Executive Summary:

• Clean energy has nowhere to go: the UK continues to produce abundant renewable power but have to pay wind farms to stop generating it
• The obvious answer is to build more grid infrastructure – but who would be paying for it?
• The debate, Jimish Patel, co-founder of AirPlus Renewables notes, should not be limited to how quickly the UK can build more pylons, cables and substations, but also asking how much electricity needs to travel across that infrastructure in the first place

Energy bills are firmly back on the political agenda. The Government’s decision to temporarily remove VAT from domestic electricity bills from October will offer some relief to households, but it arrives at the same time as another increase in the energy price cap.

That tells us something important about the problem we face. There are measures government can take to reduce the immediate burden on households, but making electricity genuinely cheaper over the long-term means looking at how our energy system works and, increasingly, where our electricity is generated.

When clean energy has nowhere to go

The UK is producing an increasing amount of renewable power, but we still regularly find ourselves in the strange position of paying wind farms to stop generating it.

The problem isn’t that the UK has too much wind power. It’s that the network doesn’t always have enough capacity to move that electricity from where it is generated to where it is needed.

A significant proportion of the UK’s wind generation is located in Scotland and other areas relatively far from major centres of demand. When transmission routes reach their limits, the National Energy System Operator (NESO) has to balance the network, which can mean reducing output from wind farms and increasing generation elsewhere.

The cost of managing those constraints ultimately becomes part of the cost of running our electricity system. Ofgem says balancing and system operation costs have increased as transmission constraints have grown and renewable generation has expanded faster than network reinforcement.

NESO is already looking at other ways to tackle the issue. Its Local Constraints Market, for example, has allowed consumers and businesses to increase electricity use when renewable supply is abundant in constrained areas, reducing the need to pay generators to stop producing. That approach is now being expanded nationally.

Building our way out

The obvious answer is to build more grid infrastructure, and the UK unquestionably needs to do that.

Ofgem has approved an initial £28 billion of investment in the UK’s gas and electricity networks, expected to grow to around £90 billion by 2031. It argues that expanding the electricity grid will ultimately reduce bills by allowing more renewable power to reach consumers and reducing constraint costs.

However, somebody has to pay for that infrastructure. Ofgem acknowledges that consumers ultimately fund network investment, while its latest price-control work is explicitly trying to prevent unnecessary upgrades being recovered prematurely through bills.

This is why I don’t think the debate should be limited to how quickly we can build more pylons, cables and substations. We should also be asking how much electricity needs to travel across that infrastructure in the first place.

Generate it where you need it

Producing electricity closer to where it is consumed would have the biggest impact on the UK’s energy landscape. A factory, warehouse, hospital or commercial building generating part of its own electricity reduces the amount it needs to draw from elsewhere. Multiply that across thousands of sites and decentralised generation can complement grid expansion by reducing some of the pressure being placed on the network.

Solar has already started to make this possible. Rooftops that previously served no energy purpose can now produce electricity for the buildings beneath them. Wind has the potential to extend the principle further, particularly because it can generate electricity at times when solar generation may be less abundant.

This is the thinking behind the EDGEWIND™ Tech we have developed at AirPlus Renewables. Rather than requiring the open, uninterrupted airflow associated with conventional wind turbines, it is designed to use turbulent and non-turbulent airflow around buildings and infrastructure. Our XEVA® system applies that technology in a compact, modular format, allowing organisations to harness wind energy closer to the point of use and complement technologies such as rooftop solar.

Reducing VAT, changing the price cap or providing targeted support can all make a difference to what people pay today. But, they don’t alter the fundamental challenge of producing renewable electricity in one part of the country and then relying on an increasingly stretched network to transport it somewhere else.

If the UK wants lower-cost, more resilient electricity in the long term, we need both modernised grid infrastructure and fewer reasons to rely on it for every unit of power we consume. Generating more electricity closer to the point of use is one practical way to start doing that.

About the author: Jimish Patel is co-founder of AirPlus Renewables. He founded AirPlus with a clear ambition: to rethink how wind energy can be generated and used closer to where power is needed. The company’s focus is the development of an ultra-efficient wind turbine technology designed to operate in both turbulent and non-turbulent wind conditions, creating the potential to generate renewable electricity in locations where conventional wind turbines are often less suitable.