This week's episode of Cleaning Up was all about how to ensure the stability of the grid while decarbonizing it. My guest was Anders Lindberg, President of Energy and SVP at Wärtsilä (one of the members of the Cleaning Up Leadership Circle) responsible for their gas engine business.

Our conversation could not have been better timed, coming within weeks of the recent Spain/Portugal power cut. If you want to know my view of what happened, no, renewables were not the cause, though how they were integrated into the grid probably was, at least in part, as I wrote here: Lessons from Spain.

Anders is an electrical engineer, and given the choice of listening to him talking about grid stability, or a bunch of climate contrarian talking heads, I know which I would strongly recommend you spend an hour doing.

Watch my discussion with Anders Lindberg, President of Energy and SVP at Wärtsilä.

Decarbonising the grid with flexible generation

Anders and I started by talking about how to decarbonize the power system.

Until now, I have always rejected the "gas as a transition fuel" argument. If you just replace coal with gas, yes, you get an immediate step-change reduction in emissions, but then you're locked in for the life of the gas plant, and given the scale of the infrastructure you have built, perhaps forever.

Now I think I was wrong. Of course, if you simply replace inflexible coal plants one-for-one with inflexible gas plants then you are indeed locked in. To get to net zero you would then either have to replace those plants at a later date (but now with the incentive of a smaller CO2 abatement benefit) or you have to add complex and expensive post-combustion CCS, which everyone knows is not really going to happen.

What Anders explains, however, is that if you replace inflexible coal with a much smaller amount of flexible gas, there's no such lock-in. As you add more renewables, you push down the use of gas to very low levels. So while you might start with flexible generation equalling 20 to 25% of the grid's output, you can quickly get to the point where it is providing just a few percent of power generation.

And then there grid stability services

The real beauty of this approach is that flexible capacity can continue to provide grid stability services, even when it rarely runs.

Whether you provide the flexible power via Open Cycle Gas Turbines (OCGT) or reciprocating gas engines, you can connect them to generators via a clutch. That way, when you don’t need additional power output, you disconnect the engine or turbine and run it down, but keep the generators spinning - acting as something called a synchronous condenser. This is a rotating mass with high inertia, which neither consumes nor generates power as long as the grid is stable, but when grid frequency changes it resists speeding up or slowing down by absorbing or injecting power.

That is the simple version. The more complicated version involves short-circuit current, reactive power and a whole bunch of other good things. But take it from me, it's a very elegant solution.

There are of course other ways of providing the same grid services, but none of them match the volume or cost of spinning flexible generation.

If you keep your “baseload” generation - big inflexible plants - online, they can’t be ramped up and down in response to fluctuations in supply or demand. You end up having to run them when you don’t need them, paying their fuel costs at the same time as paying to curtail zero-marginal-cost renewables. Anders used the example of Chile, which I visited last year, where 25% of their power comes from coal, even though they have 3,000 hours per year in which the marginal power price drops to zero.

This is, in essence, why baseload is dead: big inflexible plants matched to the minimum daily demand for power are as much of a problem as variable renewables, only at a higher cost and preventing rapid reductions in emissions.

It is worth noting that nuclear plants (which are able to load-follow but only at the cost of becoming more expensive and less reliable) - don’t impose quite the same cost penalty as CCGT or coal plants: their marginal generation cost is lower than coal or gas. In particular there is a very strong argument for keeping Spain’s largely depreciated but still safe nuclear plants online, rather than shutting them down as currently planned by 2035.

What about batteries?

In March this year, UK-based developer Zenobe announced the commissioning of Phase I of its 300MW/600MWh grid-connected battery in Blackhillock, Scotland. Supported by the National System Operator’s Stability Pathfinder programme, it is claimed to be the first transmission system-connected battery to offer the full suite of active and reactive power services (using technology procured from Wärtsilä Energy’s storage business, as it happens).

While Blackhillock demonstrates that batteries can provide stability services, it does not mean they can replace flexible generation or synchronous condensers. The problem is how to cover longer-duration mismatches between demand and renewable resources - the infamous Dunkelflaute, but also monsoon season, tropical storms, sandstorms, arguments with your neighbours, and so on.

When fully built, Blackhillock’s 600MWh of storage capacity will be able to meet just fourteen minutes of Scotland’s average power demand - much less during winter and even less when heating and transport have both been electrified. To power Scotland through a two-week Dunkelflaute would require thousands upon thousands of Blackhillocks or other battery solutions.

Should we require grid-connected batteries to help out with grid-forming in future? Sure: it would improve stability and the additional costs would be low. Will there ever be enough batteries to get through a few weeks low renewable resource, or to provide what I call deep resilience? No way.

Long Duration Energy Storage

Last week I attended the Long Duration Energy Storage Council’s annual Member Meeting in Copenhagen. It was a great chance to catch up with developments in over-eight-hour-storage for electrical and heat applications. The excitement was palpable - there was a sense of an industry on the cusp of great things. And there is no question there has been a lot of progress since I last did a deep dive into the sector. But I left as convinced as ever that it’s going to be hard to get the numbers to work for long-duration electrical power storage.

As soon as you target, say, 100-hours of storage, you are sizing your system (and associated capex) for an eight-day cycle: 100 hours of charging, 100 hours discharging. Even in a perfect year, your number of cycles is limited to 45. A grid-connected lithium-ion battery, meanwhile, could be delivering a couple of cycles per day, up to 730 cycles per year. This brutal arithmetic means your battery has to be 15 times cheaper.

And that’s only if you have the same high cycle efficiency. Drop to 60% efficiency, the likely figure for iron-air batteries (like those being developed by Form Energy, whose CEO Matteo Jaramillo was my guest for episode 144 of Cleaning Up), and you need to be 25 times cheaper than lithium-ion. I love entrepreneurs and I don’t want to say never, but I’m just not seeing it.

Which means that in order to cover longer weather disruptions (Dunkelflaute, monsoon season, tropical storms, sandstorms and the like), the only hope lies in technologies that, while they may have higher capital cost than lithium-ion, make up for it with extremely low marginal costs. And I think only solutions that can also provide grid stability services have any chance economically.

There are a few LDES solutions which could possibly fit the bill - flow batteries, liquid air, liquid CO2 - but it’s still unclear what their costs will be. Meanwhile, flexible gas plants, with generators configured to act as synchronous condensers, are right here, right now, and affordable. (We’ll get back to emissions in a moment)

How to get flexible generation built quickly

What Anders and I didn't cover in the episode was the policy framework required to drive this switch from inflexible coal and CCGTs to flexible gas generators.

The first and most obvious point is you should not allow any new gas capacity to be built unless it is flexible (high ramp rates) and can deliver grid stability services - ie no CCGT, even with CCS.

That’s right, the correct amount of CCGT in the grid of the future is zero, even with CCS - unless they can be run as flexible open-cycle plants too (which is technically possible, but almost no existing CCGTs are built this way).

Flexible generators will always be out-competed by zero-marginal-cost renewables when it is available (as well as low marginal cost nuclear), which is good - it’s exactly what you want: they will run fewer and fewer hours as the grid goes clean. However, it does mean it will need a regulatory intervention in order to get it built - a capacity market or other mechanism.

The challenge is to add the exact right amount of flexible generation / synchronous condenser over time, as you shut inflexible generation and add renewables. Too much, and money is wasted, too little and the grid will not be stable - hello Spain!

So how do you decarbonise the last few percent?

Anders and I touched on this in our conversation, but not in any detail.

Imagine a world where the bulk of your power is delivered by very cheap wind and solar, beefed up overnight and for short-term fluctuations by batteries. You might have some nuclear or geothermal power too, depending on your geography, history or geopolitical ambitions (you won’t have a lot because it’s so damn expensive). You have a lot of demand response, orders of magnitude more than today, much of it in the form of smart vehicle charging and thermal storage. And you are probably linked to a bunch of neighbouring networks that look fairly similar.

This system will meet demand with zero emissions for 90% or more of the time. Every so often, however, it faces a longer supply-demand mismatch, but you have had the foresight to add a bunch of flexible gas generation, which doesn’t run very often, but also provides grid stability services.

Three things worth noting. First, this world is far closer than we are today to net zero. Second, it is far from unaffordable. And third, it can be achieved fairly quickly: there are no unproven technologies involved, no entirely new supply chains to be built.

This is where most of the countries of the world are headed - mainly for economic reasons, but also because there is an underlying climate imperative which will continue to provide a clear gradient to innovation and investment. What is happening in the political sphere particularly in the U.S. will slow things down, but it won’t change the destination.

Now, suppose you want to get from this world to a 100% decarbonized grid.

The challenge is very clear but it is also relatively limited: how to clean up that remaining bit of flexible gas generation. Maybe, by then, those low-marginal-cost-grid-stability-supporting LDES solutions will have matured to the point they are competitive. But if not, then you’ll have to use clean molecules: perhaps clean hydrogen or one of its derivatives, but maybe just boring old biogas - after all, look how much of it little Denmark produces.

Be careful what you wish for, though. We are talking about a lot of investment, just to cover the last few percent of generation. You need generators to be able to burn those clean molecules, you need storage for enough of them to run your economy for a few weeks or months, you need a distribution system to get them to generators and you need maintenance to keep it all ready for those times it is really needed.

Worldwide we are probably looking at a few trillion dollars of investment and hundreds of billions of running costs. While it’s a lot of money, it’s still a lot less than the alternative approach of trying to build a system based purely on zero-carbon technologies, starting today - €65 trillion less between now and 2050, according to Anders.

That is why the chart at the top of this article, from a 2022 paper by Treiu Mai et al of NREL (updating analysis by Cole et al, 2021), is so important. What it says is that the cost of decarbonising power is pretty cheap - $25 to $125/TCO2 - until you get all the way to 90% carbon-free. And then it gets really expensive - up to $1000/TCO2. It is based on the U.S., but there are similar charts for other geographies. And it confirms that Wärtsilä’s findings are not out of line with other modelling exercises.

A summary and some important questions

So the short version of all this is that, with a bit of flexible generation and enough grid stability services, the first 90% to 95% of decarbonisation of the grid is fairly cheap, and the last 5% to 10% is very expensive.

Which raises a number of really important questions:

• Why don’t we focus on the first 90%, and stop getting into ideological debates about the last 10%, which we are not going to reach for decades?

• Why are we risking political backlash by promoting solutions today that deliver little or no decarbonisation (or even generate more emissions), but eat public finance or drive up costs to consumers and businesses (yes, hydrogen, I am looking at you).

• Why are we focusing so much time, talent and money on solutions that cost hundreds or thousands of dollars per TCO2, when these are vastly out of the money until grids get to 90% decarbonised?

• When it comes to the last 10%, why are we locking ourselves in to expensive solutions, instead of focusing on generating real options - i.e. following an adaptive pathway?

• Why is there such resistance to the development of bio-based CDR and book-and-credit schemes among those most concerned about climate change, given that they can be done at scale, for much less than the hundreds of dollars per TCO2 of those final few percent, and in regions desperate for jobs?

We have seen huge progress being made on the transition, with emissions plummeting across the developed world, and perhaps even starting to drop in China. However, we have also seen that, once you add in the costs of integration and the costs of stability services (as Spain shows), while still affordable, renewables are not as cheap as their promoters have promised.

And we have seen that the consensus behind rapid climate action is fracturing. It has fractured completely in the US, has been rescued from the brink in Canada and Australia, but is showing signs of cracking across Europe.

Insisting on technological purity and policies that drive up costs, especially to the poor and vulnerable, is not a viable plan. Not any more.

Affordability must lie at the heart of any robust transition strategy. And it looks like that might hinge on a rapid switch from a lot of inflexible fossil generation to a bit of flexible fossil generation.

Selah.

Watch my discussion with Anders Lindberg, President of Energy and SVP at Wärtsilä, and let me know what you think.

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