In the UK, energy policy space the gap between mega top down design and micro bottom up initiatives – particularly the space covered by municipal authorities – has become more evident.  This has highlighted the omission of the impact of non-incremental and social equity issues in UK energy policy design.  There has also been a substantial increase in the business models and actors who have until only recently played a passive or marginal role in energy system change.  The implementation of an increasingly broad suite of low carbon policy and energy systems research has also allowed a better idea to be developed as to the implications of attempting to transform the UK energy system in such a tight timescale in a liberalised and regulated energy market.

Many of the present suite of policies and research are, however, based on a set of mega trends and uncertainties established in scenarios developed some time ago.  There is a need to integrate the most recent developments into the work of ERP, those of the members and the broader energy space.

The project aim is to: identify what the main uncertainties that will impact international and UK energy sector development which might need to be considered over a number of timeframes.

Project Outputs

The project will deliver the following:

• A living document will be developed on an ongoing basis on a shared site as the project develops;
• Changes Slide Decks and Summary paper for assessments undertaken of different sectors of the energy system;
• Scenarios from key issues picked up in the horizon scanning component of the project will be produced;
• Energy, Policy and Financial Modelling based on one of the scenarios will potentially be produced by The Grantham Institute, UKERC and the Carbon Tracker Initiative, respectively; and
• Overarching Final Report in the format of the ERP Energy Innovation Milestones Report with accompanying slide deck targeted at policy makers and industry.The ERP Energy Innovation Milestones work might be turned into a Grantham Briefing Note to appeal to a broader policy audience.

Conclusions & Recommendations

TBA

Follow-up activities & Impact

The work is to be synchronised with the Committee on Climate Change’s 5th Carbon Budget (2028 – 2032) recommendation for December 2015 and the Carbon Plan that will be developed in government to meet the carbon budget in Q1 and 2 in 2016.

Steering Group

Project Chair: Professor Jim Watson – Research Director UKERC

Steering Group:

• Dr Jeff Hardy – Ofgem
• Dr Geoff Darch – Atkins
• Jim Maltby – DSTL
• Alyssa Gilbert – Grantham Institute

Steering Group Advisor:

• Dr Wendy Schultz – Infinite Futures

Further information

Please contact ERP.

However, recent surveys have identified that some UK executives, particularly those in the manufacturing sector, are concerned about the availability of metal mineral resource inputs and the economic impact that it may have on UK competitiveness  – potentially jeopardising energy goals and green growth opportunities. The Energy Research Partnership (ERP) has undertaken a review of mineral resources in order to assess whether resource availability will represent a significant risk for UK energy innovation and system development to 2050; it was undertaken with UKERC’s work on Minerals Availability. The review has highlighted the following key issues regarding the availability of metal minerals:

• Resources concerns are not a new phenomenon.  Recent concerns have been stoked by the rapid rate of growth of emerging economies and ecological impacts of resource consumption.
• Energy systems are increasingly dependent on metal minerals as a result of the proliferation in the use of exotic elements and the increased mineral intensity of new energy technologies; many are essential in the development of the low carbon energy system to 2050. Consideration of primary supply of minerals is important in the near term, not only because of the expansion of energy systems but also because the long lifetime of assets means that minerals are `locked-in’, unavailable for recycling for many years.  Recovery and recycling, however, are likely to be critical and should be taken into account in current decisions.

Project

This project was given the go-ahead at ERP’s April 2012 Plenary meeting. A Steering Group initiation meeting took place in mid-2012 with a view to producing preliminary findings and a final report (a joint ERP-UKERC publication) in late 2014.

The report has now been released with a summary policy paper and a full policy paper available to view.

Conclusions and recommendations

The key messages from the review are:

• The most potentially significant metal minerals constraint risk to UK energy innovation and system development to 2050 may be posed by the volatility in price and potential disruptions to the availability of `technology metal minerals’ used in both conventional energy generation and low carbon technologies. Supply uncertainty is the key concern. The availability of technology metal minerals at reasonable economic costs is essential to facilitate the rapid commercialisation of the low carbon energy system.
• Although there is no absolute shortage of any metal mineral resources, absolute availability is not a meaningful guide to prospective future production and availability, because of the impacts of economics and geopolitics. The key constraints are related to the volatility of price and potential supply disruptions. The uncertain abilities of ecological sinks to assimilate anthropogenic generated waste from the exploitation and processing of metal minerals are likely to present further challenges.
• Resource risk assessments require a system based perspective, especially of supply and demand side issues in order to account for market dynamics and ensure the development of appropriate policy responses. There is a concern that some metal mineral assessment tools are likely to lead to inadequate and miss-directed policy responses.
• The impact of metal minerals non-availability on the UK economy has yet to be quantified, and is likely to be similar to other mineral consuming nations. However, the UK’s response to the issue has tended to be non-interventionist. This is in contrast to proactive initiatives that other governments are taking, particularly in the securing of upstream supply and funding research into developing secondary sources. In the long run, the UK is therefore likely to be at a comparative disadvantage and should markets remain tight, the ability to develop a high value manufacturing sector could be jeopardized and the value creation opportunities of implementing mineral security measures will be missed e.g. material efficiency through better design, reuse and recycling technology development.

With these in mind, the ERP makes the following recommendations to ensure the UK has a globally competitive energy innovation sector:

• The location of responsibility for the monitoring of metals mineral non-availability risk and opportunities should be better defined in government.
• Resources risk assessments require a more holistic perspective of supply and demand side issues, on a mineral by mineral basis, in order to account for market dynamics and ensure the development of appropriate policy.
• Market transparency and the needs of upstream supply actors should be a priority. Transparency measures include the development of awareness of minerals use in energy technologies, impacts of minerals policies enacted by supplier nations, improved datasets and more open pricing mechanisms should be encouraged when there is sufficient liquidity.  Primary supply initiatives include increasing the availability of risk capital for Junior miners exploration operations in unstable regions and encouraging investment and R&D in refining capacity.
• Investment into recycling, materials efficiency and substitution research initiatives should be improved and co-ordinated with the UK manufacturing and design sector – with immediate attention on design for recovery and recycling.  Awareness of the impacts of the interaction of these policies needs to be researched.

Follow-up activities

TBA

Working Group

Project Chair: Martin Grant – Atkins

Project Steering Group:

• Richard Neale -Atkins
• Ian Glover -National Grid
• Simon Cox -Defra
• Rebecca Heaton -Shell International
• Duncan McLaren – Friends of the Earth
• Cameron Rennie – BP
• John Miles – Arup
• Chris Franklin – Research Councils (NERC)
• Jocelyn Bleriot – Ellen MacArthur Foundation
• Simon Schillebeeckx- Imperial Business School

Key Insights

Key insights of the review include:

Abatement Trajectories for Respective Nations.

• All the nations in this review, with the possible exception of the US, will become increasingly energy insecure to 2020 and 2050.  The deployment of renewable and nuclear power is seen as a way of addressing energy security concerns as well as fulfilling respective environmental agendas.
• The UK is pursuing similar abatement programmes to the other countries in this survey – switching from coal to gas, maintaining nuclear (except in Germany) and with regards to renewables generation, predominantly deploying wind, biomass and solar technologies.
• All nations both in the OECD and rapidly emerging economies have energy efficiency and demand side management (DSM) programmes to reduce capital build requirements although these vary widely in scale, potential and ambition.

Capital Intensity of UK Power Generation Capacity Development to 2020.

• Despite the energy efficiency and DSM programmes, all nations have highly capital intensive generation build programmes.  In terms of net capacity build to 2020, as a function of present capacity, the UK’s projected increase (17%) is on a par with the US (12%) and Japan (10%) and substantially less than Germany (26%), China (91%) and India’s (123%) – though in absolute terms China’s addition of 840 GW is the largest outlay of generation capacity.
• In terms of value capture opportunities based on the deployment activity, the UK needs to consider how best to establish energy research and industrial policy frameworks to help grow, and capture value within international (low carbon) industrial value chains where the competitive advantage for process innovation will almost certainly lie in Asia.

Collaborative Opportunities based on National Deployment Rates and Patterns.

• Different opportunities will arise in different phases of abatement technology development, necessitating different types of collaboration.  Based on national deployment agendas (TRL 9), this work has identified, at a high level, indicative areas that the UK would be in a position to collaborate and the type of collaboration, on a sectoral basis within this group of countries – this is detailed in section 4 of the report.

Follow-up activities

The review has fed into the following areas of government engagement:

• A policy note to government.  A policy briefing summarising this work was sent to Greg Barker on 20th July 2011.
• Feeding into the Global Strategic Trends 5 (2014) publication on Energy Technology Development to 2045.  The Futures Team, Development Concepts and Doctrine Centre, MOD Shrivenham requested input to sections on energy and transport technology for the Global Strategic Trends 5 publication based on the material in this review.  The Global Strategic Trends 5 publication maps global macro-drivers upon which the MoD and other government departments base their strategic planning; the next publication makes forecasts to 2045.
• Feeding into the ERP International Engagement Project.  The ERP International Engagement project seeks to improve the resolution of the collaborative component of this work by matching up UK capability to develop technologies, the relevance of the technologies to energy systems and the potential for business to exploit the technology to provide a comprehensive assessment of areas where the UK should engage with other nations for business value creation, technology transfer and/or collaboration. Material from this review will assist in that work.

Working Group

• Project Chair: Tom Delay – The Carbon Trust
• Richard Neale – Atkins
• Duncan McLaren – Friends of the Earth

Further information

IEA Energy Technology Perspectives

Grantham Institute for Climate Change

UNEP: The GAP Report

Conclusions and recommendations

Management of the UK support for bio-energy

• Substantial benefits would flow from a co-ordinated ongoing, integrated bio-energy strategy involving all government departments and executive agencies concerned with the sector.
• This should be facilitated by the Department of Energy and Climate Change which should be recognised as the department responsible for leading the development and implementation of the strategy.
• There should be clear identification of roles for respective government departments in the UK bio-energy value chain and increased specialist bio-energy capacity within each department.

Focus of UK research on bio-energy technologies

• There should be continued support for research in a number of existing areas that will underpin the successful development and deployment of bio-energy, such as plant science, applied agronomy and conversion technologies.
• Exploratory work in a number of new areas, should be subject to ongoing review, including:
  • use of algae within a wider research remit of which a component should be for energy;
  • bio-energy with CO2 capture and storage;
  • the potential for liquid “drop-in” bio-fuels that could be substituted for conventional fuels; and
  • investigation of the opportunities for development of large scale bio-refineries.

Support for development and deployment of bio-energy

• Better global information on land use, and understanding of how to optimise the use of available land to produce food, fibre and energy in a sustainable and cost-effective manner.
• More work should be done with other countries through collaborative research programmes, which would allow the UK to benefit from advances elsewhere.
• The development of extension services for the education of farmers on sustainable farming practices.
• Re-consider EU GMO policy with the need for public engagement.

Support along whole of the UK bio-energy supply chain to minimise financial risk (from farmer to end-user).

Follow-up activities

The ERP sought to follow up on the key recommendation that ‘There is an urgent need for of strategic oversight, policy alignment and coherence of the components involved in the UK bioenergy sector.  Without this the UK risks missing the opportunity to optimise the contribution of bioenergy in the energy system for pathways to 2050.’

To this end, the ERP sponsor undertook meetings with Bernie Bulkin (ORED) and David MacKay (CSA to DECC) to further this and other recommendations in the ERP review, and Steering Group members also met with the Climate Change Committee (CCC).  A discussion paper was also produced in response to the CCC Bio-energy Review released in December 2011.

Key outcome from engagement activity was the development of the cross-departmental working group on bioenergy.

Working Group

Project Sponsor – Dr Graeme Sweeney, Executive Vice President CO2, Shell International

Dr Rebecca Heaton – Shell International

Dr David Penfold – The Carbon Trust

Marcus Stewart – National Grid

Dr Robert Sorrell – BP

Charles Carey – Scottish and Southern Energy

Dr Susan Weatherstone – E.ON

Duncan Eggar – BBSRC

Thanks to the contributions of Professor Robert Lee (Shell International) and Steven Vallender (National Grid)