Comment: Grid balancing and storage are key to climate goals

Anders Lindberg, President, Wärtsilä Energy, explains why grid flexibility is vital for unlocking renewables capacity and getting on track with the Paris Agreement.

Adobe Stock

In 1896, Swedish scientist Svante Arrhenius first predicted that changes in atmospheric carbon levels could substantially alter the surface temperature of our planet through the greenhouse effect. Over 120 years later, carbon emissions continue to rise.

The urgency for action to meet our climate targets is unequivocal: we need carbon emissions to peak by 2025[1] and halve by the end of this decade.

A core solution requires a seismic change in the level of investment in renewables - up to USD 5.7 trillion per year by 2030[2] - in order to triple deployment of renewable energy and put us on course for the 1.5C Paris Agreement scenario.

But, to enable wind and solar to thrive, we need flexible energy systems that are reliable and affordable to enable us to harness as much of the clean, renewable power we generate in our future energy systems. We must act quickly to deliver this future.

Harnessing renewable energy

Since the industrial revolution, we have been reliant upon inflexible power plants to provide baseload power for our energy grids. These power systems now need to adapt, as renewable energy is expected to meet 35 per cent of global power generation by 2025.

This trend is driven by the fact that renewables are quickly becoming the cheapest form of new energy generation globally. However, simply investing trillions into wind and solar will waste energy and money if they are built into inflexible power systems.

Balancing the intermittent production of wind and solar power with inflexible baseload power plants, which cannot quickly ramp up and down to match the changing levels of renewable power, embeds instability and unreliability in our power grids.

This lack of flexibility leads to curtailment, which means switching off power generation sources when there is too much supply. As it is cheaper to turn off wind and solar plants instead of baseload plants, curtailment is not only financially costly, it is environmentally damaging too.

Our build out of renewables must therefore be combined with a substantial increase in flexible capacity, such as grid balancing engines and energy storage, which can quickly ramp up and down to support renewable power.

Our modelling of over 190 energy systems around the world found that in any country, the most cost-effective approach to reach 100 per cent renewable energy is to combine renewable power with flexibility in the form of grid balancing engines and energy storage.

Wärtsilä’s modelling has found that if Europe was to deliver up to 80 GW per year of renewable capacity, backed by flexible balancing technologies, we would see the renewable energy share in electricity generation increase from around 33 per cent today to over 60 per cent by 2030. This would have a direct impact on reducing electricity bills in the short and long term, by up to 10 per cent.

Future-proofing Europe’s power systems

Recent years have demonstrated that we cannot predict what’s around the corner. Therefore, policy makers must establish market conditions and policies to enable us to build flexibility into power systems today and ensure they’re adaptable for tomorrow.

To balance renewables, our grids need both energy storage and grid balancing power plants working together to cover sub-second, minute, daily and seasonal variations and ensure a steady supply of electricity when renewable output fluctuates.

As the net zero transition progresses, grid balancing engine technology can be converted to run on hydrogen and other sustainable fuels created using excess power from renewables during times of peak wind or sun. This creates a closed loop system and eliminates concerns about stranded generation assets.

Three principles for a flexible future

Based on our experience, expertise and modelling we have outlined three crucial principles for policy makers and the wider energy industry to follow when designing our future power systems.

Firstly, we need to ensure that we are choosing the right technologies. The build out of wind and solar power must be matched with flexible grid balancing engines and energy storage to ensure the optimal, lowest cost power mix.

Secondly, we must design our energy markets to support flexibility, creating capacity markets to ensure developers receive a return on their investment, even if a plant runs only intermittently to balance demand.

And finally, we should introduce shorter timeframes i.e., using 15- or even 5-minute time resolution in the power market trading instead of one hour to reduce the imbalance within the hour. This will also improve the overall planning of the power grid, make it more accurate and  require less reserves.

Delivering on these principles can be a recipe for success for future energy systems. But the window for meeting our Paris targets is closing and decision makers must act today to make every second count.

Anders Lindberg is President of Wärtsilä Energy