Opinion
Study reveals low cost of integrating
solar into power system
new report for the Solar Trade
Association (STA) for the first time
quantifies the cost of integrating
solar into the UK power market,
both today and in a 2030 scenario where solar
provides over 10% of annual UK electricity.
Concerns are sometimes expressed about
the variability of solar power (which generates
according to daylight intensity) imposing costs
on the system; the need for ‘back-up’ is cited
as a disadvantage of solar power by critics of
renewable energy. There has been uncertainty
about what these costs are today and will be
in the future. However, the Aurora analysis
shows that today the cost of integrating solar
into the power system, including ‘back-up’, is
negligible at only £1.30 per MWh, or less than
2% of the costs of solar today.
STA Chief Executive Paul Barwell said:
“The tremendous growth in local, clean
generation has challenged the old power
supply model. Yet Ministers can be reassured
that the rapid expansion in solar power over
recent years has been absorbed efficiently and
affordably by the system.”
The research shows that more than
tripling solar generation to 40GW (over 10%
of annual UK electricity) would increase the
costs of managing variability modestly, to a
maximum of £6-7 per MWh.
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This clarity on the costs of integrating
large volumes of solar, together with further
expected cost reductions in solar installations,
supports the STA’s and other analysts’
expectation that solar can be the lowest cost
form of energy generation in the 2020’s.
However, strikingly the modelling shows
integrating solar into a more decentralised,
flexible, ‘smarter’ power system, including
batteries, actually delivers more benefits than
costs to the system. High battery penetration
combined with high solar penetration reduces
the cost of variability by £10.50 per MWh,
resulting in a net £3.70 per MWh benefit. This
is because solar combined with batteries
allows output to match demand requirements
exceptionally closely and requires only a small
amount of back up.
The report also evaluates the portfolio
effort of combining solar and wind in the
energy system. The model follows the ‘High
Renewables’ pathway set out by the Committee
on Climate Change as a generation mix
consistent with the UK’s 2030 carbon budgets.
This requires 40GW of solar and 45GW of wind,
enough to power 55% of the UK’s electricity
system in 2030. The cost impact of solar on the
system falls by 25% in this scenario.
Dr Benjamin Irons, a Director at Aurora
Energy Research and lead author of the
report, said: “Recent spectacular technological
progress in renewable power generation puts
the promise of cheap, low carbon power within
reach. The challenge of integrating large
volumes of renewables into the network in a
way that provides reliable power to consumers
and an attractive m arket for complementary
generation technologies is the ‘last frontier’
in delivering the power system of tomorrow.
Our analysis shows that such integration is
possible and surprisingly affordable: the UK
could more than triple the amount of solar
power on the system by 2030, with associated
costs of integration and back up so low as as
to be dwarfed by the enormous cost savings
anticipated from falling solar prices over the
same period.”
Angus MacNeil MP, Chair of the
Common’s Energy and Climate Change
Committee, said: “This welcome research puts
numbers and maths behind the variability of
solar power. It gives a concrete understanding
of what solar has to offer compared to other
technologies. Combined with reducing capital
costs solar is going to be as cheap a source of
power as you’ll find anywhere.”
Lord Adair Turner, Chair of the Energy
Transitions Commission, said: “Aurora’s
report confirms what an increasing number
of analyses are now telling us – that we can
build electricity systems with high shares of
renewables such as solar and wind, using lower
cost batteries, other storage technologies and
demand management to deal effectively with
intermittent supply. We should not be holding
back from further renewables investment out of
fear that we can’t keep the lights on.”
Paul Barwell, CEO of the STA,
added:“Britain is concerned about its
international competitiveness as it exits the
EU and moves to ratify the Paris Agreement on
climate change. The good news is backing solar
power, the UK’s most popular energy technology,
looks set to enhance UK competitiveness – so
there need be no trade-offs.”
The variability cost of integrating 40GW of
solar is further cut by 55% to £3.10 per MWh if
Hinkley C isn’t replaced, because the inflexibility
of nuclear power also imposes costs and
reduces the economics of flexible generation.