Renewable Energy usage jumped 32% year on year, but grid balancing costs soared

Renewable Energy Generation

Good for the fight against carbon

The rise in renewable generation has helped tackle the issue of carbon emissions and the latest figures show that as a result, carbon intensity fell to 153g/kWh over the second quarter of 2020. This is the lowest on record.

Wholesale energy prices also recorded a sharp decline after demand plummeted during the Covid-19 pandemic lockdown. Prices were shown to have dropped by 42% from the same period in 2019, however, with the UK economy beginning to reopen prices are beginning to recover. 

Rising costs?

It might be good news for the environmental side of things, but when it comes to expense not so much.

The cost to balance the grid soared to over £100 million per month as other sources were called upon to manage the low demand caused by the lockdown and the high generation created by the wind and solar energy sources.

The lockdown led to industry and business energy demand plummeting with overall demand falling to its lowest level this century. According to National Grid, the overall costs of balancing the grid came in at £718 million.

Technologies called upon to balance the grid were unable to provide all the services needed to balance the system.

 “It has been a challenging time for everyone in the country and for our power system. The last few months have underlined the importance of flexible, low carbon technologies to enable the UK’s power system to evolve and provide the secure and sustainable electricity supplies a zero-carbon economy needs,” said Mike Maudsley from Drax.

The cost of balancing the grid may be high but the cost of energy generation itself is predicted to tumble.

Revised forecasts from the Department for Business, Energy and Industrial Strategy forecast that solar installations will be delivered for £44 per megawatt-hours (MWh) by 2025, onshore wind for £46/MWh and offshore wind for £57/MWh.

Further Reading

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