Energy crisis has led UK to 'foothills of recession' says expert
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Britain is currently grappling with the effects of a global fossil fuel energy crisis, as the cost of wholesale gas skyrockets, causing household electricity and gas bills to reach record levels. In April, Ofgem raised the price cap for millions of household energy bills by a massive 54 percent to reach £1,971 a year. While Prime Minister Boris Johnson’s Government is taking significant steps to end the energy crisis, through a heavy focus on homegrown renewable energy, experts argue that the country is lacking critical infrastructure that is forcing the National Grid to pay wind farms to stop generating electricity at certain times of the day.
Speaking to Express.co.uk, Andy Willis, the CEO of Kona Energy, warned that the UK is throwing away a golden opportunity at a time when household energy bills have reached record highs.
Kona Energy is a British firm that is focused on developing grid-scale battery energy storage projects.
Mr Willis explained that while the UK is pushing ahead quite strongly on the development of renewable energy like offshore wind, “a lot of this wind, both onshore and offshore, is connected to quite remote places on the network where it’s quite windy”.
These are normally places which are located at the edges of the country where there are higher wind speeds.
Mr Willis said: “These locations aren’t that close to major demand centres, where all the power is actually consumed, like say London or Birmingham.
“What happens is that the energy is produced in these locations, and then it gets transported through the wires of the national grid network down to these demand centres like London or Manchester.
“While there has been a huge buildout of wind projects, what happens is that during times of day when it’s incredibly windy, the national network can’t actually take that volume of power.”
The energy expert added that at the moment, Britain does not have the capacity to transport or store large supplies of energy.
This means that on days when it’s very windy, “these wind farms have to be turned off because the Grid can’t host the volume of energy”.
Mr Willis claimed that the reason these wind farms are getting paid to not generate electricity is market-focused
He continued: “A lot of these existing wind assets are subsidised which means that they will get a set price for each MWh of energy they produce.
“That’s determined by the National Grid or the Government based on the contracts, meaning regardless of what kind of day it is they get paid that same price to produce that unit of energy.
“At times when the wind farms have to be turned off, they say to the National Grid ‘look guys, we built our windfarm in a windy location. It’s your fault that you don’t have the network installed to transfer our energy from A to B’.
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“So you still have to pay them for that same subsidy price even though they’re not using that energy- that’s what building to these very high constraint costs.”
According to a recent tweet from Kona Energy, on the 12th of May, the National Grid paid £6,124,104 to electricity generators like wind farms to reduce their energy output and for expensive power plants to replace this constrained energy elsewhere.
Mr Willis added: “We’re looking at about a billion pounds a year at the moment to turn off wind farms across the UK, and that’s only going to rise.
“I think by 2025 or so, we’re looking at about 2.5 billion pounds a year, which is obviously a pretty phenomenal amount of money and ultimately clean energy that’s being wasted as well.
“The Government has made a lot of general comments about how the batteries can manage and increase the efficiency of the system, but they’ve not put in place any concrete policies to get batteries to manage those constraints.
“That’s why the cost will only continue to increase. “
Mr Willis noted that despite all the major policy announcements highlighted in the Government’s Energy Security Strategy, “they’ve not given any indication of how we’re going to get there, so it’s a lot of classic grandiose policy announcements with nothing to substantiate them.”
He added that the long term solution to this crisis is to rapidly build critical infrastructure like pylons that connect remote areas of the grid to areas of high demand, like London.
However, these schemes are expensive and often take years to plan and construct.
He said: “What we’re trying to do at Kona Energy is basically develop large scale battery storage facilities at very strategic points in the network.
“When there is an excess of renewable energy generation, rather than that energy going to waste, we can actually charge those batteries and store that energy.
“Then we’ll give it back to the National Grid when they need it, when energy generation falls off later in the day, to help balance the system in a clean cost-effective manner.”
A National Grid ESO spokesperson said: “Britain has one of the most reliable and fastest decarbonising electricity systems in the world.
“This is thanks to significant investment in upgrading Britain’s electricity system, including the deployment of renewable energy at scale.
“And, that investment means we are now able to explore new ways of operating the electricity market to strengthen reliability further, increase choice and keep costs down.
“We welcome any initiatives which can help strengthen the electricity system further, including the development of battery technology.
“In the meantime, we use capacity constraint payments to manage generation and ensure reliability across the grid.
“We constantly analyse these costs and ensure they are cost effective for billpayers, while working with industry and government develop a secure, lower cost and sustainable electricity system.”
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