New Thinking Blog: Energy Transitions and Technology Scale

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on Oct 14, 13 • posted by

New Thinking Blog: Energy Transitions and Technology Scale

Richard-Hoggett-blog-smallerEnergy Transitions and Technology Scale

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Last week it was reported yet again that the potential deal between the government and EDF for the UK’s first new nuclear plant was near, with a suggestion that a strike price of £93/MWh had been agreed. In the same week DECC put out an updated PV roadmap showing an ambition for up to 20GW of new capacity by 2020, with a new solar strategy due in 2014. These are two very different technologies, operating at different scales that have different implications for the way the UK could develop an affordable, low carbon and secure energy future.

An energy system in flux  

Our energy system is currently based on large-scale technologies, centralised networks for transmission and distribution, and supporting institutional frameworks. These have delivered economies of scale and reliability, but are prone to inertia and are increasingly struggling to deliver on the UK’s three goals for energy policy. A rapid low carbon transition is required, that is also affordable and secure.

Ticking these collective boxes is not straightforward, and there is uncertainty and increasing political and ideological battles over how best to do it. A range of low carbon technologies are available and it’s not clear which should have a major role within a changing system – keeping options open is central to the pathways, analysis and debate. Most projections and the independent advice to government from the CCC see a growing role for electricity because it is easier to decarbonise and can be provided through a range of technologies. However, the range of options also creates uncertainty; and this uncertainty increases due to other factors such as how the widespread deployment of new technologies might impact the energy system, given the interdependencies that exist between its component parts. Changing one part of the system, may have unintended consequences for other parts of the system. It is also not possible to predict with any certainty, issues relating to emerging technology or system innovations, including those relating to technologies themselves, networks, the operation of the system, and the wider rules, regulations and governance of the energy system.

All we really know with any certainty, given the latest evidence from the IPCC, is that we have to decarbonise quickly; at the same time we have to maintain the ability of the system to deal with shocks and stresses; and we have to maintain affordability and deal with fuel poverty. Much more policy attention is needed to balance the tensions between these objectives, and a good strategy would be to consider the range of options that are available in terms of their resilience, adaptability and flexibility – for both technologies and wider decisions that impact the system and its operation as a whole. Such an approach would give space to adjust policies to reflect new developments, as well as to deal with any unanticipated outcomes.

Nuclear vs PV

From a technology perspective, scale is closely linked to the above characteristics. Markets, technological interrelatedness and infrastructures which are large and complex tend to change slowly, whereas smaller scale technologies can show more flexibility and adaptability, and can quickly respond to changes within an energy system, and as such provide more resilience.

New nuclear could provide large amounts of low carbon power and would clearly fit into the current design and operation of the system. Its role in a system in transition is less helpful because it’s a large inflexible technology in terms of its operational profile. It is also not adaptable, showing very long development cycles, with around 30 years between each generation of reactor design. Once built its will be on the system for 60 years or more and it’s impossible to know how the system will change over this time. At best it’s likely to have a limited role in a changing system, at worst it could constrain other technology options, or system operational choices, as these will have to fit in around nuclear. And this extends into the wider rules, regulations and governance of the energy system, with nuclear reinforcing the status quo.

Costs can’t be ignored, not only is the playing field for the cost of nuclear uneven, in respect to learning rates, despite widespread deployment they are not falling – recent estimates suggest that prices over the last ten years have increased from $1,000/kW to $7,000/kW. Its role in providing affordable energy is therefore wide open to question.

In comparison, PV can be used at a range of scales and applications, is highly modular, and can be deployed quickly. Yes, it would take a lot of PV to match the output of a nuclear plant, and it is a variable source in terms of diurnal cycles and changing weather patterns, but its scale and adaptability are likely to be much more supportive of a system in transition. With developments in storage, this will only increase.

In terms of costs, PV has shown dramatic market growth and price reductions in recent years, with fierce competition and global overproduction resulting in significant and rapid price reductions. PV is now becoming increasingly competitive with electricity retail prices in many countries with new research suggesting it will soon need little or no subsidy.

Broadening policy attention

Neither PV, nor nuclear, can meet all of our energy needs, but considering technology options in terms of their flexibility, adaptability and resilience provides important insights. In a rapidly changing system it will become increasingly important to take decisions that take account of these characteristics. PV wins hands down over nuclear on these criteria as would many other renewable sources, reflecting the fact that they can be deployed at the macro, meso and micro levels; and are much more likely to enable the system, its operation, and governance to change. Reframing the debate around flexibility, adaptability and resilience could put the UK on a much clearer and realistic path to decarbonisation, security and affordability; something Germanyhas clearly understood and acted upon.


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