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Embedding flexibility could save £16.7bn by 2050, says Carbon Trust

Image: Carbon Trust.

Image: Carbon Trust.

Flexibility could deliver up to £16.7 billion in saving per annum in 2050 according to a new report from the Carbon Trust.

As such investing in flexibility is a “no-regrets decision” the non-profit has said in its new Flexibility Great Britain report, with building it into decarbonising heat and transport alongside the wider energy system offering net savings that range from £9.6 billion per year up to nearly £17 billion.

Flexibility can be created through a range of technologies, including battery storage, thermal storage interconnectors and demand side response technologies across domestic, non-domestic and electric vehicle (EV) sectors. Across the different scenarios detailed in the report, up to c.48GW of flexibility from EVs, 12GW from domestic smart appliances, 11GW from non-domestic DSR, 83GW of battery storage and 900GWh of thermal storage were deployed.

In all, this represents a significant jump from the current energy system, with 75% of the flexible electrical capacity installed in 2019 coming from gas plants.

The value of such flexibility is created from the avoidance of gas generation, reduced reliance on carbon negative technologies and reduced need for network reinforcements.

In particular, the Carbon Trust looked at weather events that trigger high demand and low generation – such as a cold snaps in winter with low wind – over a 72 hour period, and found that the addition of flexibility helped reduce peak electricity and heat demand, significantly reducing the need for gas and therefore cutting the need for new gas plants, reducing costs overall.

For example, additional flexibility in a fully electric scenario laid out by the organisation could displace over 95% of the Open Cycle Gas Turbine (OCGT) capacity.

In particular, the report considered three different heating scenarios; electric heating, hydrogen heating and hybrid heating – electric with a back-up gas boiler. All three would provide a greater degree of flexibility within the energy sector, with benefits including the ability to balance supply and demand by utilising renewable output and peak electricity demand reduction more efficiently.

Across all three scenarios, there is a substantial buildout of energy supplies, with total electricity required in 2050 hitting a maximum of c.830TWh, or three times the amount needed in 2019. Network build-out will also be needed to both accommodate growth in generation assets and growth in flexible assets like heat pumps or EV chargers, although this can be reduced through flexibility.

The Carbon Trust found that relying on any single heating solution alone will add significant infrastructure challenges, and thus cost. For example, in its fully electric heating scenario, without additional flexibility generation capacity would need to grow to c.422GW from current capacity levels of c.108GW.

As such, choosing a pathway that enables a mix of heat pumps, hydrogen and hybrid systems, combined with carbon capture technologies is likely to offer the lease cost option for decarbonisation.

“Flexibility is vital to unlock value and it is the most important ‘no regrets’ action that can be taken as the UK moves to decarbonise heat, transport and industry, saving billions in investment and operating cost,” said Tom Delay, chief executive of the Carbon Trust.

The report calls for flexibility to be integrated into enabling infrastructure, including low carbon heat and transport solutions from the start.

Distributed flexibility asset can deliver significant value locally, but must be considered at a national level as well to ensure the full value is realised. For example, additional flexibility within Greater London delivers £500 million per year in reduced distribution network costs, but could produce £900 million per year in additional wider system savings.

Therefore, the government should push coordinated planning across the country and energy sectors that builds in flexibility into wider services, ensure the public are engaged and able to access the value of flexibility and that the availability of data is developed.

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