U.K. Can Shut Most Gas Plants and Keep Lights On, Study Shows

(Bloomberg) -- Power plant developers in Britain are overestimating the need for natural gas-fired generation to back up intermittent renewable energy.

The nation needs only 38 percent of the gas capacity it has now to keep the power on, according to a report by New Resource Partners, a consultancy that advises governments and investors on renewables.

“Our modeling shows that the lights would stay on,” even if the wind doesn’t blow for an extended period during winter, said Hugo Chandler, author of the report and a former International Energy Agency official who led its work on grid integration for renewables.

Developers from SSE Plc to Eggborough Power Ltd. are racing to build large-scale gas plants to replace coal being phased out and older gas stations reaching the end of their lives. German utility RWE AG decided earlier this month to freeze development of a 2.5-gigawatt U.K. gas station after it identified more capacity planned than will be needed.

The future cost of renewables generation is expected be increasingly competitive. By 2030, a U.K. power system where wind and solar generate 50 percent of the country’s electricity will be comparable in cost to one dominated by gas-fired power stations, New Resource Partners said in the report.

Energy security can be maintained through a combination of gas-fired stations and cross-border power lines known as interconnectors, as well as shifting demand from peak periods and using energy storage, according to the report.

About 14 gigawatts of gas-fired generation will be required to meet demand on the calmest of days by 2030, compared with 37 gigawatts of operational gas capacity in 2017, it said. The scenario envisages 81 gigawatts of wind and solar generation. One gigawatt is enough to power 2 million European homes.

Increasing the capacity of other flexible resources assumed in 2030 would decrease the amount of gas capacity needed still further, it said.

©2018 Bloomberg L.P.