Getting ready for net-0 quickly – an interview with Bruce Smith
EWEC’s head of planning says that as clean power capacity builds, the challenge turns to operating the system, working on control systems for grid stability while anticipating price of storage falling to make storage plus PV cost-competitive; sodium-based batteries could be a solution
Bruce Smith is Executive Director for Strategy & Planning, Emirates Water and Electricity Company. He sees an exciting time for utilities, even while the ultimate net-0 solutions remain unclear. I caught up with Bruce last week at the World Utilities Congress in Abu Dhabi.
Energy & Utilities By 2027-28, EWEC will have enough solar power in the system, with nuclear power, to be running a daytime system close to 100% clean energy. Meanwhile, you are expecting the load factor of natural gas power sources to fall from 55% in 2022 to 20% by 2030, with gas becoming a ‘swing’ power provider.
When you began as head of planning for EWEC, did you expect to be this far into an energy transition by now, in 2023?
Bruce Smith It’s been quicker, I think, than anybody anticipated back in 2015 when I began in this position. The first indication that solar was going to offer a significant cost benefit was Dubai’s project when we saw ACWA winning a project at $54/MWh – remember, up to that point, solar was really expensive – and I remember everybody being in disbelief that ACWA was able to offer a project at that price.
Then we followed at Sweihan, just under $30/MWh, and now we’re almost done with Al Dhafra at just over $13/MWh. So, prices continue to fall. And, since last summer, we have had clean energy targets mandated.
So, the challenge we face, in terms of hitting the 50% clean energy by 2027 target, is more about how we operate the system than about how we build the capacity. If we build the capacity but can’t operate the system securely and use solar as a genuinely dispatchable resource to displace gas as the provider of grid services, then we won’t be able to hit that target.
So, the challenge now is not so much about building the capacity, although longer-term, that still is a challenge. It’s about how we will run the system in the winter, with a significant amount of nuclear power on the system and 2.5GW solar power already on the system, we could theoretically be close to 100% as soon as next winter.
Can we run the system at 100% clean energy next winter? No, we don’t have the control systems in place. So, the problem is shifting from, have we got the clean energy capacity, to have we got the control systems and other grid support services we need, and can we control it and keep the grid stable?
E&U You mentioned the most difficult time for control of clean energy coming into the system is winter daytime.
Smith That’s when the problem is going to hit us first. The challenge, when you think about it, is when we move ahead to 2035, we could have 10GW or more solar power on the system, which means we will need to ramp up from 10GW solar to zero gigawatts of solar every day. That problem will be bigger in the summer than in winter because, in winter, we will be curtailing some of that solar.
But the time when the problem will hit us first will be winter, in just a few years time when we will have enough solar on the system and reduced gas capacity operating, we will have to replace that solar capacity with gas very quickly as the sun sets. So daytime, and I would narrow it down even more and say during the daytime when the sun is rising and the sun is setting, will be the most challenging period initially.
E&U As soon as next year, possibly?
Smith We will have to curtail solar in order to manage the system securely. For the amount of solar we will have next year, we should be fine, but in order to get to 100%, we will need the control systems that will enable us to deploy solar as a dispatchable resource. We don’t yet have that as a fully automated system-level capability.
E&U Are you scrambling now to put this capability into place?
Smith Along with every other utility globally. And we’re ahead of many of them.
E&U What is your main concern right now?
Smith The key challenge is to know what it is you need. It’s the classic case of needing to have visibility of what you need to manage. You need to know how much inertia you’ve got on the system, if you haven’t got enough physical inertia, then you need synthetic inertia, where does that come from?
Longer term or in the short term, it needs to come from some form of rotating mass on the system or potentially from synthetic inertia generated by some form of inverter-based technology, using grid-forming inverters rather than grid-following inverters.
That’s relatively new; there’s no large system that you can point to using this kind of synthetic inertia. So, at a 15-20GW system level, it’s about feeling your way and doing it securely.
Ireland is ahead of us. They’ve had much higher penetration from their wind generation, but they’re still struggling, still feeling their way cautiously. It’s still inverter-based generation, it’s DC generation, so the challenge of low levels of inertia being generated by a wind-dominated system is very similar to that in a solar-dominated system, it’s coming out of an inverter. So, if you’re going to make that generation provide inertia, it’s synthetic inertia, coming from power electronics rather than physical rotating mass.
That will be one example. The forecasting of what your wind and solar power can provide at any point in time needs to be very advanced so you can be absolutely sure what you’re going to need to call on from gas or batteries. The speed of response to short-term demand variability is one area where batteries offer an immediate short-term benefit to the system, even at today’s battery system prices.
E&U Does EWEC have a control center for your entire operations in Abu Dhabi and elsewhere in the country?
Smith Absolutely, control of the EWEC system is undertaken at a control center here in Abu Dhabi. There are also interconnections between us and Dubai and GCCIA.
E&U Will this require upgrades?
Smith Yes. Up until 2019, the system was more than 99% gas-based. We hit 80% clean energy-based this year. In the space of four years, we’ve gone from close to 100% gas all of the time to a system that was 80% ‘not gas’ for an hour this year.
So, the control systems that we use to make sure we have enough of these grid stability services need to be developed and need to keep up with the pace of change. Which is challenging when things are changing this quickly.
E&U You will add 300MW battery storage to the system. Will this be distributed or centralized?
Smith Those batteries are there to provide reserves, they’re not there to provide arbitrage as such, so we’re not talking about filling batteries with solar energy during the day, so we then discharge it over many hours at night. It’s more about providing an immediate, milli-second level response to variations in frequency in the grid and also providing secondary reserves, reserves which would traditionally be provided by gas turbines. Because we don’t want to be running those gas turbines, in order to keep the amount of energy that’s generated by the gas down, the batteries should be providing that.
As soon as the 2030s, we’re anticipating the price of storage falling to the point where we would expect storage, longer-term storage plus PV, to be cost-competitive with gas-fired generation or nuclear generation.
E&U The cost of storage now is not competitive, currently, at approximately $250/Kwh, it must fall to $100-110/Kwh.
Smith That break-even point is a function of the price of gas and the price of nuclear power as an alternative. We’re monitoring that all the time. But $100-110 would displace most of the gas-fired generation. And, of course, if we have $10-15 gas rather than $4-6 gas, then that tipping point happens at a higher storage price.
So, $250 is not in the money for energy arbitrage, compared with gas, even at $6-8.
E&U Do you see battery storage for energy arbitrage being viable in the early 2030s or even sooner?
Smith Well, everybody who took a punt at when solar PV was going to be cost-competitive was proven to be pessimistic and wrong.
There are a number of different battery chemistries out there which offer the potential for significant price reductions. If you look at CATL and what they’re doing, in terms of sodium batteries, to replace lithium batteries, they’re making significant strides. Sodium is far more available and at a much lower cost than lithium. They’re already supplying some sodium batteries to some car manufacturers.
So, we’re already seeing sodium batteries being used in cars, it wasn’t expected to happen until 2024-25.
Energy density for utility-scale storage is less critical than it is for transport. I think the challenge is scale, scaling up production to the multiple gigawatt hour scale. At the moment, CATL is focusing on the perhaps more lucrative area of EVs.
E&U Is anyone you are aware of working on interesting utility-scale storage now?
Smith There are many different types of chemistries that have been developed, but turning those from a large pilot scale into something fully commercial and cost-competitive to lithium, which has been developed over some years now, is challenging. It’s that scale-up transition that is the challenge.
And how to go from a half-megawatt pilot scale to multiple gigawatt factories, that’s holding us back at the moment.
For now, the short-term, immediate gain for battery makers is in the EVs. Utility-scale is a multi-trillion dollar business, and whoever cracks this and gets the price down into the $100 range is going to open the door to decarbonizing the utility sector. Before that happens, the price point at which batteries are competitive for EVs is significantly higher, so they’re not focused on utility-scale now.
E&U You have said 16-hour storage is the ‘sweet spot’.
Smith Basically, we need to get to at least 16 hours of storage to be able to produce a 24/7 solution that’s solar plus batteries, with a relatively high confidence level.
Aiming for more than 90% reliability from a battery-plus-PV solution becomes increasingly expensive, but if we can get to 90-95%, having open-cycle or some form of relatively low-efficiency gas in reserve as a backup, it’s likely to be more cost competitive than long-duration battery storage for quite some time.
So there’s Form Energy, their iron-based chemistry, it’s heavy, relatively low energy density, that’s one of the chemistries that might provide a long-term replacement.
Hydro-electric, probably not in this climate. What works for us in the UAE isn’t applicable, for example, in Denmark with its extensive wind resources. We’ve each got to solve our own problems. We’ve got an immense solar resource here, we’re blessed with that and with land, so solar has the potential to provide the bulk of the primary energy supply for the UAE.
We don’t have such a strong wind resource here, but Oman does. Maybe there’s potential for interconnections with Oman that could be mutually beneficial.
E&U Are you looking seriously at the GCCIA as a factor in your planning?
Smith Interconnections have a role to play. I mentioned the potential to tap into the wind resource in Oman. A GCCIA connection, or a dedicated connection with the UAE, could potentially make sense. It’s something we’re keen to look at.
E&U Is hydrogen a factor in long-term storage?
Smith The challenge we face here is demand in summer, that demand in August is double the demand in January. Is it cost-effective to produce hydrogen in the winter, store it, and burn it in a gas turbine in the summer?
I have seen no evidence that the economics of hydrogen for large-scale utility energy production makes any sense at all, given the current costs we see associated with hydrogen.
There may be applications where decarbonizing particular parts of the energy value chain make sense. But the utility sector is one of the last places where hydrogen looks like it’s going to make sense. Battery storage seems to be far closer to being in the money than hydrogen as an energy vector. Because that’s what it is, it isn’t a primary energy source per se.
The cost of producing hydrogen, and turning it into electricity, is relatively high, with the electrolysis required, and hydrogen is difficult to store for long periods of time, so there are all sorts of technical challenges that mitigate against hydrogen. The engineering and technical aspects of hydrogen don’t support it.
That’s not to say that in the future, that might not change. But I would still say that as the prices for hydrogen production fall, it’s still likely to be the case that decarbonizing utility-scale electricity production using hydrogen and burning hydrogen gas is likely to be one of the last things that make economic sense. There are other parts of the energy value chain that are likely to be more attractive from a cost perspective.
E&U So, the vector to watch is battery storage, and which technology will emerge?
Smith EWEC is technology neutral. I could be wrong. There could be a major breakthrough in terms of electrolysis technology, which means we are seeing hydrogen at $1/kg or less very quickly. If that’s the case, we will adopt it.
Our job is to manage the energy transition, achieve decarbonization objectives, and do so in the most efficient way.
Our objective is net-zero, not absolute zero, and there may be ways of getting there that retain some small proportion of natural gas as a backup, producing small amounts of energy but providing critical levels of system security such that it remains the most cost-effective way of achieving that.
Maybe those emissions will be accommodated with some form of off-setting mechanism. But we need to keep an open mind on what is the most efficient and effective way of decarbonizing as quickly as possible, at the lowest cost.
E&U So, we could still be working with gas-fired power in 2050?
Smith It’s a net-zero objective. What the actual solution looks like at this stage is unclear, and there are very few utilities anywhere globally that have an absolutely clear roadmap on what their generating portfolio is going to look like.
Our position is, at the moment, solar PV plus storage, at today’s prices, is pretty comparable with nuclear, albeit with a lower level of long-term reliability. That’s at today’s storage prices. But what are the storage prices in ten years going to look like?
Combining this with solar prices, with all the advances in perovskites and other solar technologies that we see in the pipeline, I think there is potential for significant price falls for renewables technologies plus storage. It looks like an exciting time.
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