There’s a standoff near the beginning of the Coen Brothers’ Odyssey-based comedy/satire/musical O Brother, Where Art Thou? Delmar is offered two alternative futures by his two fellow chain-gang escapees, Ulysses Everett McGill, and Pete. As Ulysses and Pete stare angrily at one another, Delmar must choose which one to back. His decision is simple: “I’m with you fellas.”
So when the National Energy System Operator (NESO) presented the Department for Energy Security and Net Zero (DESNZ) with two alternative pathways to achieve clean power in Britain by 2030, there was precedent for Government’s response, issued last week. “Yes,” it said.
Many people will have searched the CP30 Action Plan for decisions one way or another on carbon capture, hydrogen, biomass and new nuclear. If you find them, please tell me, because I didn’t. DESNZ will have to resolve these, though as always in energy matters, some things are left to Treasury. In a break from previous form, we are encouraged to look to a specific date for answers from there. Expectations are laid on the Spending Review, by which they presumably mean the one due in spring 2025. But no matter how many pages Rachel Reeves adds, she won’t answer all of this.
Nevertheless, I do not characterise this as a failure to choose. Batteries, offshore wind, onshore wind and solar can all see the size of the technology-specific gaps which they must fill, in either pathway. These number ranges are not policy allocations; they are rational calculations of the size of the need. Even at the smallest ends of the ranges, they are huge, and they dominate both versions of the future. The biggest decisions are made.
At Flexitricity, we were looking closely for a statement of the ambition for flexibility offered by business and domestic customers. DESNZ now prefers the term consumer-led flexibility for this, and we have numbers on it: between 10GW and 12GW by 2030.
To be clear: this is not ten gigawatts of families sitting around candles in response to an email or a text from their electricity supplier. That is how the Demand Flexibility Service (DFS) was characterised by some; others (rather unhelpfully) called it “voluntary blackouts”. Either way, this is not about candles, which are neither cheaper, nor greener, nor safer, than electricity. The reason DFS never got near the gigawatts hoped for it is because it was launched rapidly in response to a fast-moving crisis, without the groundwork that would underpin an enduring service. Flexitricity has had minimal participation in it, despite operating a virtual power station topping 1.2GW in size. As we head towards 2030, consumer-led flexibility is not going to look much like DFS. Consumer-led flexibility will be dispatched electronically within limits set by the customers themselves, in response to the real-time needs of the electricity system and networks. It will be paid as a real resource through the same routes as everything else. That’s how we will deliver the double-digit gigawatts that both NESO and Government acknowledge we need.
We do need to know how the so-called dispatchable low-carbon generation options will fare. I sense a rough order of decision-making at least. Clearly there will be a mechanism for retaining unabated gas generation, which fits in the Clean Power 2030 picture to the extent that its operating hours remain low. This deals with dunkelflaute by providing 35GW of “strategic reserve”. Yes, Ed Milliband did use that phrase on Radio 4, but no, he wasn’t announcing the end of the Capacity Market. In fact, my bet is that a reformed CM will be the main means of paying for it. Somehow the CM will have to cover the fixed costs of plant which only run 500 hours per year, but there are enough economists in the industry to figure that out. That said, the document speculates about a “novel, out-of-the-market mechanism” for the longer term, which sounds a lot like strategic reserve.
Then comes gas with carbon capture. Teesside has already been nominated as Britain’s first carbon capture hub, the idea being that power generation and other industry can site themselves in close proximity, and share the pipe that will take their carbon dioxide out under the North Sea. CCS is going ahead; what is not known is scale. There will be one site at least. There may be more, and developments at the Teesside hub may go beyond gas power stations.
That brings us to hydrogen to power. The idea is to make hydrogen either by reforming methane (“blue hydrogen”) – you would have to do that close to a carbon capture hub because it leaves you with a lot of carbon dioxide to get rid of – or by electrolysing water using wind energy (“green hydrogen”) – the other gas you get from that is oxygen, which can be bottled and sold rather than being buried. Blue and green hydrogen are both just hydrogen, which you then store and turn back into electricity as needed. The best way to do that is also an open question: adapting existing generators to burn it takes investment, and it has to be transported to site. Fuel cells – the reverse of electrolysers – can do it at higher efficiency, but they’re still expensive.
The action plan observes that hydrogen to power might deliver its best economic performance at relatively low load factors. Not as low as unabated gas – more like 30% than 5% – but not baseload. Quite so: why would you want to burn hydrogen in a baseload power station? The whole point of hydrogen in this context is that you can store it and use it to respond to varying renewable output. If the hydrogen is green, there’s a double win: you can flex the electrolysers too.
Still, there is the question of competing uses for hydrogen. It figures in the decarbonisation options of many sectors, including heavy haulage, primary steel and high-temperature industries. A lot still has to be figured out, but some of the answers will emerge during 2025. Meanwhile, we at least have the National Infrastructure Commission’s conclusion on hydrogen for home heating outside industrial clusters: nope.
Finally, biomass, in the most general meaning of the term. This covers everything from biomethane (landfill and waste digesters) to solid biomaterials such as wood. At one end of the scale, you have an imperative to do something with biomethane that would otherwise have to be wastefully flared or disastrously vented. At the other, you have the very hungry caterpillar that is Drax. Anyone who makes it this far into the action plan will be pleased that the factors of note in bioenergy have been acknowledged. For the resolution of them, we must, again, wait.
Frustration is not the right response, however. Government has done two key things in this action plan. Firstly, it has made clear commitments to by far the biggest elements of either pathway: renewables, energy storage, infrastructure, and consumer-led flexibility at both domestic and non-domestic sites. And yes, consumer-led flexibility dwarfs carbon capture, hydrogen and biomass in both pathways. What the action plan says is that most of the gigawatts are coming from known places, and we’re getting on with them.
Second, for those of us who spend a lot of time on the small, gnarly details that make the difference between success and failure in all real-world efforts to green up the grid, the action plan is a 138-page Easter egg hunt. There’s a lot about the planning process, the fine details of Contracts for Difference, and community energy. There’s plenty about jobs, too – anyone at the start of their career should skip the first 121 pages and just marvel at the size of the skills gap that they could help fill. There’s clear commitment to smart meters and Ofgem’s frustratingly delayed Market-wide Half-Hourly Settlement project. And there’s this: “We will consult to remove external display requirements for device meters from the Measuring Instrument Regulations.” If you know how much flexibility that little nugget could release into the energy markets, you are a true geek.
Delmar, Pete and Ulysses set off in pursuit of a goal they didn’t understand (“you will find a fortune, though it will not be the one you seek.”) That is not our starting point. We know where we are going, we are experienced travellers, and we can see our way through. It is not easy to make decisions when everyone in the discussion is incentivised to talk their own book, but DESNZ now has a trusted expert, in house but with considerable independence, in the form of NESO. The sine qua non technologies are all proven and have scaled dramatically in recent years. The climate case is more obvious than it’s ever been. And CP30 is cheaper than the cost to Government and consumers of the recent energy price crisis, which wouldn’t have happened at all if we’d done Clean Power 2020. My response to Fintan Slye and Ed Milliband for their combined 222 pages of history-making Christmas epic? I’m with you fellas.