Statera has emphasised that the UK’s renewables buildout is already running ahead of system capability, turning excess wind into a cost burden, and positioning hydrogen as the most viable near-term solution.
Speaking at the National Gas Energy Forum last week, Statera policy manager Phoebe Finn delivered a stark warning: the UK’s renewable energy success is beginning to backfire.
“Wind curtailment is already happening at scale in Scotland, and it’s getting worse. This is not a future problem… it’s a structural issue that is happening now,” she said.
Her message reflects a growing concern across the energy system: that rapid deployment of wind, particularly in Scotland, is outpacing both grid infrastructure and the system’s ability to absorb power.
Oversupply becomes a cost problem
Finn’s central argument is that excess renewable generation is no longer just inefficient – it is actively driving costs.
“Zero or near-zero prices do not just mean cheap electricity. They usually mean that the system cannot use what is being generated where it is being generated,” she said.
In these conditions, grid operators are forced into counterintuitive actions: turning down wind in Scotland while ramping up (often gas-fired) generation elsewhere.
The result is a system where clean energy is wasted, while consumers remain exposed to fossil fuel price volatility.
“Oversupply… can end up increasing consumer costs and extending exposure to gas price volatility,” Finn warned.
Forecasts underline the scale of the issue. Constraint costs could reach £8bn by 2030, driven largely by bottlenecks such as the B6 transmission boundary between Scotland and England.
System mismatch – not just a grid problem
Finn framed the challenge as more than a transmission issue. It is a fundamental mismatch between supply and demand.
“What stands out is the growing mismatch between when clean power is produced and when the system is able to use it,” she said.
This mismatch is set to intensify. By 2030, Scotland could see zero-price electricity for more than half the year, a clear signal that supply is exceeding demand at scale.
As renewable penetration rises, curtailment will increasingly become ‘economic’ rather than purely physical, undermining investor confidence as projects are unable to capture value from their output.
The limits of conventional solutions
Finn outlined three conventional responses, each necessary but insufficient on their own:
- More demand: “The best alternative… but not a silver bullet unless it’s flexible, well-located, and able to respond to market signals.”
- More transmission: “Necessary, but… expensive and challenging to build in time.”
- Long-duration storage: “Valuable… but cannot absorb the full volume and duration of surplus on its own.”
Together, these constraints point to a deeper structural issue: the system lacks sufficient flexibility to manage sustained periods of excess generation.
Hydrogen as system flexibility
This is where Finn positioned hydrogen, not as a distant decarbonisation tool but as an immediate system solution.
“Green hydrogen is uniquely valuable from a power system perspective,” she said.
Electrolysers, she argued, can act as flexible demand – absorbing excess renewable power when supply is high and switching off when the system tightens.
Crucially, hydrogen can also be stored at scale and over long periods, addressing the multi-day imbalances that batteries and other storage technologies struggle to manage.
Blending as the bridge
The most politically and commercially relevant part of Finn’s argument centred on hydrogen blending into the existing gas network.
“Blending’s not the end state of hydrogen, but it is a low-regrets bridge,” she said.
By using existing infrastructure, blending could:
- Create immediate demand for hydrogen
- Reduce renewable curtailment
- Displace natural gas
- Lower system costs without requiring full hydrogen network buildout
Modelling cited by Statera suggests a single 500 MW electrolyser could reduce constraint costs by £145m in 2030 alone, while cutting constraint volumes by 11%.
Economics begin to align
Finn also challenged the perception that hydrogen remains prohibitively expensive.
Flexible, grid-connected electrolysers – operating during periods of low or negative power prices – could produce hydrogen at costs competitive with gas, particularly when factoring in carbon pricing and system benefits.
The implication is significant: hydrogen could move from subsidy-dependent to system-value-driven faster than expected.
Finn’s conclusion was a clear policy call: “We need to enable blending… to unlock strategic flexible projects in Scotland,” she said.
She urged government to implement hydrogen blending at a minimum 5% level, with higher thresholds in constraint-heavy regions like Scotland.
Without intervention, she warned, the UK risks a paradox: building more renewables while deriving less value from them.
“We can build more wind… but unless we solve what happens when Scotland is oversupplied… we will be paying more and getting less.”
The bigger picture
Finn’s remarks highlight a critical inflection point in the energy transition.
The challenge is no longer simply to deploy clean generation, but to ensure the system can use it efficiently.
Hydrogen, in this framing, is less about long-term decarbonisation of hard-to-abate sectors and more about near-term system optimisation.
If that argument gains traction, it could reshape how policymakers prioritise investment – shifting focus from generation targets to system flexibility and integration.
