The duck in the room - the end of baseload

There's simply no space left for new (or even, soon, old) nuclear

In the power sector ménagerie, let’s start with the friendly turtle:

Source: WindEurope, data for 11 June 2023

On many days, solar production generates a nice turtle-like generation curve, with a summit, unsurprisingly, close to noon. Some people mock it because they can ask: “what do you do at night, when there’s no sun?” but the reality is that solar power is quite well suited to demand, generating the most electricity when demand is also the highest (most of it is normal daytime use, but consider that things like AC use are quite strongly correlated to solar power availability). In technical terms, solar usually has a capture price above 1 - i.e. it generates electricity when it’s more valuable than the average.

But what happens when you have more and more solar? That’s when the “duck curve” begins to appear.

Source: powerlineblog

The duck curve has been first observed in California (it was first named in 2012), where solar has grown strongly, and generates power for most of the day - except in the early evening, when demand is the highest. That means that other sources of electricity need to ramp up from very little to a lot, in a curve that has been nicknamed the “duck curve”, as is sort of resembles the neck of the animal.

As the graph shows, the feature has become increasingly entrenched and large as solar penetration grows - solar is now large enough to cover all daytime power needs on many days, but fades away in the evenings, requiring a lot of other generators - some storage, but mostly gas-fired plants, to pick up the slack for the evening peak.

And what was until recently a uniquely Californian feature is now showing up in other places, most spectacularly in Spain, but increasingly across all of Europe too.

The ducks are everywhere!

Source

The duck curve is causing a lot of headaches to grid operators, that need to deal with a daily ramp up of a large capacity from zero to maximum dispatch in a short period:

• is the capacity available?

• as it’s mostly gas-fired plants that can provide this, are we doomed to see a continued large volume of gas being burned every day?

• will these plants remain available if they are needed (and generate income) a couple of hours each day only?

If you google “duck curve” you’ll see that this is an extensively discussed and explored topic, and one obvious solution here is short term storage that can be filled during daytime (when there’s plenty of solar power, presumably cheap), and re-used a few hours later in the evening. As the demand peak is just for a couple of hours, you don’t have the same issues as the long periods in winter with no wind or sun - this is in principle a lot easier to solve - but obviously it will take time to build up the necessary storage capacity, and ensure that there is an economic model both for solar and storage.

But the other, less discussed part of the equation is that the plentiful availability of solar during day time - currently visible in the most advanced markets like California, Spain, or Southern Australia, will soon overwhelm all markets. Solar capacity is growing by leaps and bounds, and it’s not going to stop anytime soon.

So sooner or later (and probably sooner than most people expect) every place in the world will face the duck curve, with plentiful electricity in the day, but evening (and morning) demand not met by solar.

In fact, meeting demand in the evening is the (relatively) easy bit, as that capacity exists (and it is the problem that a lot of smart minds are focusing on), but increasingly, the questions will be:

• what do we do with all that electricity in the day (soon there will be too much of it)? and

• what do we do with other generation capacity during the day?

The first question will find a solution - if you have an easily accessible surplus of a highly useful resource (energy), can you find any use for it that can generate a profit? There is absolutely no doubt that the answer is yes. Storage and hydrogen are just the simplest, most centralized answers, but I have no doubt that entrepreneurs will find zillions of ways to use energy available, even if for short periods, to make something valuable of it.

The second question is not so simple - unless demand during the day builds up massively, we’re likely to see negative or nil prices for electricity for large parts of the day, as solar covers all demand. Other electricity generators, especially those with a non-nil marginal cost of production (ie those for whom it costs money to keep on generating electricity, like those that need to burn -and buy - fossil fuels to generate power) will stop generating.

And what do you do then with baseload plants? By their very nature, they are supposed never to stop generating… But what if they are no longer needed for 6, 8 or 12 hours every day for 6 to 9 months of the year? Some of the baseload plants (like French nuclear) have some flexibility to vary their generation, but definitely not from 0 to 100% every day! And their economic model will be shot to pieces if they make no money whatsoever half, or even a quarter of the time.

We are moving inexorably towards a system where solar dominates the day, wind produces when it’s available (which, thankfully, is highly complementary to the solar profile, i.e. more in the mornings and evenings and more in winter than in summer), and flexible power sources (hydro, gas-fired plants, storage as it builds up, and, more and more, interruptible demand) make up the rest.

There is no space in that system for baseload.

None whatsoever.

It’s increasingly hard today to run baseload plants in places like California, Spain or Germany, and it will be getting worse every year.

Solar will keep on being installed, massively. And not just ground mounted industrial PV plants, but rooftop solar, and increasingly intermediate size systems on buildings, parking, industry, etc, whether to the grid or behind the meter.

10-15 years from now, when any new nuclear plant decided today might be ready to be connected to the grid, the residual demand profile after wind and solar will show that it’s not needed most of the time. You don’t build a nuclear plant to provide a few hours of power every morning and evening.

There’s simply no business case for any baseload plant anymore. There’s a lot of opportunities for flexible plants, demand management and the like, but none whatsoever for baseload, however carbon-free.

Some will say that this means we’ll be stuck with a lot of gas being burned (not a good thing!), but I’m actually optimistic on this:

• the first is that we do have quite a bit of hydro, which is currently used to manage the large daily variations in the gap between demand and baseload generation. Once we get rid of baseload, we’ll see that we actually have a lot of variable capacity to deal with renewables (if you look at the graph at the top of this article you’ll see that the daily variation is mostly managed by hydro, not by gas);

• the second is that having gas-fired plants that generate power a couple of hours per day is still a lot better than gas-fired plants that generate a lot of hours per day, which is still the case for a lot of these plants - shortened medium term, we should only reduce gas-fired MWh, and not care so much about gas-fired MW (keep the power plants, and use them as little as possible);

• the third is that, long term, we will find other solutions than gas. That may sound like wishful thinking, and we definitely do not have today the necessary storage capacity, but (i) it will increase massively, and (ii) as noted above, a lot of the evolution will come form the demand side, where so much is happening. There is so much entrepreneurship and creativity there - it’s a lot of small scale initiatives, but they will add up, and change our power systems for the better.

But new nuclear - just not going to happen. And old nuclear will find life increasingly awkward.