Decentralisation is one of the three D’s for the future of low carbon energy sectors. It sits with decarbonisation as another factor driving smaller scale renewables generation, and digitisation, potentially enabling more localised control. But how much does the future lie with smaller local systems? Will a centralised National Grid remain at the core of the power sector? And will there be a resurrection of the prospects for localised combined heat and power schemes?
One organisation pushing a
decentralisation agenda is the Association for Decentralised Energy (ADE).
However their recent
report makes some extravagant and misleading claims about the waste
of energy in the “centralised” and “legacy” power systems that the UK currently
enjoys. The report implies easy routes to eliminating waste, implicitly through
combined heat power (CHP) schemes.
“Inherited from the public
system of the 1960s and 70s, less than 10% of UK power stations currently
recover waste heat, and this represents a missed opportunity to save £2 billion
annually.”
The apparently obligatory
deference to supposed virtues of the UK privatised power model, and the assumed
culpability of a distant public sector past, are contradicted by historical
fact. Almost all current power generation, both in renewables and combined
cycle gas turbines (CCGT), is from plant built after 1990, within a supposedly “market
driven” privatised power sector. About 2.1 % of November
2021 generation was from the nationalised industry “legacy” of
coal, and none is baseload.
Wastage and CHP
ADE adopt the rather tired and
misleading argument that electricity generation from fossil fuel “wastes” heat
energy, and that combined heat power, essentially a decentralised operation,
could therefore provide a substantial contribution to a low carbon economy,
with considerable cost saving and efficiency gain.
This subject requires some
understanding of the thermodynamic principles of energy and entropy. Not all
energy is "useful" in the thermodynamic sense of its availability to
perform real work (or even to heat homes effectively). “Waste” is an emotive
and misleading way to describe the truth that conversion from “low grade”
energy (eg coal) to something useful, like electricity, consumes energy en
route. An internal combustion (ICE) vehicle may “waste” 75 % of the fuel in the
tank but no-one imagines this waste heat is easily captured by the driver for
useful purposes[1].
(Switching to electric vehicles offers three times the notional efficiency at
point of use, but will of course incur upstream heat loss if from thermal
generation.)
Combined heat power (CHP)
schemes aim to make use of the heat content lost in fossil fuel generation to
improve the overall efficiency, either through use of high temperature heat in
industrial processes or lower temperature heat for buildings in winter. This is
a laudable aim but it has an increasingly limited economic or carbon reduction potential
for several reasons.
First, a
much more compelling case for CHP was made, but without much success, in the
1970s, when the best fossil generation had thermal efficiencies in the 35-40 %
range, and domestic gas boilers were about 60 % efficient. CHP offered
theoretical overall efficiencies of 80 % (before distribution). The 1990s development
of combined cycle gas turbine (CCGT) generation, with best in class
efficiencies of around 65 % in baseload operation, and domestic condensing
boilers with 90 % efficiencies, eliminated most of the theoretical cost and
energy savings from CHP.
Second, efficiency
claims for CHP systems were, even then, frequently overstated. Heat
is lower-quality energy than electricity, and only at high
temperatures does it become close to comparable utility. The number of such
high temperature applications is limited, largely to industrial process heat,
and was not helped by UK de-industrialisation. The more modest efficiency gains
with low-temperature waste heat use, with potentially wider application to
residential heating, carry heavy retro-fitting costs, and don't necessarily lead
to substantial improvement in overall energy use, due to lower thermodynamic
efficiencies, particularly if heat network and distribution losses are taken
into account.
Third, and most
crucially, a zero carbon economy requires rapid elimination of virtually all
fossil fuel use, starting with its use in power generation. Renewables such as
wind and solar, at whatever technical efficiency, do not in any case generate
“waste heat”. There may be a plausible future role for heat networks fed by smaller
scale modular nuclear reactors, but otherwise the potential for fossil-based
CHP schemes seems to be confined to a very few niche applications.
“The UK could save the equivalent
of £23 per household just by upgrading our electricity network's efficiency to
match that of Germany's.”
International comparisons are
often dangerous guides to reality. Losses in developed economies are a function
of geography and economic structure as much as efficient network management. A
casual inspection of energy statistics indicates that in Germany industrial
consumption is nearly double that of domestic, while in the UK the reverse is
true and domestic use exceeds industrial, reflecting the demise of much of UK
heavy industry under the Thatcher governments of the 1980s and 1990s. Since
heavy industry is almost invariably connected at much higher voltages, and much
larger percentage losses occur in medium and low voltage distribution networks,
Germany’s lower figure tells us little.
A good case can be made for
additional capacity investment to reduce UK network losses, and even more so to
support the stronger networks needed to cope with the big increase in
electricity’s role in a low carbon economy. Some of the network companies
regularly make that case, but of course investment has to be paid for, and loss
reduction does not therefore automatically lead to lower consumer bills.
Centralising or decentralising
factors in a low carbon economy.
The future balance between
decentralisation and centralisation requires a much more nuanced analysis. It
will of course be geography specific, but we can note a number of factors, in
the UK at least, tending towards centralisation and a strong transmission grid:
·
A high proportion of currently projected low
carbon sources of power are either intrinsically large scale, like conventional
nuclear, may depend on a substantial network infrastructure, like carbon
capture, or are remote from consumer load, with long transmission lines, and
require central coordination to exploit weather diversity, like offshore wind.
·
Inflexibilities or variabilities in output –
for nuclear or renewables – mean that larger interconnected, and inevitably to some
degree centralised, systems enjoy major advantages in reducing the cost of
reliable supply. Small systems, perhaps with a single source of renewable
energy, need interconnection. And the UK system benefits from international
interconnection.
·
The importance and relevance of energy storage for
power systems can accentuate the above.
On the other hand, there are forces
for decentralisation.
·
There is demonstrably an essential need for
much more consumer involvement in the operation of power systems. Low carbon
generation gives rise to much more complex needs, including the management of
overall demand with more sophisticated tariffs having a major role.
·
There is a plausible role for heat networks, as
one alternative to heat pumps, of which CHP associated with modular nuclear is
one possibility. These may be the more suitable option in some urban
environments. They require substantial investment in retro-fitting and communal
maintenance and strong local governance structures such as local heat
authorities.
·
Changing patterns of electricity generation and
use may create new and localised problems in the management of lower voltage
networks, so that more control, management and governance systems are required at
lower voltage levels, but without reducing the importance of the high voltage
transmission grid.
…………………………………………….
Some of these issues can be
explored in much more detail elsewhere.
The future of low carbon
networks. Heat networks. Enabling
Efficient Networks For Low Carbon Futures | The ETI
The future of consumer and
network tariffs in a low carbon economy. How
must energy pricing evolve in a low-carbon… | Oxford Martin School
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