Two pushbacks I often receive when talking to investors about renewable energy are that a) it is expensive, and b) it can’t be relied upon and is entirely dependent on the vagaries of the weather.

The first of these is simple enough to counter, as the question usually arises as a hangover from days past, when renewables were indeed more expensive than fossil fuel-based electricity generation. Historic subsidies on older assets continue to be paid, having a present-day cost which adds to the confusion. However, technology advancements together with increased scale, mean that new renewables are now very cost competitive methods of generating electricity. In most places in the world renewables now have a cost advantage, and in areas with strong solar resource, it isn’t even close.

The second of the pushbacks is, however, a valid argument, and I am always surprised by how many people, having little working knowledge of German, know the meaning of the word “Dunkelflaute”. Wind, solar, and hydro generated electricity are indeed dependent on the weather, which can be very variable, particularly in the short term.

So here are six ways that the UK’s energy sector is going to solve the problem of renewable intermittency during the energy transition.

1. Wind generation will become more reliable

A widely used term in the electricity industry is “load factor”. Essentially this converts the number of hours of generation achieved in a year, by the total number of hours in a year. So, if we had perfect wind conditions 100% of the time, a wind farm could be expected to generate at 100% of its maximum theoretical output (ignoring down time for maintenance or unavailability of the grid), achieving a load factor of 100%. Of course, this is impossible, however, the higher the number, the lower the variability of the generation output.

Based on data from the Department of Energy Security and Net Zero, the average load factor for UK onshore wind in 2022 was 27.4%, and 41.1%¹ for offshore. The offshore wind farms currently under construction can be expected to be even better, utilising larger turbines for better performance. For instance, SSE expects its Dogger Bank project to generate at an average load of 57%². In 2022, offshore wind comprised 13.8% of total UK electricity generation, and onshore 10.8%¹. The vast majority of future capacity is likely to be installed offshore, and with a consequent increase in load factors, the variability of wind generation will be much reduced.

2. More solar coming

One of the wonderful things about some renewable energy technologies, is that their outputs can be negatively correlated to each other. In the UK, wind generation is strongest in winter, and solar in summer. Having a better combination of the two therefore reduces the overall variability of renewable generation over the course of the year.

The UK makes relatively little use of solar, with only 4.1%¹ of total UK electricity generation coming from solar in 2022, versus almost 25% from on and offshore wind as we show above. It is however growing fast, with a 10-fold increase over the past 10 years (over twice that of wind). With the costs of solar continuing to fall combined with the ability to site panels on commercial rooftops close to the location of demand, we can expect solar generation to continue its strong growth, reducing the variability of renewable production over the course of the year.

3. The expansion of short-term storage

Much of the intermittency problem is short term in nature, with peaks in demand, in early evening for instance, not being matched by available supply. Battery storage is ideal for this sort of mis-match between supply and demand, and typically operates on a short-term basis with 1 to 2 hour durations in the UK (although I have seen projects being developed to provide up to 5 hour storage durations elsewhere).

Lithium battery storage can be built relatively cheaply following sustained falls in costs in recent years. It also has the advantages of a rapid response, being able to inject power into the grid almost instantly when required, making it valuable for ensuring the stability of the grid. Like renewable energy projects, batteries are scaling up. Individual assets are now typically 50 to 100 MW in size, compared to 10 to 20 MW relatively recently. This is an area of rapid technological development.

4. The expansion of long-term storage

There will of course be times when a general shortage of renewable generation, or a spike in demand during a period of cold weather, means longer duration storage is required. The UK currently has 2.8 GW of pumped storage hydro, which operates by pumping water uphill from a lower to an upper reservoir during times of surplus electricity, and letting it flow back down again through a turbine when there is a shortage. To put this into context, peak UK power demand is around 60 GW.

These plants can produce a combined 32 GWh of electrical energy, which works out at 11 hours of full capacity generation. There are plans for the expansion of the UK’s pumped storage capacity to reach 6.9 GW, with 135 GWh of potential generation³.

Other forms of long-term storage are being developed. Using salt caverns to hold compressed air, which can be released through a turbine to produce electricity, would be a good example.

5. Natural gas backup plants

Currently, natural gas generation acts as the swing generator, dialing its output up and down depending on the level of renewable output. As more renewables come on line, the average generation from gas plants will naturally fall. The problem here is that UK gas fired power stations operate on a “combined cycle” (or “CCGT”) basis, burning gas in a turbine engine, with the waste heat being used to generate further electricity through a steam turbine. CCGT’s are relatively expensive to construct but efficient to run, and are designed to work at high generation loads. They are not designed to act as flexible backup capacity.

A better option is open cycle gas generation (“OCGTs”) which do without the steam generation cycle. In this way they are much cheaper to construct, but less efficient and therefore have higher generation costs when called to run. The simple design, fast ramp up to operating load, and lower operating costs of OCGTs make them ideal for acting as reserve capacity, generating at peak demand times, or times of low renewable resource.

Drax Group are currently constructing three OCGTs, each of 300 MW, which they expect will cost £100 million each, or £330,000 per MW of capacity⁴. In comparison, offshore wind construction costs vary depending on sea depth, distance from shore etc., but are currently in a range of approximately £2.5 million to £3.5 million per MW of capacity. In other words, building an additional MW of OCGT capacity for each MW of offshore wind, would only add about 10% to capital costs.

In practice, battery and hydro storage is to be preferred as it allows for the storage and subsequent release of renewable energy, whereas OCGT’s produce carbon emissions, and only solve the problem of too little renewable generation rather than too much. However, new OCGT’s will undoubtedly have a role to play in providing insurance against (hopefully infrequent) sustained periods of low renewable output.

6. The benefits of interconnection

The UK has several high voltage transmission lines to neighbouring countries, including Ireland, France, Netherlands, Belgium, and Norway. In addition, the world’s longest interconnector, the Viking Link running for 475 miles between the UK and Denmark, was switched on in December 2023. In total, the UK now has almost 10 GW of interconnection capacity. Substantial new interconnectors are planned for later this decade, to both France and Germany, which would add over 4 GW of additional capacity⁵.

Interconnectors allow the transmission of power from countries with surplus generation to countries with a deficit. For instance, the UK, which usually imports power from France, exported power to France in 2022 when French nuclear generation was curtailed.

By sharing surpluses and deficits, the risks to the whole are much reduced. In addition, it allows the principal of comparative advantage to work for the mutual benefit of all parties. Spain, for instance, is well placed to expand its solar capacity, with high irradiation levels and ample land. Interconnections allow power to flow North through France, enabling other countries to benefit from Spain’s advantages in solar generation, while providing Spain with a valuable energy export. Likewise, in winter, excess generation from North Sea wind can be transmitted to Southern Europe when their solar resource is at its lowest.

¹Data source: UK DESNZ / National Statistics
²Data source: SSE
³Data source: British Hydropower Association
⁴Data source: Drax June 2023 interim result
⁵Data Source: OFGEM website