the necessary understanding with enough individual households could be
difficult
Smart Energy SIG
interfacing 5-7 million microgen
systems to the present grid may be impractical
such numbers of microgens could make a future Smart Grid more difficult to control
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Smart Energy SIG
Example Scenarios
• Four scenarios created:

these contribute from
1.6-15% of the UK’s
predicted 2030
generating capacity of
417TWh
• Achieving 10-15% will
require a ‘mixed’ CES
economy:



individual households
and community systems
opportunity for a variety
of sizes – street to city
including both
geographically-linked
and country wide
‘communities of
interest’
Installations
Scenario
Generation per
installation per
annum
Total
generation
per annum
Percentage of
UK total
generation in
2030
1
Baseline FIT CES
800,000 homes
8.1MWh
6.5TWh
1.6%
2
High-Growth
Single
Household
5.14 million homes
8.1MWh
41.7TWh
10%
3
High-Growth
Mixed
800,000 homes (FIT)
8.1MWh
6.5TWh
1.3 million new homes
8.1MWh
10.5TWh
1,320 CESs
21.8GWh
28.8TWh
45.8TWh
Total
4
MaximumGrowth High
Penetration
800,000 homes (FIT)
8.1MWh
6.5TWh
1.3 million new homes
8.1MWh
10.5TWh
1,320 CESs
21.8GWh
28.8TWh
2.1 million additional
8.1MWh
17TWh
Smart Energy SIGhomes
Total
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62.8TWh
11%
15%
Smart Energy SIG
Energy Storage Technologies
• Storage is key to stabilising
fluctuating supplies with
decentralised generation
Days
AE CAES
• Electrochemical offers the
best short-term solutions:

improved capacity and
lower cost are key to
viability for mass
deployment
• Absorption-enhanced
compressed air energy
storage (AE CAES) is an
example of a new
technology already being
deployed in the US
Lead acid
Batteries
Li Ion
Batteries
Hours
Flow Cells
Na S
Batteries
Liquid Air
Super
capacitor
Flywheel
Mins
Watts
Smart Energy SIG
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KWatts
MWatts
Source: EPRI
Smart Energy SIG
Technological Challenges in CESs
1. Power electronic
controllers
2. Solid state tap changers
3. Interconnection of
D-STATCOM devices
4. DC networks at LV, MV
and domestic levels
5. New fault current
limiters
6. Soft open point power
electronics
9. Solid state transformers
10. Inductive EV charging
12. New electricity storage
devices
Smart Energy SIG
13. Hydrogen production and
storage
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Smart Energy SIG
CES Business Models – Supply and Demand
• Energy system investment may be categorised as:


Supply side – creating new generating capacity
Demand side – reducing or changing the timing of energy consumption
• In most cases, supply side measures are more costly than demand side:


CESs provide an opportunity to increase supply and reduce demand
but at what cost?
• Work in Japan post-Fukushima suggests that central generation remains
more cost-effective than local generation:

but this may not be the case into the future, especially when other factors
(e.g. low-carbon generation, security of supply, etc) are included
• New business models need to be created that properly assess the costs
and benefits of CESs against alternative supply side and demand side
Smart Energy SIG
measures
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Smart Energy SIG
CES Business Models - Ownership
• CESs introduce the potential for new modes of commercial operation of
the UK’s energy system, and ownership of its assets
• Several ownership options exist, for example:




community owned
supplier owned
jointly owned
third party owned (e.g. a financial institution)
• Each option has benefits, but also challenges
• It is likely that a mixed economy where market forces stimulate
development of different models will be the best solution
• However, more work is needed to understand the costs and benefits of
different models, and theSmart
potential
Energy SIG implications of allowing a free
market to develop
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Smart Energy SIG
CES Business Models – Structural issues
• Widespread introduction of CESs (taking over 10-15% of UK electricity
generating capacity by 2030) will impact the current UK energy
generation and distribution industry:

it has been suggested that a 15% contribution of CESs could undermine the
commercial viability of some existing central generation and distribution
businesses
• Clearly a strong national grid is needed into the future:



for supply of large consumers (e.g. heavy industry)
to smooth peaks and troughs of intermittent CES generation (PV and wind)
to provide a ‘supply of last resort’ for all consumers
• Business models for CESs therefore need to build-in an appropriate
‘levy’ to ensure availability of the national grid service into the future:


this should not need to be more than the margin on carriage of energy lost
when CESs are deployed Smart Energy SIG
and it should be reduced by savings in grid reinforcement costs that CESs
may enable
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Smart Energy SIG
Study Conclusions
• It is possible to create plausible scenarios for CESs to deliver 10-15% of the UK’s
electricity generating capacity by 2030:

however, it is unclear what would be the optimum balance between domestic, small
community and large community CESs from technical, commercial and operational
viewpoints
• A number of technical challenges need to be resolved before large numbers of
CESs could be connected to the UK national grid:

significant increases in capacity and reductions in cost of CES storage technologies are
likely to be needed before mass deployment is viable
• Mass deployment of CESs will change the commercial balance of the existing UK
energy generation and distribution industry:

measures may be needed to ensure the long-term viability of the national grid
• There remains uncertainty regarding the economics of electricity generation in
many CESs when compared with a few large central generating stations:

however, the UK’s diversified
energy
structure could enable us to take a lead
Smart
Energyindustry
SIG
in innovative new approaches to design and deployment of CESs
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Smart Energy SIG