Britain will continue to need large, flexible power plants to balance the grid and meet peak demand, according to the chief executive of Drax, as reported by the Financial Times. Their view should come as no surprise. After all, Drax operates Britain’s biggest power plant, with a combined 4 gigawatts of coal and biomass-fired units.
But is it true? An electric grid increasingly dominated by variable renewables such as wind power will need flexibility, including in both demand and generation, and a well-functioning transmission system.
But this has nothing to do with power plant size.
Take Denmark’s small combined heat and power plants (CHP), which flexibly respond to wind generation, using their ability to convert excess power to heat, as described in a report we published earlier this month, at the Institute for Energy Economics and Financial Analysis (IEEFA).
Denmark embarked on an energy transition in the 1980s. It was at this time that heating and electricity supply were integrated. Today, half of all Denmark’s electricity, and two-thirds of its heat is produced by CHP plants.
These plants feed into district heat-supply networks that include large water tanks for thermal energy storage. The system was designed with flexibility in mind, to achieve a varying proportion of heat and electricity output, and heat storage. Today, that means CHP plants can optimize their output according to changes in wind output, and thus provide balancing services. Many of these CHP plants are fueled by biomass, which thus provides a long-term pathway for balancing variable renewables like wind and solar with a non-variable but still-renewable resource.
Since 2006, all CHP plants above 5 MW have been required to settle at market prices (e.g. rather than via long-term bilateral contracts), which means they are now incentivized to respond to wind output. At times of excess wind generation and low power prices, they will bypass their steam turbines to produce heat exclusively. When prices recover, they can quickly switch back into a co-generation model, producing combined heat and power. The approach works seasonally, as wind power surpluses and grid constraints can be greater in winter, when heat is also more in demand, thus incentivizing CHP units to consume cheap excess electricity to produce heat.
Wind power now accounts for more than half of Denmark’s total net generation – making it the world leader. But thanks partly to CHP – as well as the country’s excellent cross-border interconnection – it also has stellar security of supply.
Chart. Denmark – Domestic Electricity Generation by Source (GWh) & Wind & Solar Market Share (%, through November 2017)