Covid19 has helped reduce Greenhouse Gas emissions, but the road to Net Zero is still a challenging one

I suppose, one of the few beneficial side-effects of the pandemic has been the welcome reduction in greenhouse gas emissions. An American report released this week declared that US GHG emissions fell 10.3% in 2020, the largest drop in over 75 years. Transportation accounted for a lot of this, but power stations saw the second largest decline.

The pattern is similar in the UK but dig deeper and the picture is more intriguing. Electricity consumption during Q3 2020 (Jul-Sep) increased over Q2 but remained low in comparison with the previous year. As a direct result of the Covid19 pandemic, electricity consumed by the industrial sector in Q3 fell by 7.3 per cent compared to Q3 2019, while consumption by other users (including the commercial sector) decreased by 7.9 per cent in the same period.1

These reductions seem surprisingly small given the drastic office closures created by the lockdown in response to the pandemic and the resultant switch to home-working for millions of people. The answer appears to be partly due to many businesses continuing to maintain their office operations, even though occupancy rates have been as at a fraction of normal levels. Heating, chillers, lighting, and lifts were all still on and consuming power, albeit at a reduced rate.

Unsurprisingly, domestic electricity consumption increased by 0.3 per cent in the corresponding period, generated by the needs of our new home-working army. These changing work habits have even succeeded in shifting the daily demand curve, by smoothing both the traditional early morning and early evening peaks. The Guardian reported that the overall demand for electricity could fall by 2.4GW on last winter as a result of these changing patterns and that the lower demand will give National Grid a 4.8GW “cushion” of extra electricity representing 8.3% of the total supply.

It seems that the pandemic may have inadvertently helped us, at a time when we are trying to decarbonise our energy supply chain. Unfortunately, there are many complex factors at play, the implications of which are only now becoming evident. In the UK, renewables are now expanding to be a much larger part of the mix, with offshore wind becoming a major contributor. National Grid ESO, whose role it is to balance supply and demand across the grid have a growing, uncomfortable reliance on this weather-dependent, intermittent source of supply. It’s a feast or famine kind of existence and a constant juggling act.

For example, during the summer of 2020, the drop in demand created by Coronavirus lockdown coincided with record availability of renewable energy and threatened to overload the power grids. Too much wind when it was not needed, meant NGESO paying for energy it couldn’t use to be constrained. And because storage technology is not yet sufficiently developed to solve the problem, wholesale prices fell through the floor, even going negative on a few occasions.

This winter, wind turbines generated 17.3GW on Friday 8th January according to published figures, with high wind speeds boosting wind power’s share of the electricity mix above 40%. A few days later, an anticyclone over the UK brought bright skies, cold temperatures and light winds. These conditions were a recipe for an energy shortfall because energy demand for heating increased at a time when output from wind turbines slumped. Add to this some technical problems with the interconnector to Holland and maintenance to a conventional power station, and NGESO was left with few alternative sources available to meet the demand.

In situations like this, the answer has been to call on alternative generation from traditional coal and gas (accounting for up to 60% of production during some days in January 2021), local diesel and biomass generators and commercial banks of batteries. Many of these options are far from green, as well as being expensive. At the turn of the year, this sort of minor crisis resulted in price spikes in the electricity wholesale market in excess of £1,000/MWh.

Price volatility it seems, is becoming a fact of life, as are the numerous Electricity Margin Notices that have been issued by NGESO in recent weeks – something that would have been a once-a-year event historically.

So, what’s the answer?

The challenge of filling the gaps between peaks and troughs of renewable output could be resolved by greater adoption of Demand Side Response (DSR). As I’ve already mentioned, one option involves increasing supply by turning on local power generators to provide a short-term fix, but a greener and more attractive alternative lies in turning down demand. This is the solution offered by Aggregators such as OakTree Power.

This kind of DSR is quiet, carbon free and now accessible for the first time to many UK organisations with medium and large sized buildings. Through working with an Aggregator such as OakTree Power, it’s possible to tap into the building’s Flexible Load and adjust electricity consumption a small amount, for a short period of time, when critical power fluctuations occur on the grid.

OakTree Power aggregates these ‘adjustments’ with those of other clients to create a “chunk” of energy reductions which is of value to the grid operator and something for which they are willing to pay. OakTree Power continuously scans the balancing services markets looking for the most lucrative opportunities to sell its customers’ Flexible Load in this way, effectively ‘stacking’ revenues across multiple markets and generating income streams for its clients. Of course, as a direct consequence of managing these energy reductions, you are also reducing carbon emissions in these buildings in direct proportion.

OakTree Power pays for the installation of the technology needed to carry out the DSR “events” and shares the revenue stream with each client in a gain-share model. Benefits begin for modest-sized commercial buildings of 40,000 sq. ft, for whom a new revenue income of over £12k a year and a 180,000 Kg reduction in carbon emissions can be obtained.

Although we will quadruple the number of new wind turbines being installed in the next ten years, they will still be weather dependent, and nothing is coming on stream to replace the fossil fuelled power stations which provide most of the balancing cover when wind conditions are poor. DSR therefore needs to be adopted at scale over the next couple of years if we are to avoid potential power cuts at times of peak stress.

1 Dept for Business, Energy and Industrial Strategy

Scott Petersen