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Posts Tagged ‘electricity market’

So, today’s ministerial statement from the Department of Energy and Climate Change (available here has confirmed that the subsidy available for onshore wind farms will drop by 10%.

Now, while I work in the wind industry, my expertise is on the measurement and analysis of the wind itself rather than the funding mechanisms used to support it. In their coverage, BBC News are grudgingly positive about this, and the tone of their article matches pretty closely my own appraisal of this. It is good that the funding has not been slashed 25% as was previously suggested as that would be a very steep climb in a very short time and such things tend to have strong impacts. I have far less concerns about a 90% subsidy.

The UK’s system for subsidising renewable electricity generation for large-scale projects is based on a ROC: a Renewables Obligations Certificate. This is an unusual scheme internationally, where the more common form is a simple feed-in tariff which pays a bit extra for every kilowatt hour from a particular source.

ROCs are distributed based on generated energy, and different sorts of generation earn different amounts; the amount of ROCs earned is loosely tied into how mature the technology is. The “renewable obligation” referred to in the title requires suppliers to generate a proportion of their electricity by means of renewables, a proportion which then increases year on year. Suppliers then have to present their ROCs as evidence that they have met their legal commitment. However, the certificates are not tied to the supplier themselves, but can be traded with other suppliers. While my understanding of the whole process is pretty sketchy it actually seems quite ingenious because of course from a government perspective they don’t care if individual suppliers meet an arbitrary percentage target: they care that the country as a whole meets that target.

Today’s announcement says that onshore wind will no longer earn one ROC but instead will earn 0.9 ROCs.

I first heard this suggested a few months ago, and I was rather surprised at the idea that the number of ROCs would drop below 1. (Which demonstrates my failing to pay attention as other technologies have earned less than 1 ROC per MWh before now.) After all, what is the certificate supposed to be saying? The whole point of the system was not so much to support emerging technology (although they worked that in), but rather to incentivise electricity suppliers to support the UK’s legally binding targets to reduce our CO2 emissions. I therefore assumed, wrongly as it turns out, that a non-thermal plant with no direct CO2 produced during operation would not earn less that one full certificate per megawatt hour, representing 100% renewable electricity.

The way the system is set up, there are knock-on effects from reducing the ROCs earned by onshore wind, above and beyond the financial implications (and my feeling is that the technology is now mature enough to weather this small loss of subsidy). Energy generated from onshore wind will now count less towards a supplier’s renewables obligation than their generated output would suggest. But the targets remain legally binding.

The reduction in subsidy is partially justified in the ministerial statement with the followeing text:

…delivering the best possible deal for consumers has been at the heart of the RO banding review. In considering the final shape of the banding package, we have focused on the need to balance cost-effectiveness with the range of objectives that the RO must deliver.

Any gap between current generation and the legal target, this year or in the years ahead as the target increases, will have to be met by some form of generation if we are to meet our legally binding targets. It may be more wind farms, or companies may risk more on offshore wind or emerging marine technology: all of which are more expensive than onshore wind and which will cost the consumer more in subsidies.

I think it is probably right, all in all, that the subsidy for onshore wind should decrease. I’m very interested to see how it plays out from here though.

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Wind farms are pretty different to prior large-scale generating technology. A big way that they’re different is that we, as users, can’t choose ourselves how much fuel they need to provide us with the energy we want to use; we simply have to accept as much of the available wind energy as we can.

For some this is an insurmountable problem with the very technology. If the energy isn’t there on tap you might as well pack up and go home. To me that seems crazy. If someone offered you a £20 voucher towards your weekly shop, you wouldn’t toss it in the bin on the grounds that it wouldn’t buy your whole week’s food, you’d use it and make up the rest other ways.

Because of this intermittency problem, jobs like mine became available for the wind industry. Across the globe, whereever there are wind farms of any size, someone has to sit down with a computer and some wind measurements and try to assess what sort of production levels we can expect from them. In the early days, this was done based on some comparatively short measurement masts, using methods that were simplistic. Now, it’s a much better defined methodology, with larger masts, new technologies, and its own modelling tools to provide more accurate predictions of how the wind will vary in time and space.

The same sort of analysis techniques are used by the Energy Traders, who sell the generated energy under the system of the UK electricity market. Similarly, analysis of operational wind farms really benefits from that sort of detailed knowledge of the wind because it’s still key to understanding how far the wind farm is performing as expected.

So there are lots of benefits to the wind industry from this sort of work then. (Might be worth mentioning that these sorts of jobs are high skill, high demand and generally filled by people who live and work in the country in question.)

Even the most strident wind power advocate, though, doesn’t foresee a time when 100% of an electrical grid’s supply comes from wind power; not unless there’s a major leap forward in electricity storage. It is likely that other technologies like wave and tidal will start to mature to large-scale deployment.

When they do, those renewable resources will also need their resource assessed. And very similar techniques will be involved: make some measurements, assess their quality and representativeness, model where you have no measurements, and then feed through information about your machine and its output.

The national grid that was originally conceived to carry electricity from large-scale power plants to every home, factory and office was an astounding feat of engineering. However it was designed to match the supply to demand. The requirements of matching a variable supply with a variable demand are relatively new. Because wind power is the first renewable technology to get a substantial penetration into the generation market, the grid is learning to be more flexible. As we begin to use other renewable technologies — and we will — those lessons will transfer and we’ll have a system that can cope with the demands we ask of it.

Wind energy doesn’t have to be 100% of the answer to be a very important part of today’s and tomorrow’s technology mix.

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