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National flexibility vs. local: The benefits of moving away from a siloed approach

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In order to truly maximise the benefits of flexibility – both economically and to ensure net zero is reached – Britain needs to move away from siloed solutions.

While “great strides” have been made in the decarbonisation of the electricity sector with regards to the phase out of coal and the growth of renewables, the Carbon Trust’s director Andrew Lever told Current± recently, “the heat and transport sectors are now kind of coming into the crosshairs”. By approaching these with an integrated, whole systems perspective the benefits of decarbonisation can be shared, creating a more flexible system that is ultimately more cost effective.

In the non-profit’s Flexibility Great Britain report, it argued that investing in flexibility is a “no-regrets decision” that could provide up to £16.7 billion in savings per annum in 2050. The report looked at the flexibility being deployed within distribution networks, and the discussion happening at a local level around this expansion.

“What we actually found is that whilst flexibility deployed at a local level brings benefits at that local level, more than double is realised on a national level,” explained Lever. “We took the distribution region of London and said there's about half a billion pounds of benefit by adopting flexibility that can be attributed to London, but just under a billion pounds of benefit that can be realised at a national level.

“So there's a really interesting interplay there between making sure that we're thinking about local energy systems, and the value that's realised at a national level, and whether it can be recognised and linked up between the two systems.”

Going forwards, there’s still a number of “low-hanging fruit” available to the UK to help drive decarbonisation, including the adoption of demand side response, electric vehicles (EVs) and smart charging. For example, there is a potential £4.5 billion per year of value associated with demand side response, largely through using EVs to increase the flexibility of the system, helping to manage periods of peak demand.

This can be largely driven by policy and consumer engagement over the coming years, with little overall investment from the consumer as smart tariffs can minimise costs. There is a role to be played by local government, national government and the system operator to ensure this potential is captured.

“I think one of the things that we see is that there's a substantial amount of build out required, I think most people would recognise that to get to get to 2050,” said Lever. “On the network side flexibility reduces generation capacity, and it reduces the requirement to reinforce the network. But I think when we come to local area planning - and a lot of cities and regions are looking at their own net zero plans - the message is really that when they're looking at decarbonisation strategies, it's about working with a local network, and realising that there's value at a national level too.

"A lot of these investments we have to take in terms of heat pump rollout, CCS, or hydrogen, etc. So it's really about embedding that kind of flexible viewpoint from the start, as opposed to being in a kind of an additional cost.”

Within the Carbon Trust’s report, three scenarios were detailed with a key focus on decarbonisation pathways for heating – including a range of technologies such as heat pumps, hydrogen and hybrid heating systems – and their role in developing a more flexible energy network for Britain. All three scenarios were technically feasible, factoring in the growth of renewable energy on the system, the need for security of supply and the challenges of moving away from unabated gas flexibility.

“I think the fascinating thing about the report was that although the focus was on flexibility, you have to take your view on 2050 and what that looks like to do your kind of counterfactual analysis,” said Lever. “So we assumed the energy sector had to achieve a net negative figure of minus 50 million tonnes of CO2 per year to reach net zero, and indeed, pick up the burden of the hard to decarbonise sectors, according to Climate Change Committee. And that adds about £5 billion a year to the cost. So there's a question around how that's paid for and how that is managed.”

Further digitalisation will be needed to ensure that these decentralised solutions can truly be maximised, allowing flexibility to save the country money in the transition to net zero.

The full Carbon Trust report can be found here.

Editorial

Molly Lempriere Deputy Editor, Current±

Molly Lempriere is deputy editor at Solar Media, responsible for its UK-facing publications Solar Power Portal and Current±.

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