Bruce Woodman on overcoming intermittency in renewables for long-term, low-cost energy
The impact of intermittency in renewable electricity generation should not be a showstopper for businesses looking to generate renewable power for their own use. Are renewables as intermittent as they are made out, and how can businesses alleviate investment anxiety when looking to take control of their long-term energy costs?
The intermittent nature of variable renewable energy sources is a fact. The sun doesn’t always shine, and the wind doesn’t always blow. While this is sometimes used as an argument against renewables, or to express concern about potential supply disruption, intermittency does not need to have the impact that people might think.
At grid-level, addressing the challenges of integrating higher proportions of variable renewable energy has driven the development of several technological solutions to maintain a balanced grid. Last year low-carbon sources accounted for 56% of the country’s total electricity consumed, made up of renewables (43%) and nuclear (13%). Carbon Brief published that the share of electricity generated in Great Britain from burning coal and gas fell to a record low of 2.4% for an hour at lunchtime on Monday 15 April. In 2024, we have already seen a record 75 half-hour periods when fossil fuels have met less than 5% of demand, compared to 16 in 2023 and five in 2022.
It is important that existing grid connections for businesses generating their own renewable power remain unchanged. For business-scale, user-owned renewable power generation, adding renewable energy plant ‘behind the meter’ will supply on-site demand first and feed into the grid when there is surplus. When there is a shortfall in wind or solar supply, the site continues to be supplied from the grid. Getting the balance of installed renewable energy right can allow a high proportion of grid electricity to be replaced with completely clean renewable electricity. Adding battery storage will increase that proportion still further. With modern direct boilers, renewable electricity can also directly displace gas for space heating or process heat.
The rise and rise of user-owned power generation
The appetite for user-owned or in-house power generation among businesses is growing. This is essentially a way of generating energy from renewable sources – usually wind and solar – on or near to the facility that will use it. That might be an out-of-town office for an insurance company, a business park, or a factory or processing plant – anywhere that needs a certain baseload of power.
Ideally the renewable asset, such as a solar installation and/or wind turbine, is in relatively close proximity to the business premises, either on-site or within 2 to 10km, so that a dedicated cable brings the power directly to the buildings using it. If there is no suitable location nearby, power can be generated some distance away and transported, or ‘sleeved’ to the facility through transmission and distribution networks to supply yourself under a self-consumption power purchase agreement (PPA).
There are considerable financial, technical and commercial benefits for businesses who opt to use renewable sources to generate energy for their own use. Bringing energy production and management in-house offers energy security; protecting a business from short-term price volatility and long-term price rises. It may be self-evident, but as there are no fuel costs for wind and solar power, the ability to control and accurately forecast energy costs over a period of 20+ years can significantly boost a business’s long-term profits and shareholder value.
Developing renewable assets accelerates corporate net-zero ambitions. It enables a business to have ownership and control of the full energy lifecycle, from generation to storage and usage and associated emissions reductions.
These are compelling reasons why organisations are moving towards more user-owned or in-house energy production. It would be wrong to say that they are going ‘off-grid,’ however. A grid connection is still important for a couple of reasons. First, to provide back-up in case there is a major shortfall in the availability of supply from in-house resources and, secondly, through offtake contracts to export excessive supply of non-dispatchable power – on a particularly windy day, for example.
Intermittent does not mean unpredictable
There is a difference between intermittent and unpredictable. While wind and solar are intermittent, their short-term output and annual average over the next 25 or more years can be very accurately predicted. Of course, there are variations year to year, but they are not huge.
Understanding how the weather behaves at a certain location is a key part in almost all decisions about renewable energy. There are many data sources that can be used first to help determine potential power generation from a particular site and, secondly, to predict or forecast the amount of energy that could be provided over both the long-term (seasons, years and decades) and the short-term (daily and even hourly).
By looking at past weather behaviour, it is possible to model likely future weather patterns. The introduction of long-term global reanalysis data-sets like NASA’s Modern-Era Retrospective analysis for Research and Applications (MERRA) provides a whole world picture of climate performance going back over 20 years. That data can be used to predict future weather conditions and trends for the 20- or 30-year life of a renewable energy project at a high resolution.
Smoothing intermittency with a right-sized renewables mix
If a site can host a mix of renewable energy production, intermittency can be smoothed, and its impact reduced. Solar and wind are complementary. Solar PV production is strong in the summer while there is less produced from wind. With the opposite happening in winter months.
By over-sizing its renewable production capability, a business can decrease still further its dependency on grid electricity and gas. A business consuming, say, a 1MW baseload power and heat at a factory or large out of town office would build a renewable energy production facility of more megawatts than it consumes. For as much of the year as possible, it would be supplying its own demand and returning the rest to the grid under a PPA, or supplying another of the company’s premises under a PPA.
Using storage technologies can further smooth intermittency through battery electric storage systems (BESS) and other technologies such as heat batteries and hydrogen, which can be stored and used for heat, transport fuels and even electricity production if necessary.
Ownership provides control
As we have experienced over the past few years, power prices are driven by international events and global markets. This leads to huge volatility in pricing. Predicting and budgeting for electricity, heat and transport costs into the future is a major concern for companies. Anything that can increase the predictability of costs helps the business budget its investment in future growth, production improvements and in renewable energy.
Wind and solar projects use natural energy, so there are no fuel costs. The recurring annual costs for land rental, insurance, operations and maintenance are all contracted up front and so are predictable. The capital cost of the renewable energy project can be forward-fixed over many years with a structured loan.
Because the costs are contracted, over the course of any financial year they are highly predictable. If output drops in a poor year, the cost of each unit of electricity generated will increase by a small amount. Similarly in a good year, the cost drops, again by a small amount.
Predictable, low cost and low carbon
The impact of intermittency is often exaggerated and should not be used to hold back investment in in-house renewable energy. The intermittent nature of wind and solar is easy to overcome by over-sizing renewable generation and using storage, while always maintaining grid connection for back-up and exports.
Power from wind and solar is the lowest-cost, lowest-emission-generating energy option available to businesses. It provides the most predictable cost over the near, medium and long term as all of its costs can be contracted and controlled, to alleviate investment anxiety for businesses that want to reduce their carbon footprint significantly. The output from renewables can be used for power, heat and transport.
Owning the means of energy production gives companies control over their energy supply, security and costs: boosting profits, providing essential energy security, and having a genuine plan to deliver on net-zero goals.
Bruce Woodman is managing director of Pure Energy Professionals (PEP)
