New Power editor Janet Wood thinks National Grid may have put another nail in gas’s coffin
Who would be a gas generator? Despite the ejection of coal plants from the generation stack (and good riddance, I say), gas has got less and less of the wholesale energy supply market. It has been squeezed out between our growing renewables portfolio and the floor provided by nuclear, and it is increasingly missing out on lucrative high-priced periods because of the addition of gas engines and storage.
The situation has not been fatal, although it has certainly prompted a few closures, pushed along by the suspension of the Capacity Market as well as other uncertainties like the cost of carbon or of transporting gas.
Gas operators have survived by finding a new niche as the industry’s ‘go-to guys’. Balancing? Frequency response? Black start? Inertia? Gas operators have looked at their large rotating machinery and said “we can do that”, making scarcer energy revenues just a part of the mix of income.
What must have come as a very unwelcome shock is the news from National Grid that it wants to be able to operate the grid with all those services from other sources – renewables, storage, demand side response etc – at times when demand is covered by low-carbon generation. The newly independent Electricity System Operator has set out a road map to develop the necessary markets for ancillary services and it is aims to reach that goal by 2025.
What’s the problem? For all that gas plant have done to talk up the flexibility they can bring to the system, the fact is that they are not best placed to do it. They have done an excellent job of running plant as flexible units, even though they were designed to operate best at baseload, and gas turbine manufacturers have responded with upgrades that will allow them to be operated more flexibly – Uniper will be carrying out such an upgrade at its Enfield plant shortly. But all that cranking up and down places extra stress on the plant and ages it faster – and a battery, or a wind farm feathering its blades, can ramp up and down much faster. In open markets for ancillary services, gas will often be beaten.
Of course, that applies only when the wind blows or the sun shines. At other times – at the moment – gas will have far less competition.
Where does that leave gas? Lobbying against interconnectors, being queasily hopeful that nuclear reaches the end of its life (and perhaps that new nuclear is further delayed), fighting it out for what’s left of those revenue streams and hoping for a still, cold winter. It’s a hard model to build a business on – and it makes a Capacity Market that pays those plant to stay on the system throughout long periods of inaction even more important.
Who would be a gas generator? Fewer and fewer companies, is my guess.
Janet Wood is editor of Energyst Media-owned New Power. The subscription magazine provides in-depth insight into the energy market, delving deeper into key challenges and opportunities. It is essential reading for all those with an interest in the energy sector.
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I am sure your ear is being bent by the CCGT people, who are always looking for ways to get more money out of the National Grid.
This issue came up in Ireland in 2007 and I was then working with European Technology Ltd in giving advice to the Northern Ireland Regulators on extra running and maintenance costs.
My interest in this matter went back even further to when I helped set up the first conference specifically set up to look at plant cycling. Although the conference was held in London, its main sponsors were the American DOE and EPRI.
I am now retired but keep a close watch on what is happening to the British and Irish systems. Both have been transformed by the almost complete run down of coal, the massive increase in wind, and the fact that gas fuelled CCGTs are the mainstay of the systems in both countries.
Contrary to your assertion, the fleet of CCGTs can respond far faster than the combined variation in wind, and the change in demand. Wind energy does not rise or fall at a fantastic rate in a few hours.
A few years ago I thought that CCGTs would find it difficult to cope with frequency changes, especially when they are dropping because of excess demand. But it looks like operators have got to grips with this and my impression is that they stick very close to 50Hz these days.