Energy Markets and Net Zero

[Trevor unhiding posts.]

Nov 11, 2022 6:56:55 GMT alec said:

lens - I think you're starting to comprehend the difficulty posters have in engaging with Trevor in sensible, grown up discussions. Everything has to be a battle, and unless you agree with everything he says, it gets pointlessly argumentative. He could start an argument in an empty room.

Nor this bit of comedy gold. It would of course be much better if certain people adopted a 'read only' approach to my posts or simply ignored them all together (as requested by Mark) which is the approach I normally use, but have dragged back into the cesspit - hopefully for one day only. 

Should find it soon though and since I'm posting these as a Guest then I can't delete them (although I'll have no issue if Mark chooses to delete them if he chooses to)

[Trevor unhiding posts]

Nov 13, 2022 18:22:33 GMT alec said:

Mr Poppy - "There is a 20p kWh 'arbitrage' (net of various losses, etc) between day+night prices of electricity = £200,000 GWh."

Really? Not sure anyone who knows the energy market would ever make an assumption like that, even for a fun illustration.

If we ever have a 20p/kWh arbitrage between peak and off peak price for anything more than a very short term episode then the UK is well and truly f@cked.

Also perhaps worth pointing out that the idea of 'day+night' pricing differential is rather quaint. It really doesn't work like that.

Found it. The 20p/kWh (£200/MWh) is a plausible 'arbitrage' number to use for "illustrative" purposes in the future.

The reason we will continue to pay some network constraint costs (although we do want to minimise them) is that we will have periods of excess supply and excess demand (usually linked to the day-night demand pattern of electricity consumers) that will mean we have times when we pay for suppliers not to supply (effective price is then -ve, which some Octopus Agile users will hopefully once again be able to get more regularly overnight in the near future). Folks are welcome to look at some of the peak prices UK has been paying for some quite small amounts of electricity for brief periods as 'average' arbitrage profit is not a simples normal distribution from the mean price.

However, the simples mean price (with some -ves at the lower extreme) that folks can use to crudely estimate the arbitrage profit potential of battery (or pumped hydro, other short-term fairly high cycle rate) storage is likely to stay above £100/MWh into the future - or does anyone feel the need to 'correct' me on that assumption with a prediction that prices will drop massively in the future and/or that moving to more renewables will somehow make the volatility of electricity prices lower?

NB I could go into the ££ and capacity utilisation assumptions being used by those who are building GB-rEurope interconnectors (noting their pricing mechanism relies on 'arbitrage' between two grids rarther than between two time periods). NG list 'interconnectors' in their table on the breakdown of constraint costs. That does then get into a slightly more tricky "OR" discussion and which side of a GB-rEurope interconnector is scaling up their 'storage' rather than pay to use a GB-rEurope interconnector during periods when both sides will 'usually' have 'similar' periods of both excess supply and excess demand (in the near future). Simply put do we want to 'Store it in Britain' for when we need it or pay to export it via an interconnector for someone else to then store it and send it back to us when we need it (noting that the interconnector would than add 2x avoidable costs versus 'Store it in Britain' option)

The Scotland-England discussion is a "yes, and" one but it somewhat linked to the "OR" choices as under the Old Model Tory then they prioritised stuff like Viking Link over Scotland-England interconnectors - hence the "comparison" requirement. 

The "OR" component is partly to with capacity in laying undersea cables and ££ cost, but also what makes most sense for Energy Security and ensuring we make/buy/sell more in Britain by creating British jobs for British workers and end the Old Model Tory neoliberal model of exporting British jobs only to reimport a higher global carbon footprint (as Scotland will soon become truly net zero in all the electricity it produces and those with the NG 'app' that breaks GB into regions will already see that Scotland is a very green and pleasant land when it comes to carbon emission from electricity generation - where as a lot of England is still using a lot of fossil fuels, even when it is windy)

PS Before anyone replies (and hopefully the usual suspects won't) then yes, we do want GB to become a Green Energy Superpower which will mean we do become a significant net exporter of energy - some of which can and should use the current interconnectors (for mostly export only, other than Norway which will be seasonal in either direction) and I've never said I'm opposed to a few more, only that we need to prioritise GB issues first and be selective on who we have GB-other interconnectors with. 

 

[Mr Poppy]

NG app mentioned above can be downloaded onto smart phone or you can use the web version:

www.nationalgrid.com/cop26/when-to-plug-in-app

That can click you through to: www.carbonintensity.org.uk

Where you can see the map, with the current state of play shown in the attached image (note they show the arrows for flows between the regions which is fairly obvious anyway but still nice to see and something that is on the broader map that I've posted in the past and will provide link for again - as who doesn't love a map, eh?: app.electricitymaps.com/map - remember to click on the 'wind' symbol to see what 'usually' happens for wind in Europe)


Attachment Deleted

Scotland will make carbon accounting very easy once they are 100% green electricity.

[alec]

What bizarre behaviour.

[lens]

Feb 5, 2023 0:22:38 GMT Mr Poppy said:

Feb 4, 2023 22:34:36 GMT lens said:

Yes, I'd strongly doubt it would ever be extreme as such, but no I wouldn't expect two places 720-900km (thanks alec ) apart to have the same *weather* at any particular moment in time.

FFSv2. Did I say "same" or do you think "usually, similar" = "same" ??

Well, it strikes me as fairly pedantic, but I'm quite happy to replace "same" with "similar" if it makes you happy? Such places *may* have the same (or similar?) weather at any particular time - but it's also likely it could be very, very different. Isn't that just stating the obvious?

I really don't know what sort of bitter argument I seem to have got in the middle of, and won't be responding any more. My own contribution was just intended to say that long interconnectors over large geographical areas should only increase diversity - which regarding renewable generation can surely only be a good thing? Whether it's a case of North-South or East-West being less important - best of all both?

[alec]

lens - "I really don't know what sort of bitter argument I seem to have got in the middle of, and won't be responding any more. My own contribution was just intended to say that long interconnectors over large geographical areas should only increase diversity.."

Absolutely. Sadly, some people can start a bitter argument in an empty room, but yes, you're absolutely correct, as is obvious. There was a significant misinterpretation by Trevor regarding the climate data I posted about London/Copenhagen, but anyone who knows about meteorology will appreciate the points about different weather system zones and what the significant differences in the average wind roses actually represents.

That's why we do interconnectors. It's as simple as that.

I'm happy to carry to carry on a friendly discussion on this if you like, and we can just ignore the dafter posts that spoil things.

[Mr Poppy]

Given I didn't start the recent and ongoing episode of 'bizarre behaviour' I will leave it in the hands of Mark so I will make no further comment on that beyond a link that covers one of the "yes, and" components of Scotland-England issue and the £ numbers I gave as an 'illustration' for storage:

Wasted wind energy could have powered 1.2m homes
Britain’s lack of storage meant 1.35TWh of wind energy between October 2022 and January this year was lost

www.reuters.com/business/energy/uk-energy-support-schemes-cost-halved-mild-winter-tames-prices-nao-2023-02-07/

Storage could, in theory, be in either location as the imbalance is 'usually' both temporal and geographic but due to the insufficient level of interconnectors between Scotland-England then it is better to locate that storage near the excess demand locations. IE

When it is windy in the North part of the North Sea (as it is often is and with quite strong winds etc so high load factors on those wind farms) - transmission cables to England COULD be used 24hrs per day* 

Any excess supply exported from Scotland overnight is then stored close to where forecasts show it will be needed the next day (eg London/SE England).

The higher demand daytime period the following day can then use Scotland-England transmission cables AND use the storage from having charged up batteries in London/SE England overnight - at the moment we need both, hence "yes and"

Note increasing storage capacity was listed as a "yes, and" option in the original article that leftieliberal posted. We would eventually hit a bit of an "OR" decision but that would then become mostly one for storage location and form of storage. In the unlikely event anyone is still 'getting it' (and judging by some of the decisions being made by wind farm operators not just in Scotland but also in future Dogger Bank locations, they are) then in the not too distant future we'll need to look at longer-term storage for the fairly frequent periods of excess wind supply coming out of wind farms in the North Sea

Equinor and SSE Eye Green Hydrogen Production for 1.32 GW Dogger Bank D
www.offshorewind.biz/2023/02/06/equinor-and-sse-eye-green-hydrogen-production-for-1-32-gw-dogger-bank-d/

Of course the wind doesn't blow 24/365 over Dogger Bank (load factor is not 100%) but if there is enough surplus electricity then the ££ numbers start to work for making a lot more green hydrogen from intermittent wind.

NB Some Scottish wind farms are also considering dedicated wind-hydrogen and hoping to recycle existing nat.gas pipeline infrastructure (IIRC links supplied back on UKPR but I can dig them back up and repost them upon request).

* At the moment then during the overnight low demand period the transmission cables are usually not used so the electricity is wasted (and NG pay out a constraint cost to Scottish wind farms). Also note that when London/SE England wakes up the next day and needs a lot of electricity then we need to find it from somewhere so we crank up more CCGT or import it (paying a constraint cost to do so). So we pay Scottish wind farms not to produce and then additionally burn more nat.gas and/or pay a fee to GB-rEurope interconnector companies to import electricity. Not a good approach IMO as the current approach means we might pay two different types of constraint cost (one to Scottish wind farms and one to GB-rEurope interconnectors) when with increased storage we could pay neither of those - although obviously the person building the storage would then benefit from the 'arbitrage' between day-night use it would reduce waste, increase energy security and be greener than the current approach (and I'll avoid the tangent (that I did play 'devil's advocate' on from both side a while back) on whether or not BEV owners can/will fill most of the overnight storage need as for now increased grid level storage is most certainly in the 'Yes, and" category). 

[Mr Poppy]

Reposting this on the Energy thread with additional comments and info below:

Feb 6, 2023 15:43:09 GMT Mr Poppy said:

...I note RoI want to continue to use GB as a 'land bridge' to access the large market for electricity in both GB and beyond into continental Europe and given they do 'often' have 'fairly different' weather patterns to GB/North Sea neighbours to the East, and are looking to build out from current 25MW to "7GW by 2030, 15GW to 20GW by 2040, and 37GW by 2050"* (map for where the locations are planned is on the Energy thread) then the new Greenlink** interconnector (0.5GW likely operational end of 2024) will need to be scaled up in due course and/or other interconnectors between GB and Eire are boosted or new routes are picked - and/or RoI will need to scale-up storage and consider exports for 'value-add' products like hydrogen (that they could ship from RoI ports straight to mainland Europe as ammonia and/or help with the development of a hydrogen pipeline infrastructure to link up Eire-GB-mainland Europe). Lots of options, some of which are "yes, and" but some of which crossover to "or" choices and depend a bit of what other countries (notably GB in RoI's case) do.   

* www.siliconrepublic.com/machines/ireland-offshore-wind-energy-nsec-2050
** www.greenlink.ie/summary

Eire (one nation when it comes to their grid) currently import quite a bit of electricity from GB, especially it isn't that windy on their West Coast


Attachment Deleted

Map of Eire's current transmission network (note the big 400kV links from their West Coast to their areas of high demand) and generation capacity - both of which have been 'neglected' in the same way that many of countries neglected the issues of Energy Security (eg GB, Germany, etc).


However, like UK et al they've finally realised the importance of Energy Security and like GB want to use their 'natural comparative advantage' in wind to not just ensure they become self-sufficient but also seek to benefit from exporting energy (see the amount of offshore wind capacity they are looking to add and note that they will first interconnect (ie export) to GB at which point it becomes part of the grid and can be used in GB or exporting using additional interconnectors to rEurope). It is not realistic in the short-term for RoI to lay undersea cables to Normandy in France for many, hopefully obvious, reasons and probably not economic to consider that option in the longer-term (although exporting green hydrogen obviously is something they can and are considering as a longer-term option).

Somewhat simplistic but at 'peak demand' then Eire (one nation for electricity) currently uses max 7GW of electricity for a population of 7million

Attachment Deleted

So they will go from 'usually' been a net importer of electricity from GB to roughly 2way towards the end of the decade and net exporter by 2030 (and a huge net exporter by 2050). Now of course the RoI part of Eire is not our polity but the map (reposted below) shows that RoI's plans are fairly realistic given how much coastline they have in fairly shallow waters (and in the Atlantic Ocean rather than the Southern part of the North Sea)

File limit for attachments reached so map will be reposted in 1min.

Link for all the Eire (one nation) info: smartgriddashboard.com/#all

[Mr Poppy]

Map mentioned above reposted (once again) with the legend added and the region expanded out a bit to cover more of the Atlantic Ocean and the Baltic Sea. Folks can check into the population sizes and electricity demand of countries close to the Baltic Sea if they want to - noting the relatively limited opportunity for wind farming in the Baltic Sea compared to the North Sea and Atlantic Ocean. 



NB The map sadly doesn't show the load factors or 'density' for each current/future wind farm. However, for 'illustrative' purposes then the size of each 'blob' is roughly comparable (although if anyone wants to argue some will be better than others then.. well Scotland, Ireland and the SW of England aren't just good at rugby)

[Mr Poppy]

Coffee break over but I'll be back later with some 'illustrative' numbers on the 'geographic' arbitrage opportunity and use the 'good' example of RoI-GB

Although at some point, around 2030, RoI is really going to need to start looking into exporting green hydrogen to likes of Germany they will still benefit from the Eire-GB interconnectors being built (as will GB)... up to a point, which is maybe 1-2GW more than the current+Greenlink interconnector and will likely be via cables laid next to the current+Greenlink interconnector due to the pre-existing transmission networks in RoI, Wales and England - although as they build out more wind farms off their West Coast they'll need to upgrade their internal transmission network for the same reasons as we need more transmission capability between Scotland and England. I digress, more later...

[Mr Poppy]

Hhhmmm OK, here's the link for the cap/floor pricing structure for Greenlink (and NeuConnect) 

www.ofgem.gov.uk/sites/default/files/2022-08/Greenlink%20provisional%20cap%20and%20floor%20level%20-%20Update%20letter.pdf

I intend to make some simple, illustrative assumptions to make the comparison to 'storage' numbers previously posted but need to check a few things first (eg the capital cost of Greenlink does seem a bit low, even if that is only 1/2 the total and uses a lot of pre-existing infrastructure)

However we can quickly see the minimum 'running yield'* 

"Preliminary Actual Floor Level is £18.60 million (in 2020/21 prices).
GB share of Greenlink’s development and capital costs at £217.6m"

18.6/217.6 = 8.5%

To hit the cap (£31.24 million which implies 14.3% 'running yield') then they'd need to use the interconnector a bit more often and IMO they will BUT, after checking a few things, I'll use the 'floor' as it is relevant to feeling the need to use an interconnector once you've committed to building it (although I'll try to avoid drifting into the Southern North Sea). IE having effectively pre-agreed the minimum network constraint fee you will pay for using an interconnector then to not use it all will seem like a waste (but that is the 'sunk cost fallacy' and should be irrelevant.. although if you have politician involved then sadly not)

* Not the same as Return on Investment % although for simplicity we could assume that inflation gains roughly offset the lifespan - although it would be pretty easy to put that into a spreadsheet if anyone wants to do that.

[Mr Poppy]

Pretty sure they'll easily meet the 'floor' of use for Greenlink but here's the ILLUSTRATIVE numbers which can compared to the ILLUSTRATIVE numbers for "OR" short-term storage (eg grid level batteries) noting two important points first of all:

1a/ Short-term storage within a 'one nation' grid is 'better' as you'd get less transmission loss (ignored in the numbers as it's quite small); it provides a higher level of 'Energy Security' (given GB is not in the EU and IIRC, pre Putin invading Ukraine, some tw4ts in CON did once mention cutting the power to RoI as a threat); you can more reliably trust what your doing with your own network than what others will do with there's (in both the 'next 24hrs' and the 'next few decades' time frame)

1b/ linked to above but so important it is worth stating separately. Temporal storage is more flexible (we can store any form of electricity: sometimes excess wind, sometimes excess nuclear, sometimes perhaps even excess solar - although not a lot of the last one at a 'one nation' grid level in the case of Eire and GB, plenty of individuals can and do store some solar for 'short-term' time periods)

1c/ Again linked to 1a/ then the day-night excess demand-excess supply pattern is much more predictable than the wind (and hence 'cycle rate' (capacity utilisation) will also be higher)

2/ Pricing structures for storage are... 'evolving' (the 20p/kWh, £200MWh being 'illustrative' for the future with no HMG assistance and the kind of number someone on Octopus Agile would easily be able to get if the full French nuclear fleet was back up and running)

NB This post is READ ONLY. Please, no replies, misrepresentations, etc. Although of course anyone is very welcome to post their own numbers at any time!

So. To 'store' electricity via geography rather than time then you need a 'roundtrip' (eg from RoI's perspective they send some electricity to GB when they have excess supply and then we send it back later when we have excess supply).

£200MWh/2 = £100MWh for each use of the cable.

500MW cable = £50,000 for each hour they are used at full capability in one direction (not always used at full capability but ignore that)

The 'floor' of £18,600,000 / 50,000 = 372 hours of full capability use in one direction

24 x 365 hours in the year = 8,760 hours in the year

372 / 8,760 = 4.2% of the time (which should be easily met, by all means work through the numbers using the cap which IMO will be hit most years and hence why 'more of the same' is likely for RoI-GB)

NB As I mentioned the 'capital cost' of the Greenlink interconnector seems way too low IMO but even using the £500million number I was going to use then I'm very sure we'll make 'good' use of the Greenlink interconnector (and have stated that we'll very likely* increase the capability of that interconnection - especially if GB's share of a 500MW interconnection to somewhere that does 'often' get 'quite different' weather to the Southern part of the N.Sea and will soon become a very green and pleasant land (from electricity generation perspective) is for the just £217.6million of capital cost!!)

"It's a deal, it's a steal its the sale of the f'ing century..." (just change the last bit to we should rethink some of the vastly more expensive interconnections to places who 'usually' get 'similar' weather to GB and, 2nd only to prioritising Scotland-England, then GB should look to the Emerald Isle to make interconnections and obviously they need to look at GB as well - it taking two to tango as they say)
www.youtube.com/watch?v=iXTz44d6H-k

* The reason for 'just' 500MW being limitations on existing infrastructure elsewhere in the transmission network. RoI has existing, recyclable, infrastructure for: "Great Island Combined Cycle Gas Turbine Power Plant, Wexford
The 460MW Great Island combined-cycle gas turbine (CCGT) power plant is located near Waterford Harbour in Great Island, Wexford County, Ireland"
www.power-technology.com/projects/great-island-combined-cycle-gas-turbine-power-plant-wexford/
To build more then ROI will need to increase their onshore transmission network (NIMBY risk) or limit the capability on the import side. Of course the GB connection side would also need to be expanded and hence why alternate routes are another possibility if the NIMBY types cause a problem. 

PS Yes, I know, I know. I should have used € in the above given I did say it was from RoI's perspective and eventually the interconnector is very likely to only flow from RoI-GB (unless they really go for green hydrogen) but I can't be bothered converting the numbers into € and checking if RoI are giving the Greenlink investors the same deal. 

[Mr Poppy]

Quick addition to above. The Welsh side of Greenlink has huge additional capacity as it is will be very close to:

Pembroke B Power Station is a 2,200 MWe natural gas-fired power station near Pembroke in Wales

en.wikipedia.org/wiki/Pembroke_Power_Station

Pembroke B CCGT obviously won't be needed much when it is windy in the Irish Sea (and 'usually' also then for most onshore wind farms in Wales) and will hopefully not be needed at all in the more distant future (same for the 500GW CCGT on the RoI side). However, there is obviously a transmission network stretching from Pembroke through S.Wales and onto England that can already handle 2,000GW of electricity. As noted above the RoI side will need further onshore transmission network capability if they want it to go >500GW and make any additional capability also '2way' - but 'fair play' if by the time they agree to add more, then any additional capacity only operates 1way (RoI -> Wales). I'm sure we'll make good use of the cheap excess wind supply we can get from the Emerald Isle. € wise then it would better for them to give excess Irish wind to GB rather than pay their own wind farms to shut down (and if they'll build as much wind farm capacity as they say they will then they'll be in 'excess supply' quite often.. unless they go big on green hydrogen for export of course.. and we can't be sure of what another polity will decide to do so should not assume anything).

The same 'pre-existing infrastructure' can't be said for the many of the other interconnectors that Ofgem prioritised (and that NG is often an investor in) which is why £/GW they are so much more expensive - before you even get to such matters as the Southern N.Sea having such similar weather for all the countries building wind farms there. Greenlink is 'cheap as chips' coz it didn't need much additional 'land' infrastructure and is part of the reason why I picked it as a 'good' example of a GB-rEurope interconnector. 

PS We do need to consider what we're going to do with the Wyfla site (Anglesey) as we have pre-existing transmission network set-up to handle over 1GW of electricity there and if we don't 'get on with it' and commit to build a new-new nuclear (and maybe wind hybrid) facility there then someone is going to think 'hhhmmm... what else could we do with all the currently under utilised transmission network in Anglesey' and look West for cheap supply rather than make/buy/sell more British electricity for British consumers. 'In Shapps we trust' and that does not fill me any confidence.

[alec]

Hmmm....quite hard to actually understand the recent posts due to the confused writing, but I get a horrible feeling someone is confusing the price paid to generators for producing electricity with the capacity charges paid to the operators of the interconnectors for transporting the electricity - very different things! The idea that the interconnector owners could achieve their guaranteed minimum income with only 372 hours operation a year ought to have given the game away, and £50,000 per hour to use a 500MW cable at max capacity, given the capacity market parameters, is a stretch, but as I say, it's a pretty hard set of posts to understand, as ever.

Actual maximum capacity charges for all the current UK interconnectors are fixed for 23/24 by BEIS at a maximum of £75/kW/yr under the Capacity Market Auction Parameters, which works out at about £8.56/MWh, so the numbers themselves are a little fanciful, even for a fun illustration.

There may also be some misunderstanding as to what the price floor and cap represents, as the floor is obviously not the minimum you would pay, it's the maximum (assuming we're talking about National Grid here, which isn't entirely clear, it must be said) and isn't anything the interconnector operators would pay anyway (it's their guaranteed income).

Not for the first time, it all seems a bit confused, it must be said.

[Mr Poppy]

To continue the comparisons. Note all the pricing mechanisms for GB-rEurope interconnectors are easy to find. Here is the one for Viking Link (1.4GW), which applies to "National Grid’s 50% share of the cost and revenues of the project" and note:

"..provisional cap and floor levels at £111.5m and £61.7m (in 2019/20 prices)"

www.ofgem.gov.uk/publications/decision-final-project-assessment-viking-link-interconnector-denmark

With some more details (not all of which you'll find in their glossy on-line brochure). NG's 50% costing 1/2 the total so estimate €1,120m (note due to the high level of 'onshore' grid connectivity then other estimates might not show the full estimated cost)

www.power-technology.com/projects/viking-link-interconnector-project-denmark-uk/

I will keep it as simples as possible for the comparison and ignore all the additional benefits of RoI-GB (such as the different weather, RoI having less options on alternative buyers for their exports (notable compared to likes of Denmark who are connected by land to a huge demand country), other renewable sources in the English EEZ of the Southern N.Sea needing to use land based transmission infrastructure in Lincolnshire, etc.)

Using the floor levels:

Greenlink (RoI-GB): £217.6m / 0.5GW = £435.2m/GW of capability 

Viking Link (Denmark-GB): €1,120m / 1.4GW =  €800m/GW = £714.3m/GW of capability

Obviously (I hope) then to justify a higher price/GW the expectation would be that Viking Link would be used either/or
1/ More often (and people can use the cap levels if they want to check that)
2/ For a bigger arbitrage profit per use (which is unlikely given there are 'better' options who are far more likely to have a significant difference in their excess supply/demand than GB - such as RoI for excess wind (by 2030, assuming they build what they say will build) or France for nuclear (assuming they do eventually get their full nuclear fleet back up and running)

NB in #2, whenever considering another country we have to make 'assumptions' as we don't operate their grid, or make their decisions for them* IMO it is hence better to ensure we have our own house in order first and do not make ourselves reliant on other countries (I think the term normally used for that is 'Energy Security'). We just had a very expensive lesson on being reliant on other countries!

IMO we'll make a lot more use of Greenlink for all the reasons stated and it's a hell of a lot cheaper as well - hence a 'good' example of an interconnector. 

* Speaking of which then, whilst I do think Brexit was mostly a 'catalyst for change' (ie things we could have done but did not do due to the Old Model Tory mindset of EU-Centric neoliberalism, exporting jobs to reimport a higher carbon footprint) then I note some countries get slapped down if they try to 'Take Back Control':
Denmark Halts Handling of Wind Power Permits Citing EU Laws

www.bloomberg.com/news/articles/2023-02-07/denmark-suspends-handling-new-wind-power-projects-citing-eu-laws?leadSource=uverify%20wall

NB We should copy some more of the things Denmark was trying to do (and getting away with for a while). The "open door scheme" is an excellent idea which, with a bit of refinement, would IMO reduce the 'top-down' and painfully slow process in GB (and reduce the influence of NG - which I expect is something most people would want but perhaps have still not realised has been a reason for many 'bad' choices and (deliberate?) negligence on what should have been our highest priority: interconnecting Scotland-England).

[alec]

Hmmm....

- .provisional cap and floor levels at £111.5m and £61.7m (in 2019/20 prices)

...

Using the floor levels:

Greenlink (RoI-GB): £217.6m / 0.5GW = £435.2m/GW

Viking Link (Denmark-GB): €1,120m / 1.4GW = €800m/GW = £714.3m/GW

So that's the cap level for Greenlink, not the floor level, and the total GB capital cost for the Viking link, not the cap or the floor.

Using the actual floor figures for both we get £37.2m/GW Greenlink and £44.07/GW Viking, so quite reasonable.

Much cofusion here, I think

As below, my error. It's nothing at all to do with the floor levels as stated, it's the capital cost.

[Mr Poppy]

Feb 7, 2023 16:53:52 GMT Mr Poppy said:

Hhhmmm OK, here's the link for the cap/floor pricing structure for Greenlink (and NeuConnect) 

www.ofgem.gov.uk/sites/default/files/2022-08/Greenlink%20provisional%20cap%20and%20floor%20level%20-%20Update%20letter.pdf

I intend to make some simple, illustrative assumptions to make the comparison to 'storage' numbers previously posted but need to check a few things first (eg the capital cost of Greenlink does seem a bit low, even if that is only 1/2 the total and uses a lot of pre-existing infrastructure)

However we can quickly see the minimum 'running yield'* 

"Preliminary Actual Floor Level is £18.60 million (in 2020/21 prices).
GB share of Greenlink’s development and capital costs at £217.6m"

18.6/217.6 = 8.5%

To hit the cap (£31.24 million which implies 14.3% 'running yield') then they'd need to use the interconnector a bit more often and IMO they will BUT, after checking a few things, I'll use the 'floor' as it is relevant to feeling the need to use an interconnector once you've committed to building it (although I'll try to avoid drifting into the Southern North Sea). IE having effectively pre-agreed the minimum network constraint fee you will pay for using an interconnector then to not use it all will seem like a waste (but that is the 'sunk cost fallacy' and should be irrelevant.. although if you have politician involved then sadly not)

* Not the same as Return on Investment % although for simplicity we could assume that inflation gains roughly offset the lifespan - although it would be pretty easy to put that into a spreadsheet if anyone wants to do that.

note the 50% share of the GB capital cost is £217.6m 

For the revenues then we can use a simples ratio to switch from the 'floor' (which is the minimum fully guaranteed payment regardless of usage) to the 'cap' (which is the maximum revenue allowed and creates a 'perverse incentive' for the preference to use GB-rEurope interconnectors (and then price out storage) that I've been leading up to)

Cap/Floor = 31.24m/18.6m = 1.68x

Chopping down another post of mine to get a 'illustrative %' for the floor usage (and note the owners of the interconnector will get the floor payment even if that is not met):

Feb 7, 2023 17:39:15 GMT Mr Poppy said:

Pretty sure they'll easily meet the 'floor' of use for Greenlink but here's the ILLUSTRATIVE numbers which can compared to the ILLUSTRATIVE numbers for "OR" short-term storage (eg grid level batteries) noting two important points first of all:....

NB This post is READ ONLY. Please, no replies, misrepresentations, etc. Although of course anyone is very welcome to post their own numbers at any time!

...
372 / 8,760 = 4.2% of the time (which should be easily met, by all means work through the numbers using the cap which IMO will be hit most years and hence why 'more of the same' is likely for RoI-GB)

I thought I'd better put that in a much larger font before continuing.

[Mr Poppy]

OK, so more maths (groan).

24hrs in the day (and 365 days in the year, 365.25 if you want to be pedantic)

4.2% of 24hrs = 1hr per day, in one direction, on average

For the revenue cap then 1.68x 1h = 1.68hrs per day, in one direction, on average.

So the 'perverse incentive' should hopefully be easy to understand.

Once NG hit the 'cap' (which for Greenlink* is roughly, illustratively 1.68hrs per day, in one direction, on average over the course of the year) then from NG's perspective the price of using the interconnector becomes 'free' (a bit like the 4th+ glass of prosecco at a bottomless brunch - once you've paid the initial price you're tempted just to drink as much as you can)

So (conspiracy theory time, backed up by the maths). NG 'deliberately' want to use interconnectors as much as possible and Jan'23 data** shows that we imported electricity not only on 'cold dunkelflaute' days but also on windy days (which would have been UK importing German coal generation via France/Belgium/Netherlands). They are well ahead of the monthly averages needed to hit 'cap' (a bit like the bottomless brunch lasting for 12 time periods and you being 2 glasses of prosecco down by the end of the 1st time period - at which point your probably not paying attention to the damage you are causing your own body)

NB The price of using the interconnector is NOT the same thing as the market prices that create the arbitrage. We could be paying £400MWh for 'day-ahead' prices and £4,000+ MWh for very small amounts for short period of times. The criteria to use an interconnector (versus another option) is simply that an 'arbitrage' between two geographies exists and once you've effectively made the cost of using the 'interconnector' free then.. well, keep drinking the Prosecco

What really gets my gammon rouge is that no one seems to give a shit. We keep on approving new interconnectors, which, via the 'perverse incentive' then make it much harder to justify 'temporal' storage (eg grid level battery storage) and reduce the incentive to 'Build it in Britain' - keeping GB reliant on other countries.

* As I said, Greenlink is a 'good' example as in the future it is very likely RoI will have to 'dump' electricity into GB at -ve prices (although not until after 2030 and only if they build out as much wind as they say they will and don't go big on green hydrogen exports). I perhaps shouldn't have said Viking Link was a 'vanity project' but the words I should use would likely get me banned from this site (which is perhaps the outcome that someone is hoping for?)

** See several days in early January when the 'light blue' bit (wind) was providing 10GW+ of electricity (per hour for lots of hours) but we still had a lot of the inteconnectors (the colours bunched at the top) importing electricity to GB. We have more than enough LNG capacity to import more nat.gas to burn in British CCGTs (as shown by how we helped out of neighbours last year - contrary to some of the nonsense about it being UK that would be in trouble) and clearly enough CCGT capacity to do so (as shown by the 'cold dunkelflaute' days when we can generate over 20GW from nat.gas). So WTF. Seriously WTF!

Attachment Deleted

gridwatch.co.uk

and repost of NG getting very excited about imports (and who is not excited if they are already on their 3rd Prosecco knowing they're also a shareholder in the supply of more Prosecco). Energy imports: 2843GWh (+ exports of 871GWh) but we didn't burn much coal - even though someone else was burning that an exporting it to France for France to then export to GB. 

www.nationalgrideso.com/electricity-transmission/electricity-explained/electricity-and-me/great-britains-monthly-electricity-stats

[alec]

Yes I think we're getting there, but it remains a strange point to try to make. Rather falls down on the point that the floor and cap agreement is (of course) conditional. If the owners fail to make the interconnector capacity available to the market for the requisite period of time, they would be in breach of their license conditions. So the point here is that the provision of interconnectors, underwritten where appropriate by a cap and floor mechanism, enables consumers to access the best value electricity - in theory at least. The cap is there to prevent operators capturing too much of the arbitrage trade profits. High utilization availability of the interconnectors is baked into the contracts, such that if the prices are such that the interconnector owners hit their cap after a few months of the year, they have to continue making the connection available to the market, but hand over the revenue over the cap to NG, which is then used to reduce overall network charges.

Of course, interconnectors don't function in isolation. The entire generation and storage system is moving over to the contracts for difference system, which is the same principle as the floor and cap. So it's not really credible to talk about perverse incentives in the interconnector market, because the same thing applies to storage, generators etc. So if NG use the interconnectors more because they are 'free' once they've exceeded the floor, other parts of the system - like storage - would potentially be getting payments because they aren't meeting their floors because NG isn't calling on them enough. The whole point of this is to fund a networked system that is both stable (over capacity much of the time) but which still allows access to the best value energy at any given moment.

Bottom line is that we need many more interconnectors for stability and wide area access to renewables, and we need storage and home generation. Given the nature of the industry, if it's being run as a series of private enterprises, we need a system to de-risk investment and incentivise utility. The system is complex and far from perfect, but the point about perverse incentives doesn't really take into account the wider market backdrop, nor the full regulatory system behind the cap and floor arrangements.

[Mr Poppy]

An interesting article that covers 'Energy Security' (ie being reliant on interconnectors to other countries). I'll clip out some snippets (and add some comments) but would encourage anyone who is genuinely interested in the discussion to read the link in full themselves (and not reply to me)

"Unlike the other markets with which Britain is linked, Norway and GB have low weather correlation, and Norway’s extensive hydro network is seen as contributing to Britain’s security of supply"
(ie it makes a lot of sense for GB to connect up to Norway)

BUT...

"There are growing concerns as to whether it is reasonable or sustainable for countries such as the UK to rely so heavily on imported electricity... "“Why should Norwegian families and the Norwegian economy at large pay for the energy transition in the UK?”"
(ie by exporting their cheap/excess electricity to GB grid, using the 'arbitrage' of GB electricity usually being so much more expensive than Norway via the interconnector (that easily hits its 'cap' revenue every year), they effectively make the price of their domestic electricity higher than it would otherwise be - basic economics of supply+demand)

watt-logic.com/2022/02/01/can-norway-be-the-battery-of-europe/

NB Lots of other countries are 'interconnected' to Norway as well and as the article highlights we can't all assume that we'll be ones who can do the fairly limited amount of 'quid pro quo' on selling them cheap electricity in the fairly limited periods when the 'arbitrage' will mean Norway's electricity price is higher than anyone who has an interconnector going to Norway. So WHAT IF Norway decides to keep it's own electricity for its own use (eg building a load of electrolysers to export the 'value-add' product of hydrogen - something that likes of Germany are certainly going to want to buy and EU have set a target for import volumes)?

Norway is, without doubt, the best example of an interconnector that benefits GB but given what Macron used to say (and IIRC some tw4t in CON once said WRT to RoI) and what Putin has done, then 'Energy Security' is important and it is foolish for GB/any country to rely on anyone else (for imports at least*) or assume what they will do in the future (eg fix their nuclear fleet, build all the wind farms they say they will build, stop burning 'cheap+dirty' coal for electricity, send LNG to GB rather than to Asia, etc). It does seem 'silly' to think that Norway would decide not to sell electricity (or nat.gas) to GB, and they'd need to rip up commercial contracts (or more likely not roll them over) if they stopped selling electricity to GB so that is an 'extreme' example but at the very least then GB is in 'competition' for cheap/excess electricity from Norway and we've very recently seen what happens when a lot of countries are competing for the same thing (eg LNG) - the market price goes up... a lot!

* We (and many other countries such as Denmark and RoI) will soon move into a position of becoming 'net' exporters (2022 for GB was a bit ahead of schedule and due mainly to the French nuclear fleet issue, 2023 is not off to a good start). Prices haven't been -ve very often for a long time but that will change soon and we'll be in the 'nicer' position of thinking of what to do with all the excess supply - and hopefully not think turning off Scottish wind farms is the best option (although it might well be the 'cheapest' short-term option due to the historic 'perverse incentives' and NG's historic priority choices).

Do we store it in Britain (eg significantly increase the roll-out pace of getting more short-term storage)?, use it in Britain (eg 'reshore' some heavy industry and/or more rapidly move from blast to arc furnaces for steel)?, or store/export it in a less perishable and 'value-add' format (eg green hydrogen)? "OR" do we think everyone else is moving to 'over capacity' so why should we bovver and slip back into the Old Model Tory of Europe (as Norway is not in EU)-centric neoliberalism and just approve a load more interconnectors to countries have high weather correlation to GB (eg our neighbours with adjoining EEZs in the Southern N.Sea) but have realised it is better to be a net exporter than a net importer?

We have important choices to make. It does look like we're finally making better choices and the new rebooted "Department for Energy Security and Net Zero" is encouraging (and LAB never really abolished the old department in the shadow front bench and have put Ed Miliband back where he belongs) BUT we have 'vested interests' (Ofgem and NG) that don't like change and quite enjoy being able to be both the supplier and consumer of Prosecco interconnectors when it is British taxpayers who pick up the bill and end up in a position of getting f*cked the hardest if someone does something outside of our control (eg French nuclear, someone not building all the wind the farms they say they will, Germany deciding to burn a lot more 'cheap+dirty' coal, Putin invading Ukraine, Qatar/US sending their LNG somewhere else, etc). 

Energy Security is NOT (IMO) making your country dependent on others - a very expensive lesson we just had to learn the hard way.

After the Financial Crisis we quickly slipped back into 'Old Model Tory (incl. Blair)' neoliberalism so forgive me for being concerned, now that nat.gas prices have dropped so much, that we won't 'forget' the very expensive lesson we've just had to learn. To become 'Energy Secure' then as Reeves would agree:

Make, buy and sell more in Britain to create more British jobs for British workers.

We 'Took Back Control', we can make Brexit a 'Catalyst for Change' so it now time to 'Make Brexit Work'.. make GB a 'Green Energy Superpower' 
(and other than enjoying 3 word slogans I do realise we could have done most of the change inside the EU.. but we didn't)

[Mr Poppy]

OEIS's: Quarterly Gas Review: Outlook for Gas Markets in 2023

a9w7k6q9.stackpathcdn.com/wpcms/wp-content/uploads/2023/01/Quarterly-Gas-Review-Issue-20.pdf

They tend to lean on the 'overly cautious' side IMO but that is perhaps a good thing. Forward prices reflect that all the 'surprises' are skewed to the upside (and option prices reflect 'skew' but so, to some extent, does the forward price itself as it will include a 'risk premium')

Of note on the opposing 'cautiously optimistic' side they do highlight: the record (for time of year) storage (see Fig1.9, page 12); the increased volumes of LNG that will be available in 2023; and the expectation that the French nuclear fleet starts to get back to where it was in 2021 (see Fig 2.1 that shows electricity demand for 2022 was quite a bit below 2021 but then also Fig 2.2 and Fig 2.3 that show that the supply side was matched by little change on anything other than the drop in nuclear - with 'coal' overall being a bit higher due to a mix of some countries burning a lot more and some burning a bit less)

So it's still 'squeaky bum time' for now but as each month passes the risk of another major spike in prices diminishes and forward prices will likely remove the 'upside risk' premium and drift a further 10-20%, with some bumps along the way that will likely be a lot smaller than the bumps we saw in 2022. Of course if any of the upside risks occur then prices might spike back up 50%+ (hence the 'risk premium') but we'll also be getting more renewables etc online as 2023 passes and we move into/past next Winter.

A glimmer of light at the end of tunnel IMO but we need to make sure that does not mean we can go back to the 'Old Model Tory' neoliberalism WRT to 'Energy Security'. We just had a very expensive lesson in 'Energy Security', lest we forget. 

PS Below is the chart for Jan'24 Dutch TTF futures contract.

Attachment Deleted

www.barchart.com/futures/quotes/TGF24/interactive-chart

[neilj]

Wrong thread, deleted

[lens]

A while ago we were talking about energy storage in regards to renewables. I'm sceptical of a lot of "breakthrough" announcements, but there does seem to be a lot of talk about new (and cheap) chemistries suitable for grid storage, and as example cleantechnica.com/2023/02/07/new-sodium-aluminum-battery-aims-to-integrate-renewables-for-grid-resiliency/

Will such be the one to be the breakthrough? Even if not, I for one would be quite bullish about something based on sodium rather than lithium becoming first choice for grid storage eventually - for which the attributes for a good vehicle battery (weight and energy density in particular) are less relevant than cost/kWh and the use of abundant raw materials.

[alec]

lens - I sense that we are well on the way to sorting out many of the problems we face regarding storage and transport of energy, with a whole range of technologies reaching the point of market activation. As you know, I'm skeptical of hydrogen as the mainstay for this. It's being pushed very hard indeed by large vested interests from the gas extraction and transport sector, for obvious reasons, but its properties and problems are well known, and while there is going to be a significant role for green hydrogen, more likely in heavy transport, shipping etc, for general balancing purposes my guess is it will be eclipsed by better technologies. I also wouldn't want to invest long term in lithium, as I think that's not a long term option.

Apart from sodium batteries, the other big contender is iron-air batteries, which have a number of advantages over lithium-ion technology. Cost and availability, as well as duration of power supply are the obvious ones. These aspects are touted by supporters as being just the characteristics we need for medium term grid balancing over the period of hours to several days. They are already entering production soon in the US, so I would expect these to be a major news item shortly. See links here -

singularityhub.com/2023/01/11/form-energys-new-factory-will-churn-out-iron-air-batteries-for-grid-scale-storage/
www.popularmechanics.com/science/energy/a42532492/iron-air-battery-energy-storage/

I've also been tracking the progress of thermochemical energy storage for many years now, and this is another technology which has come of age. Mostly this has been developed on a small domestic scale, with a couple of technologies now available commercially in the UK. These use phase change or ultra high density materials to store electrical energy for later release as heat, and can prove highly effective on a diurnal basis, either matched up with roof mounted PV and/or as part of a dynamic grid balancing system to iron out production and demand cycles.

The problem these have tended to have is scaleability, although in principle there is nothing wrong with just making them bigger. There is a Finnish start up that has built a village scale heat battery system, so it is techincally perfectly feasible, but adding the heat network in a UK context will add cost and complexity. But companies are already making a living selling modular heat batteries for industry that can be scaled up on a single site basis. I've also kept a watching brief on the use of limestone as a potential energy storage vector - see pubs.rsc.org/en/content/articlelanding/2020/ta/d0ta03080e and helioscsp.com/economical-efficient-sustainable-thermochemical-storage/

It works, and it's a very cheap material. I've seen various proposals for this type of approach at scale, shipping thermochemically stored energy in tankers across the Med from North African PV farms to southern Europe, for example, so I think it's a 'new old' technology that is likely to see significant development. Similarly our previous discussions about liquified air energy storage, which again has the potential to repurpose existing LNG infrastructure so we have tankers mooring up at remote wind farms to fill up on energy, which can then be shipped to generation points where and when needed. You might not even have to grid connect the wind farm, which opens up huge potential for generation, especially if the floating wind turbines concept becomes established.

For these reasons I've long felt that the short and long term storage issues around large scale renewable deployment have been overstated. There are obviously problems, but many solutions as well. The problem we currently have is that in my view, governments are relying too heavily on established hydro-carbon extractors and conventional power industry players to develop the future scenarios, and as a result we are placing too much emphasis on solutions that suit these players but are less optimal for the rest of us. We're also years behind where we should be on demand shifting, largely because the generation and transmission vested interests have been fighting hard to retain control of the power system, rather than back the simple and obvious measures, because to do this would be to hand over chunks of the profit that they make from managing the grid to ordinary consumers and businesses.

Once people step back and see all of this, numerous solutions come into view, and if there is one bright spot from Putin's aggression, it's the surge of interest he has created in resolving these issues and the space this allows for these novel technologies to come to the fore.

[Mr Poppy]

The bun fight over who gets to supply what colour of hydrogen to Germany continues as Spain(+Portugal) need an export market for their future plans to be a 'Green Energy Superpower' by using their 'natural' comparative advantage in wind+solar (and fairly different weather correlation to Germany) butts up against France's 'Red Energy Superpower' concerns that they'll soon have a load of excess nuclear generating capacity (for long periods on many days, not 100% of the time) from their focus on a 'developed' competitive advantage in nuclear (which makes pink/red hydrogen).

As usual, everyone in EU is looking out for their own national interests with France and Spain(+Portugal) seeing each other as competition on who gets to supply Germany. Germany ideally wants to approve both Red/Pink H2 from France and Green H2 from Spain as 'competition' lowers the price they will pay and my inspired guess is that Germany will get what it wants (although they might end up with the slightly more expensive and cumbersome need to import Spain H2 as ammonia using shipping lanes and ports rather than pipelines if France spits the dummy to protect French national interests). The risk of course is the 'dither and delay' aspect whereby Germany can't be sure how much H2 it will be getting, or from where, so they will have to slow down their own 'transition' plans while France and Spain throw buns at each other and squabble over Green v Red and 'zero' v 'low' carbon (nuclear having some embedded carbon*). Spain might also need to slow down their plans as without certainty on how and to whom they'll be able to export their surplus energy generation they don't want to put too many eggs in the wrong basket (ie they might need to scale up ammonia and shipping exports but a pipeline is the much better option so they'll want to see if they can get that first). France.. well, France is France. IMO they need to get their current nuclear fleet fully operational asap to earn back some trust on how reliable they are as a supplier of 'Red' Energy and no country should make themselves dependant on France (eg see Macron's comments before the Ukraine war and the new Entente)

France in new row with Germany and Spain over nuclear-derived hydrogen
www.reuters.com/business/sustainable-business/france-new-row-with-germany-spain-over-nuclear-derived-hydrogen-2023-02-08/

Hydrogen is hydrogen from the point of view of what you then do with it (hence a carbon accounting issues) and at the margin 'Green' is better than 'Pink/Red' in terms of how you make it but both are a lot better than Blue, Grey, Brown or Black. Germany's plan to use cheap Russian gas for 'Blue' hydrogen has been scuppered and Norwegian gas is more expensive and 'finite'** so Germany needs to get their future hydrogen needs from somewhere - ideally somewhere close as there will be 'transport' costs.

Note Germany can repurpose it's nat.gas storage for hydrogen in the same way that we planned to do that with the Rough facility - although we got caught with our timing out of sync and will need a lot more than just the repurposed Rough facility in the future - assuming we do still want to be a 'Green Energy Superpower' of course and don't slip back into Old Model Tory neoliberalism and dependency on others. 

* Wind/Solar are not totally zero as they also have 'supply chain' carbon but we're splitting hairs IMO when we consider the 'scale' versus current alternatives being used as "Nuclear power has a minimal carbon footprint of around 15–50 grams of CO2 per kilowatt hour (gCO2/KWh). In comparison, the average footprint of a gas-powered generator is around 450 gCO2/KWh and for coal it is around 1,050 gCO2/KWh"
www.lse.ac.uk/granthaminstitute/explainers/role-nuclear-power-energy-mix-reducing-greenhouse-gas-emissions/

** Although they do plan to push into the Arctic (ironically and   due to Global warming melting the ice and making that more feasible):
www.highnorthnews.com/en/norway-now-germanys-largest-gas-supplier-future-supply-arctic-support-exports

[Mr Poppy]

If I get time later then I'll do a post covering a lot more detail on 'Future Scotland' but below is Scot.Gov's very realistic plans out to 2030:

"For onshore wind, increasing from 8.78 GW as of June 2022, to over 20 GW by 2030, more than doubling our existing capacity.

For offshore wind, increasing from 1.9 GW, as of June 2022, through a pipeline of 3.8 GW already consented, to 8-11 GW by 2030"

So mostly onshore out to 2030 but then mostly offshore after that (as per maps previously posted). 

"Scotland already has 13.4 Gigawatts of renewable electricity generation capacity. It is our ambition to deliver at least 20 Gigawatts of additional low-cost renewable electricity capacity by 2030, which could generate the equivalent of about 50%* of Scotland’s current total energy demand"

www.gov.scot/publications/scotlands-energy-strategy-transition-plan-ministerial-statement/

I haven't mentioned onshore wind farms when looking at 'weather correlations' but would note that onshore wind farms in Scotland are usually to be found (and will in the future be placed) in areas with 'easier' connectivity to the transmission network and areas of high demand as the 'theoretically better' areas on the NW coast are a bit of a bugger to connect up to the grid and hardly anyone lives there. 

spice-spotlight.scot/2022/09/20/renewable-energy-map-of-scotland/

Anyway, more on Scotland later but I'll clip out one more piece (and mention 'where' storage needs to be for the 'one nation' of GB later as it very much depends on which component of the overall system is hitting it's capability limits - for now that is very clearly Scotland->England interconnection but that might change). Some of the 'dither and delay' from UK HMG is because they do have some "OR" choices but I would agree with Scot.Gov that the below is unacceptable and needs to be sorted:

"We recognise the huge potential of pumped hydro storage power to play a significant role in our future energy system. The lack of an appropriate market mechanism from the UK Government is frustrating the realisation of this opportunity for significant economic investment, job creation, and gigawatts of clean energy"

I very much expect leftieliberal will agree with the above, although there will be 'environmentalists' with a narrow NIMBY focus who will object as they don't see the bigger picture. Anyway, I hope Scotland does build a load more pumped hydro storage but would note the annual 'cycle' rates that they need to be economically viable (easily met IMO, provided other parts of the system are upgraded) and that we can't assume that even if CON HMG pulled its finger out with it's 'evolving' pricing/revenue mechanisms for all forms of storage that Scotland will build as much pumped hydro as they 'theoretically' could. 

* More on that later, and I might have to introduce some 'probability' maths (huge groan), but load factors for wind farms (even in Scotland) are obviously not 100%.

[leftieliberal]

Feb 9, 2023 12:43:30 GMT Mr Poppy said:

"We recognise the huge potential of pumped hydro storage power to play a significant role in our future energy system. The lack of an appropriate market mechanism from the UK Government is frustrating the realisation of this opportunity for significant economic investment, job creation, and gigawatts of clean energy"

I very much expect leftieliberal will agree with the above, although there will be 'environmentalists' with a narrow NIMBY focus who will object as they don't see the bigger picture. Anyway, I hope Scotland does build a load more pumped hydro storage but would note the annual 'cycle' rates that they need to be economically viable (easily met IMO, provided other parts of the system are upgraded) and that we can't assume that even if CON HMG pulled its finger out with it's 'evolving' pricing/revenue mechanisms for all forms of storage that Scotland will build as much pumped hydro as they 'theoretically' could. 

The Strathclyde University papers I have previously cited such as here ukpollingreport2.proboards.com/post/438/thread don't assume the building of new dams or the enlargement of existing upper reservoirs so shouldn't really attract the opprobrium of NIMBY 'environmentalists'. There's probably some impact on fish stocks in the lower reservoirs, from the more rapid cycling of the water between the two, but that's about all.

[Mr Poppy]

Feb 9, 2023 13:29:53 GMT leftieliberal said:

Feb 9, 2023 12:43:30 GMT Mr Poppy said:

"We recognise the huge potential of pumped hydro storage power to play a significant role in our future energy system....

I very much expect leftieliberal will agree with the above, although there will be 'environmentalists' with a narrow NIMBY focus who will object as they don't see the bigger picture....

The Strathclyde University papers I have previously cited such as here ukpollingreport2.proboards.com/post/438/thread don't assume the building of new dams or the enlargement of existing upper reservoirs so shouldn't really attract the opprobrium of NIMBY 'environmentalists'. There's probably some impact on fish stocks in the lower reservoirs, from the more rapid cycling of the water between the two, but that's about all.

We both want the same thing (more pumped hydro) but I'll post some links on the broader NIMBY 'environmentalist' objections (which I think miss the bigger picture but can not be 'assumed' to mean every project would get the 'green light' even if CON HMG for UK pulled their finger out)

Conservation charities oppose plans for Coire Glas hydro project
www.pressandjournal.co.uk/fp/news/highlands-islands/4477722/conservation-charities-oppose-plans-for-coire-glas-hydro-project/

Noting the impact on woodlands from the additional transmission network components (which wouldn't be needed in all cases). It's very expensive to put stuff underground (part of the reason HS2 costs have spiralled and why Viking Link to Denmark is going to cost a lot per GW of interconnected capability more than Greenlink to RoI) and some people don't like 'ugly' energy infrastructure in their own backyard yard, or even the 'building' process of a lot of heavy machinery and workforce using their usually very quiet, often inadequate for heavy machinery, roads.

and this from Dec 2013, mostly to show that that was 9yrs ago!!! It wasn't just the lack of a pricing mechanism that caused 9yrs (and counting) of delay. As they sometimes say in Brussels "nothing is agreed until everything is agreed" (and everyone is happy assuming you need unanimity to proceed) and if there is one appeal from one 'stakeholder' (eg NIMBY environmentalist group) then they can delay everything and/or add costs by delay but also by 'offsetting' measures.

euanmearns.com/the-coire-glas-pumped-storage-scheme-a-massive-but-puny-beast/

The second link also covers some of maths that I might get into later. I'll probably use 5days rather than 7 and look at the entire 'plausible future' Scottish network. Wind is intermittent and there is a fine line between oversimplifying probabilities and still ensuring people understand the point being made (and recent experience has again shown that the main point is often ignored). The above link is misleading (biased?) as you don't need all the 'short-term' storage to be able to supply for 7days (or for only 52/2 = 26 cycles per year) but.. well.. more on that later if I have time and can hit the sweet spot of 'simple' but still comprehendible. 

NB I'm not against local objections and do think there needs to be 'due process' that considers local impact but the time is currently takes should IMO be sped up and we can't 'assume' that any polity will proceed with everything that we hope (noting that whilst NG ESO 'operate' a 'one -nation' grid then they do not own the Scottish grid and that major infrastructure projects are 'complicated' by the messy devolution of which government/council has to agree to different things)

[Mr Poppy]

Feb 7, 2023 22:39:19 GMT alec said:

Hmmm....quite hard to actually understand the recent posts due to the confused writing, but I get a horrible feeling someone is confusing the price paid to generators for producing electricity with the capacity charges paid to the operators of the interconnectors for transporting the electricity - very different things! The idea that the interconnector owners could achieve their guaranteed minimum income with only 372 hours operation a year ought to have given the game away, and £50,000 per hour to use a 500MW cable at max capacity, given the capacity market parameters, is a stretch, but as I say, it's a pretty hard set of posts to understand, as ever.

Actual maximum capacity charges for all the current UK interconnectors are fixed for 23/24 by BEIS at a maximum of £75/kW/yr under the Capacity Market Auction Parameters, which works out at about £8.56/MWh, so the numbers themselves are a little fanciful, even for a fun illustration.

There may also be some misunderstanding as to what the PRICE floor and cap represents, as the floor is obviously not the minimum you would pay, it's the maximum (assuming we're talking about National Grid here, which isn't entirely clear, it must be said) and isn't anything the interconnector operators would pay anyway (it's their guaranteed income).

Not for the first time, it all seems a bit confused, it must be said.

I have asked Alec to correct the above himself and included Mark (who seems to be busy in the Real World) in the 'message' (private chat) discussion to avoid breaking Mark's rules, getting myself banned (again), or risk dragging this thread into the cesspit (as briefly happened over the weekend). Alec has said he doesn't think his reply (which broke Mark's rules yet again) has errors, even though I have given him a huge nudge with a % put in bold large font in a previous post and mentioned to him again in private. 

So... I've highlighted the /kW/yr and PRICE as that is where he has... well... I did post the actual REVENUE floor/cap agreements (which are NOT the same as 'price per unit') so folks can decide for themselves what has put on display once again by the person that Mark has asked me to ignore (but Alec has given me permission to reply, hopefully meaning Mark doesn't now ban me for breaking his rules)

IMO the Scottish discussion would be vastly more interesting (and should please the SNATs.. well after 2030 at least) so perhaps someone else would like to 'correct' Alec (and I've dropped so many 'hints' in this/previous posts and actual Ofgem links already that it won't be difficult)

NB One final 'hint'/point (perhaps not obvious to those who don't understand how the 'pricing' of electricity works). The price of electricity depends on which part/location of the supply chain you look. Part of the reason UK electricity is often more expensive than say France (less often with their nuclear issue) is due to (and I'll simplify it) 10% (Jan'23 rounded) of our electricity needing to cover the 'arbitrage' profit of an interconnector (EG simplified purely for illustration, the actual numbers are higher: £100* 90% + £200 *10% = £110 with the £200 'import' bit not being just what EDF get paid for the nuclear bit, or what has been happening more recently, Germany being at the end of the chain burning cheap+dirty coal - NO, the inteconnector company(ies) get paid for 'transport' across different national geographies)

The final point is very simplistic as the 90% bit is more complicated as well but I hope people aren't 'confused' by pricing and make sure to include the 'geographic' or 'temporal' storage 'costs' (which are revenues for the supplier thereof) when they talk about the 'price' that NG actually pay for electricity on the GB grid. That is expanding on what I did say previously: "The price of using the interconnector is NOT the same thing as the market prices that create the arbitrage."

[leftieliberal]

Feb 9, 2023 14:09:24 GMT Mr Poppy said:

Feb 9, 2023 13:29:53 GMT leftieliberal said:

The Strathclyde University papers I have previously cited such as here ukpollingreport2.proboards.com/post/438/thread don't assume the building of new dams or the enlargement of existing upper reservoirs so shouldn't really attract the opprobrium of NIMBY 'environmentalists'. There's probably some impact on fish stocks in the lower reservoirs, from the more rapid cycling of the water between the two, but that's about all.

We both want the same thing (more pumped hydro) but I'll post some links on the broader NIMBY 'environmentalist' objections (which I think miss the bigger picture but can not be 'assumed' to mean every project would get the 'green light' even if CON HMG for UK pulled their finger out)

Conservation charities oppose plans for Coire Glas hydro project
www.pressandjournal.co.uk/fp/news/highlands-islands/4477722/conservation-charities-oppose-plans-for-coire-glas-hydro-project/

The distinction is that Coire Glas is a new hydro project and so will need new infrastructure including transmission lines. The Strathclyde University proposals were for conversion of existing hydro-electric plants to pumped storage (effectively by fitting Francis turbines, like those at Cruachan, because these can be used for pumping water uphill, meaning that there is no need to bore extra pipes for the return flow). I would be interested to see if the Drax proposal for Cruachan gets the same opposition.