22/05/2024

What are Grid Constraints & Why Do They Cause Businesses Problems?

Grid constraints pose significant challenges for businesses seeking energy cost savings, revenue generation and meeting sustainability goals. These constraints often restrict the potential for onsite generation, meaning businesses fail to meet operational demands cost-effectively, let alone generate surplus energy to sell back to the grid.

It’s no surprise that European grid networks continue to struggle with the rapid increase of renewable energy generation into the power system. This often results in renewable energy overwhelming the ageing infrastructure, forcing generators to temporarily shut down or pay for costly grid reinforcements, costs ultimately borne by bill payers  in each market.

In this guide, our energy storage experts here at Wattstor will be explaining our best definition, the main types of grid constraints, what causes them, and the top strategies to overcome the impacts of commercial sites across Europe.

Grid constraints definition

By definition, grid constraints refer to the limitations within a national grid network that hinder the efficient generation, transmission, distribution and integration of electricity from power generation sources like fossil fuels, renewable energy (solar, wind, hydro), and nuclear power. These grid constraints manifest in various ways, affecting the stability and reliability of the electricity supply and ultimately the financial gain for  commercial and industrial sites.

Overcoming grid constraints is crucial for a number of reasons, including:

  1. Reducing a site’s reliance on the struggling national grid network
  2. Maximising onsite solar generation for better financial upside
  3. Supporting sustainability goals and integrating low-carbon initiatives

The main types of grid constraints

Commercial sites with solar power face critical grid constraints, particularly capacity limitations and voltage fluctuations. Battery Energy Storage Systems (BESS) with DC coupled solar capability and intelligent energy management offers effective solutions, ensuring reliable power supply and maximising renewable energy utilisation.

Capacity constraints

Capacity constraints occur when the grid’s infrastructure cannot handle the volume of electricity being generated and consumed. This can happen in both high-voltage transmission lines and lower-voltage distribution networks.

  • Transmission bottlenecks
    Congestion in lines due to high demand or inadequate infrastructure.
  • Distribution overload
    Strain on networks, particularly in urban areas with growing energy demands.
  • Renewable integration
    Surges or drops in power from renewable sources can exceed grid capacity, leading to inefficiencies and potential energy curtailment.

Voltage constraints

Voltage constraints involve maintaining consistent voltage levels across the grid. Stable voltage is critical for the proper functioning of electrical equipment and overall grid stability.

  • Load variation
    Changes in electricity demand can cause voltage spikes or drops.
  • Reactive Power Management
    Poor handling of reactive power can lead to voltage instability.
    Equipment Limitations
    Ageing or inadequate components struggle to maintain proper voltage levels.

Frequency constraints

Frequency constraints pertain to keeping the grid’s frequency within a narrow range (typically around 50 Hz in the UK). Consistent frequency is crucial for grid stability and the operation of electrical devices.

  • Supply <> demand imbalance
    Differences between supply and demand causing frequency deviations.
  • Integration of renewables
    Variable output from renewable sources complicates frequency control.
  • Disruptive grid events
    Sudden changes, like power plant outages or unexpected demand surges, can disrupt frequency stability.

The common causes of grid constraints

Outdated or insufficient grid infrastructure

The power grid in many areas was originally built for a centralised generation system, where electricity is produced at large power plants and distributed outward. This infrastructure is often outdated and insufficient to meet the demands of modern energy systems, particularly as we shift toward more decentralised generation. 

Ageing equipment and limited capacity lead to inefficiencies and bottlenecks that constrain the grid’s ability to reliably deliver electricity. This can often impact specific regions more adversely than others, for example:

United Kingdom

According to the National Grid ESO, one of the most constrained areas in the UK grid is the B6 boundary, also known as the Anglo-Scottish boundary. This boundary often requires renewable generation to be turned down pre-fault, leading to high constraint costs. This area has seen significant challenges in managing congestion and balancing supply and demand efficiently.

Wattstor has hands-on experience with this as we have encountered instances where DNOs have limited generation to 200kW across the B6 border, despite having over 1MW installed on 200kW grid connections.

The Netherlands 

In the Netherlands, several provinces are facing severe grid bottlenecks, most notably the provinces of Flevoland, Friesland, Gelderland, North Holland and South Holland are experiencing increased congestion. This has led to limitations in deploying new solar and wind projects as the grid capacity struggles to keep up with renewable energy inputs.

Czech Republic

In the Czech Republic, the network primarily covering the southern part of the country is facing challenges due to grid capacity constraints. Customers in this region often wait eight to nine months for their solar systems to be connected, with delays compounded by the fact that the payout of rooftop solar rebates is linked to grid connection, causing financial strain on both consumers and installers.

Wattstor has experience in this area, and our DC/DC solution can effectively address these constraints, making it well-suited for the southern region.

View Wattstor case studies overcoming Grid Constraints »

Growing electrical demand and increasing urbanisation

As populations grow and urbanise, the demand for electricity increases significantly. This rapid growth puts a tremendous strain on the existing grid infrastructure, which may not have been designed to handle such high levels of demand. Urbanisation also leads to more concentrated energy usage, further exacerbating the stress on distribution networks and leading to potential overloads and failures.

Integration challenges with renewable energy sources

The shift from centralised to decentralised energy systems introduces new challenges, particularly with the integration of renewable energy sources like wind and solar power. These sources are intermittent and variable, making it difficult to maintain a stable and reliable grid. The existing grid infrastructure often lacks the flexibility and capacity to accommodate these fluctuations, leading to grid constraints and potential energy curtailment.

Extreme weather and other emergencies

Extreme weather and natural disasters such as storms, floods, earthquakes etc. can cause significant damage to grid infrastructure. These events can lead to prolonged outages and reduced grid capacity as repairs and restorations are undertaken. Other emergencies, such as cyber-attacks or equipment failures, can also disrupt the grid and create constraints that impact the delivery of electricity to consumers and businesses.

The business impact of grid constraints

Increased non-commodity and standing charges within energy bill

Grid constraints can lead to increased non-commodity charges and standing charges on energy bills. These additional costs are passed on to consumers to cover the expenses associated with grid maintenance, upgrades, and managing supply-demand imbalances. For businesses, this means higher overall energy expenses, impacting their bottom line.

Understanding these impacts highlights the importance of addressing grid constraints to ensure reliable, cost-effective, and sustainable energy supply for both commercial and residential users.

Underutilised renewable energy generation and distribution

Grid constraints hinder the effective integration and distribution of renewable energy sources. This poses significant challenges for businesses investing in renewable energy, as they may be unable to maximise the use of their generated power. 

Constraints can lead to energy curtailment, where excess renewable energy cannot be fed into the grid, resulting in lost potential revenue and reduced return on investment.

Effect on energy reliability and availability

Grid constraints can lead to frequent power outages and unreliable energy supply. For businesses, this means disruptions in operations, potential loss of data, and halted production lines. Unreliable energy can severely impact the continuity of business activities, leading to delays and reduced productivity.

How to overcome energy grid constraints

Demand led distributed electricity system

Transitioning from a centralised generation led energy system to a flexible energy system. No longer a system where generation is turned up and down to meet demand, instead a demand led distributed energy system powered by smart grids. Demand flexibility is key to achieving this through smart integrated energy assets.

Infrastructure upgrades and modernisation

Upgrading and modernising the grid infrastructure is crucial to overcoming capacity and reliability issues. Investments in new transmission lines, substations, and distribution networks can increase grid capacity and reduce bottlenecks. Replacing outdated equipment with modern, high-capacity alternatives ensures the grid can handle current and future energy demands, including the integration of decentralised renewable energy sources.

Regulatory measures and policy initiatives for grid efficiency

Governments and regulatory bodies play a critical role in improving grid efficiency through supportive policies and regulations. Initiatives such as setting renewable energy targets, providing incentives for grid modernisation, and implementing strict standards for grid reliability can drive the necessary changes. 

Regulatory measures that promote the development and integration of renewable energy sources, energy storage systems, and smart grid technologies are essential for creating a more robust and efficient power grid.

Smart Battery Energy Storage Systems (BESS)

Smart Battery Energy Storage Systems (BESS) offer a highly effective way to overcome grid constraints by optimising the storage and use of electricity. These systems incorporate advanced software and intelligent control mechanisms to dynamically manage energy storage, ensuring a stable and reliable power supply.

Wattstor’s innovative system combines Energy Management System (EMS) controlled DC/DC battery storage with solar power. This advanced integration allows businesses to install more solar capacity than their grid connection would typically support. By intelligently managing the flow of energy, Wattstor’s system maximises the use of generated solar power, reducing dependency on the grid and enhancing energy resilience.

How to Minimise Grid Dependence by Maximising Solar Power With Storage

Grid Constraints Case Study

Our experienced team here at Wattstor helped Mawdsleys, the UK’s largest independent pharmaceutical distributor, overcome significant grid constraints.

Limited to a 750 kW grid connection, we deployed our DC direct coupled battery solution, allowing for a larger solar array. Our Podium EMS efficiently managed energy storage and distribution, optimising solar usage and enabling future expansion. This solution maximised energy self-consumption and supported Mawdsleys’ journey towards net-zero emissions, demonstrating our capability to solve grid limitations effectively. Read more »

Summary

To summarise, grid constraints pose significant challenges for businesses aiming to optimise costs, revenue, and sustainability goals. These constraints often make it difficult to install enough onsite solar power to meet operational demands. The national grid struggles with increasing renewable energy, leading to potential shutdowns and costly reinforcements, which are passed on to bill payers. 

Overcoming these constraints involves upgrading infrastructure, implementing regulatory measures, and adopting smart solutions like Wattstor’s EMS-controlled DC/DC battery storage. This system enables businesses to maximise solar capacity and reduce reliance on the grid, ensuring a stable and efficient energy supply.

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Author

Jack Peck, Wattstor Head of Sales in the UK

Jack Peck

Head of Sales, UK & Ireland

Jack Peck has over a decade’s experience in the renewable energy sector. Starting out as a solar developer, he has spent the past five years bringing battery storage solutions to market and now heads up Wattstor's sales team in the UK.