Renewable energy is being expensively wasted. Here’s how battery storage can fix that.

In 2020, more than 25% of the UK’s electricity was produced by wind farms. This is good news for decarbonisation, for energy security, and for electricity prices in the long term.

But between 2015 and 2021, the UK’s electricity system operator (ESO) curtailed, or discarded, over 13% of the total wind energy generated. In 2020 and 2021 curtailment was especially high, costing £806 million and wasting enough renewable electricity to power 800 000 homes.

So why is so much renewable electricity being curtailed? And how can we prevent this expensive waste of energy?

01. What is renewable energy curtailment?

In fossil fuel-dominated energy systems, balancing supply and demand is relatively simple. When demand rises, generators burn coal or gas, driving turbines and supplying electricity. This is why these energy systems are known as ‘synchronous’: demand and supply are synchronised.

With the transition to renewables, generation and demand are falling out of sequence. Wind farms and solar arrays are ‘non-synchronous’: their power production is driven by fluctuating weather patterns, rather than by when their operators decide to burn fossil fuels.

Often, renewables generate electricity in excess of demand. When this happens, the key challenge is how to harness that extra energy, sending it to places where demand is high, or storing it for still and sunless days.

At present, we don’t have sufficient network infrastructure to achieve this. This means that high levels of renewable generation put pressure on the grid, and sometimes even risk overloading it. At such times, the ESO safeguards the grid by paying generators to stop producing electricity. This drives up bills for consumers, and wastes precious renewable energy.

Figure 1: Annual energy generated and constrained at all Scottish wind farms, 2010-2020. Data derived from monthly Renewables Obligation (RO), Contracts for Difference (CfD) and Renewable Energy Guarantees of Origin (REGO) data for Scottish wind farms.

02. To cut bills and stop wasting renewable energy, we must update our transmission network.

Even with curtailment, renewable electricity is cheaper than electricity from fossil fuels. But curtailment is an inefficient, expensive way to prevent renewables from overloading the system. It squanders clean energy that could otherwise be used to heat homes, power transport, and keep society moving. It also increases whole-system costs.

There is an alternative. To adapt the electricity system to the variable flows of wind and solar energy, we can build new transmission equipment, pumped hydro facilities, and grid-scale batteries. These technologies provide what energy insiders call ‘flexibility’, balancing shifts in renewable generation by sending electricity to where it is needed, or by storing it for later use. This removes the need to pay generators to switch off, reduces the cost of transporting renewable energy, and ultimately cuts bills.

Energy storage also creates reserves of renewable energy for cold, dark, still days when demand rises and generation falls. This helps stabilise power markets, reducing the risk of energy shortages and price spikes. The energy transition doesn’t just mean installing wind farms. It means redesigning our network infrastructure to harness the full potential of renewables, making our electricity supply cheaper, more secure and more sustainable.

03. What would accelerate updates to the UK’s network infrastructure?

The storage sector is growing fast: around 4GW of batteries are set to connect by 2025-6. However, with a target of 50GW of offshore wind by 2030, renewable generation is deploying even faster. Over the next decade curtailment costs are forecast to increase by up to 500%, in part because wind farm construction is outstripping storage installation.

So why is storage not keeping pace with wind? Historically, storage operators have faced issues with raising equity or debt due to high upfront costs and a perceived lack of reliable revenue streams. Now, investment in storage is growing as operators develop new business models, stacking revenues from multiple services. The storage sector is also benefitting from new contracts introduced to stabilise non-synchronous power systems. Even so, creating further new markets for storage would boost investor certainty and accelerate decarbonisation.

Market challenges are being overcome, but key regulatory barriers remain. As the government and Ofgem put it, the regulatory framework ‘was not built with technologies such as electricity storage in mind’. Because of this, zero-carbon technologies are hobbled by regulations designed for a fossil fuel energy system.

Alongside this, regulators have not developed incentives for operators to locate assets where they would most effectively reduce curtailment costs. In fact, current transmission charging regulations actively discourage storage operators from putting assets in the best places for balancing the grid and preventing energy wastage.

To date, policymakers have had a strong focus on renewable generation. Now, with renewables targets set, they must turn their attention to updating our network infrastructure.

Renewable energy is being expensively wasted. Here’s how battery storage can fix that.

01.

What is renewable energy curtailment?

02.

To cut bills and stop wasting renewable energy, we must update our transmission network.

03.

What would accelerate updates to the UK’s network infrastructure?

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Peter Smith

Head of Product