On March 9th, the UK’s Climate Change Committee concluded that the UK could meet its electricity needs in 2035 and 2050 with a mixture of renewables, nuclear and what it calls ‘low-carbon dispatchable generation’, plus a small amount of unabated natural gas.[1] It made its positive assessment by studying typical and extreme weather patterns in the past. It then calculated whether the possible portfolio of wind, solar and nuclear envisaged by government targets would generate sufficient power, if combined with some combination of storage, natural gas with CCS, and hydrogen. The conclusion was that the transition is possible, even alongside a 50% rise in electricity consumption by 2035 and a doubling by 2050. But it also said that the current pace of installation was insufficient to meet the targets for decarbonisation.

I wrote some comments in the note below, including a query as to whether the enormous cost (and difficulty) of electricity transmission upgrades is being fully considered. Extra infrastructure may double the cost of the new electricity generation capacity.

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Many energy commentators reacted with enthusiasm to the CCC’s work. The report was seen as a strong signal to the UK government, and to the many sceptics, that a renewables-based system can - very largely - drive unabated natural gas off the country’s electricity grid. And it is indeed a very impressive piece of analysis; its workings are detailed without being obscure.

For the first time, the CCC sees a potentially large role for hydrogen as the key balancing energy source in the electricity system. When the wind is blowing hard, surplus power will be sent to electrolysers where it will be turned into hydrogen. The hydrogen will be stored in salt caverns beneath the ground and combusted in gas turbines when the wind is still.

The CCC leaves the precise size of the hydrogen contribution unclear, saying that the cost compared to natural gas with CCS is not certain. So it merges abated gas and hydrogen into ‘low carbon dispatchable generation’ without being wholly specific about the share of hydrogen. It is also ambivalent about the role of electrolysis versus autothermal reforming of natural gas to make the product.

Nevertheless, for those of us who have been pushing the importance of hydrogen for storage of electricity for several years, this is an important moment. The language of the document is entirely different from a previous 2018 CCC report on hydrogen which concluded

‘the low overall efficiency of electrolysis and the relatively high value of using electricity as an input mean that the costs of producing bulk electrolytic hydrogen within the UK are likely to be high.’[2]

That language has now completely changed with an acceptance that the role of hydrogen is to take electricity at times when power prices are very low and store it for periods when prices are high. Table 3.1 in the recent CCC report gives a figure of just £22 per megawatt hour for hydrogen production for 2035 (but in 2012 prices).

The world’s most respected climate agency has given the argument for ‘renewables plus hydrogen’ a good chance to break through into the policy mainstream.

Let’s briefly look at the key aspects of the work. This is not to question the main thrust of the conclusions but to examine their implications.

1, The report essentially uses government targets for renewables installations as the basis of its figures. The figures for new capacity are not independently generated.

By 2030, the UK plan is to have more than 50 GW of offshore wind, compared to about 15 GW today. That means an installation rate of about 7 GW a year, a demanding target. But the CCC appears to use the 50 GW 2030 target as its estimate of 2035 capacity.

For onshore wind, the CCC is much less bullish, assuming 28 GW in 2035, up from about 13 GW today. The implied installation rate is less than 2 GW a year. Even this is probably unlikely unless the UK government reverses its effective ban on onshore wind in England and Wales. Scottish development isn’t sufficiently fast. Solar rises by about 55 GW before 2035, up from about 15 GW today. The estimates for 2050 requirements are 115 GW offshore, 31 GW onshore and 105 GW of solar.

2, Because this is the stated government view, the critical assumption that the CCC has had to run with is that new nuclear will become an important part of the UK’s portfolio. By 2050, the estimate used is for 24 GW of operational nuclear, which will cover about a third of the UK’s total electricity need. 10 GW is assumed to be available in 2035.

Is this likely? No, it is not. Sizewell B will probably decommission that year, the last existing nuclear plant in the UK. Hinkley Point C, possibly to be completed mid-decade, has a capacity of 3.2 GW. So two more new nuclear plants will needed in the next twelve years. One has to be a blind optimist to believe that this is possible. And, of course, the price will probably be more than twice than that for wind or solar.

The likelihood is that the UK will construct no more than a couple of new nuclear plants. The key implication is therefore that we will need more wind and more solar than the CCC says. Very roughly, the likelihood is that instead of 115 GW of offshore wind, about 150 GW will be needed. The key effect on the CCC’s arguments is that because wind is variable, the amount of hydrogen capacity needed for storage will be much more than they predict.

3, The CCC does not extensively deal with the interaction between the EU energy markets and those of Great Britain. This is important, but is unfortunately typical of most official documents across energy and other policy areas. Yes, there is mention of electricity interconnectors but it seems to be assumed that EU countries will accept a large portion of GB surpluses. This is unlikely because at times of UK high winds, most of northern Europe will be similarly harvesting overwhelming yields of electricity. As I write this on Monday 13th February, the UK’s wind is providing over 20 GW of power, while in Denmark turbines are currently giving more to the Danish grid than the entire national electricity consumption.

The modelling behind the CCC work appears not consider this problem, perhaps because of an assumption that other countries will not invest as extensively in new wind capacity. But, for example, the Netherlands government has a target of 70 GW of offshore wind by 2050, a figure that would provide almost three times the current Dutch power needs over the course of the year. Netherlands producers will be wanted to export at exactly the same time as UK wind farms. As far as I could see, there was no mention of this in the entire CCC report. Other northern European countries also have major (and well-documented) strategies to expand offshore wind.

4, There are similar problems with the discussion of hydrogen interconnectivity. Although there is mention of pipelines in the CCC report, there seems to be an absence of consideration of the effect of the development of a full European hydrogen network. Moving energy around in pipelines, even over several thousand kilometres, is very much cheaper than using electricity networks. (There is a good reason why UK domestic electricity bills have a charge of transmission and distribution that is four times the fee for gas per kilowatt hour!). If we need more hydrogen, the cheapest way to get it will probably be through the proposed EU pipeline system, probably partly fed from northern European wind and hydro and north African solar. The UK energy system – both electricity and hydrogen – will almost certainly be very much more tightly integrated with Europe than the CCC suggests. Once again, one presumes this is because wider UK government policy does not want to acknowledge the utterly central role of links to the mainland (and Ireland) in our energy policy.

5, The CCC mentions extensively, but does not fully quantify, the striking requirements that the UK has to improve its electricity transmission and distribution systems in order to make the ‘renewables plus hydrogen’ transition possible. This issue needs urgently to be bought to the forefront of our discussions. As with many other European countries, the development of new electricity resources, and the electrification of heating and transport, is being impeded by the lack of capacity in both high voltage and low voltage segments. The unrecognised reality is that upgrading our infrastructure may cost as much as the whole of the extra renewables installations in the period to 2050. And, unfortunately, much of the required investment will have to be made well before the new capacity comes on line. Which will mean businesses and families paying for the full transition soon, and before the majority of the benefits show. By the way, this problem affects most other advanced countries as well.

The tables below show some indication of the scale of the challenge facing supporting infrastructure by comparing the cost of new renewables to the cost of new electricity transmission and distribution. I have had to use estimates for many of these calculations but I think they are broadly correct. My logic is in the appendix below.

The cost of new renewables to 2050

a) Offshore wind at £1.5billion a gigawatt = £150bn

b) Onshore wind at £1 billion a gigawatt = £18bn

c) Solar at £0.5 billion a gigawatt = £45bn

Total = £213bn

The cost of supporting infrastructure

a) Distribution networks (i.e. DNO spend) = £60-180bn (source page 66 CCC report)

b) Transmission network (i.e. ESO spend) =

· Offshore wind at £0.6 billion per gigawatt = £60 bn

· Onshore wind at £0.3 billion per gigawatt = £5.4bn

· Solar at £0.2 billion per gigawatt = £18bn

Total = £143.4 - £263.1bn

Under some projections, the cost of infrastructure upgrades to allow full use of renewables will therefore exceed the cost of the installations themselves. The unfortunate implication is that the Levelised Cost of Renewables infrastructure may approximately double the cost of the electricity produced by these installations. That is a very tough conclusion for those of us who want a rapid transition.

Appendix.

The cost of renewables is taken from recent figures published about very large scale projects, slightly reduced to take into account likely cost cuts over the next decade.

The cost of distribution (essentially the low voltage networks that take power to buildings) is taken from the CCC report.

The cost of transmission infrastructure is calculated from a recent Ofgem estimate that the cost onshore of putting 50 GW offshore in place by 2030 is about £21bn. See the summary by lawyers CMS at https://cms-lawnow.com/en/ealerts/2023/01/accelerating-onshore-electricity-transmission-investment-a-step-forward-for-low-carbon-generation.

Onshore wind and solar will require less investment in transmission per gigawatt. Many schemes will actually connect to the distribution system, not the National Grid. I have roughly estimated a figure of £0.3bn per gigawatt for wind and £0.2 per gigawatt for solar based on the offshore numbers.

[1] https://www.theccc.org.uk/2023/03/09/a-reliable-secure-and-decarbonised-power-system-by-2035-is-possible-but-not-at-this-pace-of-delivery/

[2] https://www.theccc.org.uk/publication/hydrogen-in-a-low-carbon-economy/