How do we build flexibility into our future energy markets?

The days are getting longer as we get ready for summer but our MSc students’ time with us is only getting shorter. They’re all starting to knuckle down and get stuck into their independent research project. Clemens Tepel, from Germany, is one of them. He is investigating, in conjunction with one of our industry connections Baringa Partners, how we can keep the lights on as we move to increasingly intermittent power markets.

The UK has committed to reduce CO2 emissions to 20% of 1990 levels by 2050. One of its key ways of doing this is increasing its share of variable renewable energy (VRE). This increase in VRE is combined with a decrease in firm and dispatchable coal-fired power generation due to the EU’s Large Combustion Plant Directive and its successor the Industrial Emissions Directive.

The resulting capacity substitution increases the need for technologies providing flexibility to the GB power market in the future in order to maintain security of supply and system stability. In my thesis I will address this flexibility challenge by looking at:

  • Flexibility requirements
  • Technologies to provide flexibility
  • Power market designs and policy measures

My project is supervised by Professor Tim Green from the Department of Electrical and Electronic Engineering alongside Eamonn Boland and Debbie Buckley. Both Eamonn and Debbie are alumni of Energy Futures Lab’s Sustainable Energy Futures course and now work at Baringa Partners, an award winning management consultancy with deep sector expertise in power markets and the provision of flexibility. This cooperation will enable me to look at the problem from an academic perspective as well as an industry perspective.

Flexibility requirements

The first part of my work will be to estimate the amount of flexibility that is required now and in 2030 in the GB power market. Great Britain is a particularly interesting case study as it is an island market with a high penetration of VRE. I will tackle the high uncertainty of estimates spanning more than a decade into the future using a scenario-based approach. That means I will investigate different future scenarios to explore a range of possibilities for the level of response required in different time frames before and after delivery of electricity.

The GB System Operator National Grid (2015) conducted a similar analysis in their System Operability Framework and showed that the required operating reserve capacity will increase by 200 – 300 % until 2030 depending on the scenario. This forecast indicates the magnitude of the flexibility challenge and shows that swift action is required.

Technologies to provide flexibility

The second part of my work will look at technologies that can be used to provide the required flexibility. These technologies can be separated into four groups: energy storage, demand side response, interconnectors and flexible generation.

Traditionally, flexible generation assets such as gas turbines and coal power plants in combination with pumped hydro energy storage were mainly used to provide the required flexibility. However, more recently other technologies such as demand side response, interconnection and non-conventional forms of energy storage have caught a lot of attention since they might be able to provide flexibility at very low cost and/or with very fast response times compared to current methods. In the long term, VRE might contribute to flexibility provision itself through running part-loaded or in the case of wind turbines through using the kinetic energy stored in the rotating blade.

However, all these technologies have their pros and cons and there is not one single ideal technology. Therefore, the second part of my work will investigate the lowest cost combination of these technologies to provide the required flexibility.

Power market designs and policy measures

Wind TurbineThis variety of technologies combined with uncertainties related to technology development, electricity mix and demand profiles will make it very challenging to find the optimal technology mix. Therefore, many scholars suggest a so-called “level-playing-field” approach as the appropriate power market design. This approach means setting up the market in a way that it does not discriminate or favour a certain technology by basing it on objective criteria such as ramp-up capability, response time and cost. By doing so, the market should figure out the optimum solution on its own.

The final part of my thesis will look at how this “level-playing-field” market could best be set up. I hope to help answer how flexibility can be turned into a tradeable good and what kind of measures are needed to compensate for the different technology maturity levels.

I believe solving this problem is a great opportunity for GB because larger electricity systems such as the US and mainland Europe will encounter the same flexibility challenge 5 to 10 years later than GB due to their higher inherent resilience. That means, if GB is able to find convincing solutions to this challenge, it has the chance to become a global leader in this industry and benefit from its know-how in the future.

Clemens’ research will run from now until the end of September, if you have any queries you can contact him via email.

Clemens Tepel

ClemensTepelDuring his undergraduate degree in Mechanical Engineering in Stuttgart, Germany, Clemens gained considerable practical experience in the automotive industry through internships at Daimler AG (Mercedes-Benz) in Germany and China. Furthermore, he spent a semester at UC Santa Barbara, where he attended classes on energy, which strengthened his great interest in sustainability and climate change. In order to pursue this passion, he joined Energy Futures Lab’s MSc in Sustainable Energy Futures, where he focuses on energy storage and other technologies to provide flexibility in the power market. After the MSc, he aims to contribute to society by working in the sustainable energy space, either as a consultant or in a start-up.

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