National Grid ESO’s Future Energy Scenarios (FES) 2019 – released last week – outlined four potential scenarios for the next 30 years of the energy system. And for the first time, the Electricity System Operator (ESO) used sensitivity modelling to create a net zero scenario.
Of the four main scenarios detailed in the report, two meet an 80% reduction by 2050. The other two – Steady Progression and Consumer Evolution – do not meet that standard. The ESO concluded that whilst a net zero scenario is possible, it will require ‘immediate’ action across all policy sectors and technologies to reach.
In a net zero scenario, annual electricity demand increases to 491TWh compared to the 422TWh seen in the Two Degrees scenario, resulting in 20% more generation capacity needing to be built. Both renewables and gas-fired generation paired with Carbon Capture Usage and Storage (CCUS) will help to fill that demand, the report says.
An increase in deployment is needed across almost all technologies, including bioenergy, hydrogen when used in transport, generation capacity, CCUS and energy efficiency measures.
Nina Skorupska, chief executive of the Renewable Energy Association, said the report has “reemphasised” the scale of the transformation needed to decarbonise power, heating and transport to meet 2050 targets.
“The strongest decarbonisation scenarios highlight how growth in electrification of transport and heating needs to go hand in hand with energy efficiency improvements and be supported through the use of sustainable bioenergy, especially when combined with carbon capture and storage.”
Skorupska continued to urge the government to deliver “immediate policies” in the Energy White Paper that will accelerate the deployment of a range of renewable and cleantech solutions.
In all scenarios outlined in the report, much higher levels of overall generation and decarbonised generation are needed compared to today. The scenarios with the biggest increase are Community Renewables and Two Degrees, where installed generation more than doubles by 2050.
Of this increase in generation, up to 136GW – or 58% - could be decentralised by 2050. In the Two Degrees scenario, increases in wind and solar output mean that by 2030, renewables could account for almost 80% of total electricity output.
However, both Two Degrees and Community Renewables see periods of excess electricity generation from 2030, rising to 20-25TWh after 2040 in Community Renewables. This electricity can’t be exported due to other decarbonised countries facing similar issues and it can’t be stored as the available storage will be full.
One possible solution to this is incentivising consumers or industries to use excess supply through dynamic time of use tariffs. However, the report also suggests that longer-term availability of zero or negatively priced electricity could influence the develop of hydrogen production and points to the evolution of balancing markets to become more accessible to all provider types. It says that further developments in technology may make it easier for traditionally inflexible generation to change output. These factors could mean that more types of generation are incentivised to reduce output during times of oversupply.
An increase in renewables across all the scenarios, however, means that greater flexibility will be needed.
Several different methods of providing flexibility are outlined in the FES 2019, including demand side response (DSR) from both residential and commercial and industrial (C&I) consumers, electric vehicles through vehicle to grid (V2G) and vehicle to home (V2H) technologies and electricity storage.
C&I DSR increases in the early 2020s in all scenarios, with a marked increased by 2025 as market framework and products become more streamlined. The greatest residential flexibility comes about in Community Renewables, where high roll out of smart meters and large numbers of smart appliances means that peak electricity demand is suppressed by 10% in the late 2030s in homes. This rises to 13.5% by 2050.
However, the pace at which residential flexibility overall grows will depend on a variety of factors, including the speed at which time of use tariffs become common place, the range of smart meters available, the number of residential battery systems in place and the number of heat storage systems.
In terms of transport, the report suggests that 35 million EVs will be on the road by 2050. It predicts that up to 78% of EV consumers could be participating in smart charging by 2050 and up to 14% in V2G, which could provide storage for roughly one fifth of GB’s solar generation.
On a small scale, individuals or businesses could take advantage of this through variable rate tariffs. On a larger scale, the process could be managed by an aggregator, requiring the introduction of new business models.
Lior Handelsman, founder and VP of marketing and product strategy at SolarEdge, said that V2G works but is “blocked” by car companies due to it making the warranty “complicated”.
“They worry that you will accelerate the wear and tear of the battery to the point that you won’t be able to meet the warranty,” Handelsman continued, adding that despite warranty issues “we are on the way there”.
V2G is soon to be economically viable, according to a report led by Element Energy that was published last month. However, Citizens Advice has warned that smart charging and V2G schemes will fail if consumers aren't placed at the heart of them.
Outside of transport, electricity storage capacity as a whole increases in all four scenarios, with a particular need for larger, longer duration storage, due to increases in intermittent renewables. Growth is supported through the continued fall in battery costs and developments in other storage technologies.
Ben Irons, co-founder of Habitat Energy, said that as costs of storage and solar continue to fall, “a tipping point” has passed, allowing “billions of pounds of unsubsidised investment to be unlocked”.
“As such, we believe even the most optimistic FES scenarios can be substantially outperformed in coming years, with more renewables, storage and EVs and faster decarbonisation that considered.
“It’s great to have a roadmap to zero carbon and this rigorous, cross-sector study of what a zero carbon future could look like. But a climate emergency requires urgent action. We have to make the next five years count,” Irons continued.
However, the ESO makes the assumption in all four scenarios that storage projects will need multiple income streams to be commercially viable, suggesting that price arbitrage, balancing and ancillary services and providing services to network operators could be potential revenues.
Alongside mapping out transport’s potential in flexibility through V2G, the FES 2019 report also details the effect greater electrification could have on demand.
The total energy demand across all scenarios is similar, but the speed at which decarbonisation occurs varies. By 2050, total energy demand reduces from today’s 500TWh to 200TWh. This is due to the shift towards EVs, which use less energy per mile.
In the Community Renewables scenario, almost all road transport is powered by electricity by 2050, although some vehicles with high mileage or that carry heavy loads will use hydrogen or natural gas.
In the Two Degrees and Community Renewables scenarios, the ESO expects that plug-in hybrids (PHEV) will no longer be used as stepping stones to battery electric vehicles due to changes to the plug-in car grant which it says encourages the purchase of lower-emission vehicles than PHEVs.
Reaching net zero
Whilst the role of EVs and demand response in the report is encouraging, and the inclusion of a net zero scenario is “pleasing”, more needs to be done from government, said Alastair Martin, founder and CSO of Flexitricity.
“Setting the target is the easy part, however we now need a commitment to deploying cleaner technologies and strategies that will power our homes and industry and provide cleaner modes of travel.”
And Kyle Martin, head of market insight at LCP, said analysis in the FES 2019 shows that to meet net zero by 2050, “there is no part of our economy that escapes the need to decarbonise rapidly”.
“Greater electrification of heat and transport will require the power sector to decarbonise further and faster while technologies like CCUS are needed for harder to reach parts of the economy.
“Much of the infrastructure needed to realise these targets have significant build times and costs associated with them. Government will need to ensure that the Energy White Paper provides the frameworks to allow industry to deliver these projects.”