The National Energy System Operator (NESO) has published its Clean Power 2030 (CP30) report commissioned by energy secretary Ed Miliband.
The report provides an independent analysis of how the UK can best achieve its clean power ambitions by 2030, concluding that while it will be a “huge challenge,” clean power by 2030 is possible. The government will now consider the advice in developing its clean power action plan later this year.
NESO uses ‘clean power’ to describe a scenario in which at least as much power is generated from clean sources as Great Britain consumes across the year, and when unabated gas generation makes up less than 5% of Great Britain’s generation in a typical weather year.
The report suggests several necessary system, market and infrastructure changes in line with two primary pathways that deliver clean power developed by NESO. It also offers two wider sensitivities, which offer more stretching levels of deployment of key technologies.
The use of pathways reflects the shift that began with National Grid ESO’s Future Energy Scenarios (FES) report published earlier this year, which informed the transition to NESO. These have allowed it to examine a range of possibilities and explore the relative importance of specific elements of the clean power system.
National Grid chief executive John Pettigrew called the report an “immensely helpful milestone” for providing clarity on the necessary steps to clean power by 2030.
Delivering clean power will require swift action from industry, regulators, government and NESO, necessitating significant changes in approach. A key challenge will be making sure all deliver simultaneously, in full and at maximum pace, in a sustainable way. CP30 sets out the hurdles and the benefits of those changes.
Fintan Slye, NESO chief executive, said: “There’s no doubt that the challenges ahead on the journey to delivering clean power are great. However, if the scale of those challenges is matched with the bold, sustained actions that are outlined in this report, the benefits delivered could be even greater.”
Flexibility and digitisation
Each of NESO’s pathways assume a high level of societal change and digitisation. System and bidirectional flexibility will replace fossil fuel flexibility and the report establishes a broad hierarchy of flexibility options: demand side, short duration storage from batteries or vehicle-to-grid (V2G), interconnector import and finally unabated gas.
Demand flexibility will need to reach 10-12GW through smart charging of electric vehicles (EVs) and time-shifting household demand.
That flexibility must be supported by a transformation in data and digital infrastructure. Smart tech, EVs and electrified heating provide new ways for consumers to engage with the energy system and cut their costs by flexing their demand. Digitisation eases this process and thus makes it more willingly taken up by the public.
Analysis sees battery capacity increase from 5GW in 2023 to 23-27GW in 2030. Long-duration energy storage (LDES) is also key and grows from 3GW in 2023 to 5 – 8GW in the pathways. A more responsive industrial demand could provide a further 4GW from storage heating.
Increasing generative capacity
The pathways “push the limits of what is feasibly deliverable” but allow flexibility at their margins: onshore wind and solar could substitute for offshore wind; more demand-side response could substitute for batteries; more hydrogen or carbon capture and storage (CCS) could substitute for most other supply options.
Delivery of a clean power system in 2030 will require an installed generation and storage capacity of around 210-220GW and significant levels of new demand connections to the electricity network across transmission and distribution.
The pathways see a doubling of onshore wind capacity from 13GW in 2023 to 27GW by 2030 and a trebling of solar from 15GW to 47GW by 2030. These can deploy at a faster rate than offshore wind and include smaller community-scale projects.
Offshore wind will need to see more capacity contracted in the next two years than in the last six by building an additional 28-35GW, up from today’s 15GW.
To support this, more network infrastructure will have to be built at four times the speed it has been in the last decade with a focus on speeding up delivery to reduce system costs. The report finds that current plans for network expansion are sufficient but must overcome many barriers to deliver on time and some vital projects need to be accelerated to deliver by 2030.
Grid upgrades and connection reform
Buildout of generational capacity and the technologies that enable flexibility will be dependent of reforms to the grid connection queue, which itself necessitates infrastructural upgrade.
In his response to the CP30 report, Miliband said: “The government is determined to ensure the significant reforms to planning and grid we need so we can back the builders and support investors to make this once in a generation upgrade of Britain’s energy infrastructure happen.”
Alongside the report, NESO has published a consultation on the methodologies which create the architecture for grid connections reform. The consultation proposes various methods for reducing and reordering the connections queue, namely a shift from the current ‘first-come, first-served’ approach.
A clean power system in 2030 will need to move more power over greater distances. Without grid expansion, it will not be possible to fully utilise renewables and gas will be needed instead.
The scale of change required is significant and will require huge amounts of investment. In parallel, NESO has committed to exploring grid-enhancing technologies—hardware and software solutions that allow capacity to be increased along existing lines.
CP30 recommends a focus on distribution networks because they are somewhat easier to develop than transmission infrastructure due to their lower voltage levels, radial configuration (design meaning power flows in one direction from substation to consumers), proximity to end-users, shower regulatory processes and simpler planning routes.
Cost and benefits of Clean Power 2030
The report states that to deliver clean power by 2030, Great Britain will need to mobilise and deploy an average of over £40 billion of investment annually in energy infrastructure over the next five years.
Still, NESO states that overall system costs should not increase in a clean power system and that other factors could lower energy bills in 2030: a reduction in legacy policy costs (as contracts expire) and energy efficiency improvements.
Indeed, clean power can support wider economic objectives. The £40 billion annual investment can support economic opportunities and new jobs across the UK. CP30 puts the government’s approach as a crucial determinant of the overall costs. Government policy decisions could also reduce bills by 2030.
While at the macroeconomic level, the shift to clean power will be seen as an increase in investment, for consumers it will be felt through its effect on electricity prices and bills.
Dhara Vyas, chief executive designate of trade association Energy UK emphasised the importance of “improving things for customers”, a sentiment that founder and chief executive of UK utility Octopus, Greg Jackson, echoed: “The best path will revolve around customers, not just infrastructure.”
The translation of clean power costs into bill impacts depends on policy choices, including how and when costs are reflected in prices and how they are distributed among different consumers. NESO therefore has not modelled impacts on bills.
The report suggests that, in the medium term, greater strategic coordination can enable delivery whilst supporting the growth of domestic supply chains and a skilled workforce to meet the growing pipeline of projects.
If it can provide greater visibility and greater confidence while unblocking barriers and easing delivery, there may be opportunities for costs to fall. Conversely, if supply chains become excessively stretched, costs could escalate.
NESO’s Slye summarised: “A clean power system for Great Britian will deliver a backbone of home-grown energy that breaks the link between volatile international gas prices; that is secure and affordably powers our homes and buildings; that decarbonises the transport that we take to school and work; that drives the businesses of today and catalyses the innovations of the future.”
