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Future Resilience of the UK Electricity System

The Energy Research Partnership (ERP) has brought together a range of stakeholders from across the energy sector to develop a common view on the future resilience of the UK Electricity System.

The work has identified a range of emerging trends that are changing the way we operate the electricity system and will need to be acted upon to assure we have a resilient electricity system in the future. In response to these trends a number of recommendations have been made that require action over the next decade to assure resilience of the electricity system in the future.

The ERP believes is important to recognise that there may be low regret decisions and investments that we can make in anticipation of these future trends, with an overall lower cost and greater system wide benefit than if we respond to them as they arise. A key enabler to making these decisions will be achieving cross industry agreement on what we mean by resilience and how we measure it. In producing the report, the ERP has already started this process, and brought together a wide range of industry and government players to enter this debate.

Looking forward, much more needs to be done. The industry needs to engage with society and business to clearly establish their needs and expectations and how they can be met. This in turn should help shape and inform government and policy, with a new resilience taskforce working across the energy sector to help lead the changes. In particular, resilience needs to be ‘baked in’ to the regulatory regime, to ensure that together, all players can reduce the impact of any threat to network infrastructure, either proactively through design or by being ready to respond quickly to restore energy supplies. The report highlights the need to continue work with government agencies to assess cyber security risks and put in place the necessary protection to counter any potential threat.

Above all, the ERP anticipates that by assuring we have a resilient energy system in the future, whatever threats may try to compromise its operation, we will continue to make the UK an attractive place to build the global businesses of the 21st century.

 

Resilience Event
The ERP will be holding a Resilience Event in January at the Energy Systems Catapult in Birmingham where the report and its findings will be presented and discussed by key Working Group Members. If you would like to attend this event, please register in advance at: https://www.eventbrite.co.uk/e/erp-future-resilience-of-the-uk-electricity-system-tickets-52904543915

 

Project Scope
The project scope was developed with support from Working Group Members (ERP members and project advisors). This report is based on information provided by each Working Group Member where they set out their organisation’s view on the UK electricity system resilience and the potential future impact of the changing energy landscape. All working group members discussed and shared findings at a workshop held at the Department for Business, Energy and Industrial Strategy in June 2018. The industry views from the responses submitted, and the workshop are represented in this report.

 

Resilience Working Group

ERP Members
ABB
Arup
Atkins, member of SNC-Lavalin Group
Department for Business, Energy and Industrial Strategy
EDF Energy
Environment Agency
Energy Systems Catapult
National Grid Electricity Transmission
National Infrastructure Commission
Welsh Government

Project Advisors
Energy Networks Association
Electricity North West Ltd
Northern Power Grid
Scottish Power Energy Networks
UK Power Networks
Scottish and Southern Electricity
University of Manchester

Heating Buildings: Reducing energy demand and greenhouse gas emissions

 

Heating buildings

Background

Heating buildings accounts for 25% of the UK’s energy demand and 15% of its greenhouse gas (GHG) emissions.  Cost-effective GHG emission reductions are available for space heating via demand reduction and fabric energy efficiency, which reduce the residual heat demand that will have to be met by low-carbon heat sources.

High fabric energy efficiency is undoubtedly the best approach for new buildings: it maximises the time over which the measures can act, causes no disruption for occupants, and avoids the greater costs and disruption of future refurbishment.  Ambitious improvements to fabric energy efficiency are challenging for many existing buildings, but should be considered wherever possible and affordable, because if major improvements are not made, the UK could be left with a residual heat demand that is too large to allow sufficient reductions in GHG emissions using available low-carbon heat sources.  The UK would face an insurmountable back-log of retrofit projects, including to upgrade new buildings that have missed the opportunity to adopt leading practice from the start.

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Conclusions & Recommendations

To address the current slow rate of improvements (the “uptake gap”) the UK must aim for leading practice in new buildings, and must accelerate the deployment of retrofit solutions for existing buildings.

Increasing the uptake of improvements is not enough: experience has shown that when improvements are carried out, results are disappointing due to a combination of unrealistic expectations of the impacts (the “prediction gap”) and an under-delivery in actual performance (the “performance gap”).

New measures are needed to address these three gaps for space heating: these must be adopted in a pragmatic manner, without pursuing spurious precision or allowing “the best to become the enemy of the good”.  Deployment must continue for measures that are known to bring benefits, even if exact impacts are uncertain; and early stages of deployment should be treated as a “safe learning environment”.

For retrofit quality, the Bonfield Review was commissioned to consider customer advice and protection, the standards framework, and monitoring and enforcement.  For new-build, all customers already pay the costs for stipulated energy performance, but only some receive the intended benefits: the sector does not necessarily need more energy regulation, but rather more effective regulation through better use of monitoring, testing and enforcement.

 

We recommend actions to provide ambition and certainty in regulations for the building industry, new approaches to increase the appeal of retrofit to leverage customer interest, research to improve understanding of heat use in buildings, and better quality control and enforcement to deliver performance in practice.

  1.  To guide buildings’ energy policies and regulations to be commensurate with the UK’s Carbon Budgets, a cross-departmental group should be established with membership from DCLG, BEIS, and relevant organisations (e.g. National Infrastructure Commission), aided by the establishment of an expert advisory panel.
  1. To provide ambition and certainty for the building industry, DCLG should produce a regulatory trajectory for building energy regulations that reaches leading performance in fabric thermal efficiency, and should maintain this trajectory. 
  1. To leverage customer action on energy efficiency, DCLG should improve its use of light-touch regulations: Display Energy Certificates (DECs) should be applied to all public buildings and promoted for private buildings; Energy Performance Certificates (EPCs) should be promoted more effectively as an important part of purchase and rental decisions. 
  1. To increase uptake of retrofit solutions, product manufacturers and installers should better promote retrofit options and should develop more appealing products, installation methods and “retrofit packages”, with support from heritage groups for older buildings and with engagement from government for the development and implementation of policies. 
  1. To increase understanding of thermal performance in buildings, the Energy Systems Catapult (ESC) should expand its network for access to test facilities and expertise to include tests of thermal performance, and should maintain its buildings trials as a longitudinal study and control group for other studies.
  1. To improve thermal performance in practice, product manufacturers should take a greater role in training and quality control in installation, and the building inspection regime should improve its use of tests and enforcement (better regulation, not necessarily more regulation) including conducting truly random spot checks of energy performance.

Follow-up activities

The report includes a number of actions that can be taken in support of the recommendations, and we will work with relevant organisations to identify opportunities to advance these actions.

The ERP’s Low-carbon Heat event on 11th October 2016 presented the ERP’s reports on Heating Buildings and The Potential Role of Hydrogen in the UK Energy System, and will introduce the ERP’s new project on Low-carbon Heat.  This project is building on conclusions about heating options from the Buildings and Hydrogen projects to understand implementation issues for customers and utilities, and implications for energy systems.  The event included perspectives from guest speakers and opportunities for attendees to contribute views on the priorities for the Low-carbon Heat project.

 

Steering Group

Project Chair:

  • John Miles, Arup / Cambridge University

Steering Group (please note that some members have since moved from these organisations):

  • Ron Loveland, Welsh Government
  • Simon Hancock, Atkins
  • Rufus Ford, SSE
  • Simon Hyams, ETI
  • Ben Westland, Scottish Enterprise
  • Hunter Danskin, DECC
  • Ken Bromley, DCLG
  • Jeff Hardy, Ofgem
  • Ute Collier, CCC

Further Information

Please contact Dr Simon Cran-McGreehin from the ERP Analysis Team.

Transition to low-carbon heat

Meeting the 2050 targets means the UK energy system will need to transition to low-carbon heat. Changes will be needed to how we heat our homes, buildings and industry. Supplying natural gas or oil directly into homes will need to be replaced by a decarbonised gas or by electric heating or heat network.

But it is not a simple choice: each option has challenges that could limit their deployment. A combination of options is likely to be required; no one option may not dominate, as natural gas currently does. Demand reduction will be an essential part of a cost-effective transition.

The scale of the challenge should not be underestimated. The social aspects are as challenging as the technical. The capital investment means the cost of heating will rise during the transition.

Timing is crucial. Preparations need to begin now, to inform the long investment cycles over the next 30 years.

Several low-carbon heating options need to be pursued in parallel now. Early in 2020s, critical actions and decisions will need to be taken, by Government, to avoid closing-off options, undermining their potential, or increasing their costs.

  • Determining the extent to which hydrogen could be used to decarbonise the gas system, is critical. Carbon Capture and Storage (CCS) will be essential.
  • Government support for trials of key technologies is needed now.
  • No and low-regrets options should be supported now.
  • High efficiency standards for new-buildings need to be set and enforced.
  • A robust retrofit energy efficiency programme for existing buildings.

Addressing the social aspects of the transition needs to be a priority and requires early engagement with the public, alongside the development and coordination of financial policies, incentives, regulations and business models.

  • Engagement with the public will be crucial and needs to start now.
  • A new narrative for heating and hot water, to recognise that costs will increase.
  • Energy efficiency should be pursued to reduce the costs.
  • Decide how to address the distributional impacts.
  • Prioritise new financing mechanisms and market structures.

A long-term strategy to manage the transition, which engages with the public and coordinates the diverse range of parties, with a clear decision-making framework. 

  • Integrate decisions on heat with transport, industry and power generation.
  • A heat delivery body to facilitate national, local and commercial decision making.
  • Early engagement with the public will be crucial – as will a clear narrative

Project Events

The project’s report was launched at an event in October 2017.  For more information, please contact Richard Heap.

A workshop on 18 July 2017 tested the analysis on the deployment potential and challenges of the various low-carbon heating options. Details of the workshop can be found here.

January 2017 ERP convened an industry workshop to explore the challenges of deploying heat pumps (see project outputs for a note of the meeting).

The low-carbon heat project was launched in October 2016  (more information is available on the event page).

Steering Group

  • Carl Arntzen, Bosch Thermotechology (Steering Group Chair)
  • Chris Jofeh, ARUP
  • Steven Cowan, Atkins
  • Olivia Absalom & Andy Davey, BEIS (observer)
  • Joe Cosier & Simon Messenger, Energy Saving Trust
  • Jeff Douglas, Energy Systems Catapult
  • Sarah Deasley, Frontier Economics
  • Mark Thompson, Innovate UK
  • Janet Mather, National Grid, Gas SO
  • Rufus Ford, SSE (seconded to BEIS)
  • Kathleen Robertson, Scottish Government
  • Keith MacLean, Independent / UKERC
  • Ron Loveland, Welsh Government
  • Amber Sharick, UKERC

Additional Sponsors

We would like to thank the following organisations for providing additional funding that allowed the project to run to completion. They also provided additional technical input and advice.

Bosch
Energy Saving Trust
Innovate UK
Cadent
Energy & Utilities Alliance EUA
BEIS
SGN
Institution of Gas Engineers & Managers IGEM

Community energy and the low-carbon transition

Background

Community energy can be broadly defined as energy projects in which local residents and businesses have a shared stake and are the main intended beneficiaries.  Community energy has the potential to engage local communities in energy matters, with the aim of bringing two main benefits for the low-carbon transition: acceptance of change, and engagement with energy.  Projects can also be methods of delivering other benefits for communities.  Motivations include political objectives, local priorities, and some consumers’ desire for more control of their energy affairs.

The Energy Research Partnership (ERP) has produced a discussion paper on community energy in the UK.  The paper presents examples of community energy in the UK and other countries, highlighting the motivations, benefits, costs and risks, and identifying challenges that community energy faces in the UK.  Those challenges are grouped into: assessing outcomes, deploying projects, and delivering benefits.  The paper considers how to improve the assessment of projects, and to improve the understanding of the role of community energy in the UK in order to determine whether its net impacts (and their distribution) justify addressing the challenges that it faces.

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Conclusions & Recommendations

  • There are examples from around the UK and from other countries in which community energy has delivered benefits in the energy sector (public acceptance of change, and engagement with energy), as well as wider social benefits for communities.
  • There is a need for improved assessment of projects in the UK, and improved understanding of community energy’s role in the UK in order to determine whether its costs and benefits (and their distribution) justify addressing the challenges that it faces. We recommend:
    • improving assessment of projects, and providing guidance for decision makers;
    • facilitating studies by providers of technology and services; and
    • conducting studies to review existing projects, monitor new projects, and trial alternative arrangements for local energy.
  • There are opportunities in the short-term to increase the uptake of projects (including for conducting studies) and to improve the delivery of expected benefits. We recommend:
    • provision of tailored advice to project groups; and
    • provision of opportunities to delegate administrative tasks.

Follow-up activities

We will work in autumn 2015 with community energy support groups, policy makers and research funders to progress our recommendations, focusing on the proposed research.

Steering Group

Steering Group chair:

  • Naomi Luhde-Thompson, Friends of the Earth

Steering Group:

  • Anna Wieckowska, Hitachi
  • Laura Morris, ETI
  • Christian Inglis, Innovate UK
  • Chris Noyce, ESRC
  • Fiona Booth, DECC
  • Ron Loveland, Welsh Government

 

International Engagement

International Engagement shutterstock_94735291

Interconnected World

Background

Development of energy technologies that can significantly reduce global carbon emissions will require an international effort. Initiatives from the EU, IEA and G8 demand that the UK take a strategic approach in involvement in international activities, which should include public and private sectors.

Aims

For each technology area there are 3 categories of international engagement beneficial to the UK:

1) The UK leads and there is an export opportunity
2) The UK is on a par and needs to work with peers to develop a technology
3) The UK is behind but requires the technology

The primary aim of this work is to provide guidance for high-level visits to other countries, so that the agendas pursued and agreements signed are in the UK’s interests according to the category of engagement sought. Output will therefore be in the form of a living document. It will contain guidelines specific to technologies and potential partner countries, useful to anyone involved in international activity anywhere along the innovation chain. Initially the ERP will be an appropriate and neutral home for this.

Secondly the aim is to provide guidance to technology experts on the location of the main hotspots for key low carbon technologies.

Connections with other work

The Technology Innovation Needs Assesments (TINAs)s, commissioned by the Low Carbon Innovation Co-odrination Group (LCICG), are forming a good starting point to this work, although not all areas are covered. DECC are carrying out some work in this area and Innovate UK (Brussels Office) have made some assessments also. These works will be key to ensuring there’s no repetition of effort.

Steering Group

Currently Innovate UK, Welsh Government & DECC, but further input is sought, especially from ERP’s Industrial Members.

 

An Economic Value Assessment of Low Carbon Pathways (EVAP)

Background

Existing works on low carbon pathways and policies have focused on ‘the energy trilemma’: cost of energy, security of supply and carbon emissions, often with a significant emphasis on cost effectiveness. In particular, importance has been placed on achieving the lowest costs in the short-term, with decreasing costs in the long-term.

An area that has been relatively neglected within the development of pathways and scenarios (and related models) is the value and impact of pathways on economic growth (measured in GDP/GVA) and analysis of other socio-economic effects, including at regional levels. Reasons for this relate to current modelling interests and capabilities, and a lack of existing ‘top-down’ or ‘spatial’ models utilised within the UK.

It is well known and accepted that economic and socio-economic impacts can be intangible and complex to measure and define, but there are some existing UK models that can and do assess them.

ERP’s paper addresses the issue of how the UK currently considers and assesses economic impacts and benefits within five of the UK’s major pathway and scenario works. It additionally considers modelling capabilities (now and in future) and highlights other relevant models or works that can assist with analysis in this area. Works assessed within the paper are:  1) CCC’s 4th Carbon Budget Review, 2) DECC’s 2050 Pathways/Calculator & Analysis (with some extra consideration of the Dynamic Dispatch (DDM) model), 3) ETI’s ESME model, 4) National Grid’s Future Energy Scenarios (RESOM model) and 5) the MARKAL ELASTIC DEMAND model used to inform two of UKERC’s Energy 2050 scenario works. The work additionally considers the MARKAL-MACRO and Cambridge Econometrics’ MDM-E3 models.

The paper concludes by making recommendations for how further analysis of economic and socio-economic impacts can be carried out – by utilising appropriate modelling capabilities (existing and new), to help inform policy from both a top-down and bottom-up perspective of the energy system.

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This project:

  • Provides a broad overview of how the UK currently considers and assesses economic impacts and benefits within some of its major pathway and scenario works.
  • Checks for consistency in the use of these approaches across relevant scenarios and reports.
  • Considers modelling capabilities (now and in future) for making these assessments and highlights other relevant models and works that can assist with analysis in this area.
  • Provides a summary of key findings and recommendations for potential future work to be taken forward by other organisations/departments.

Key Messages

  • Assessments of economic growth and job creation within low carbon pathways have been relatively neglected, although it is accepted that these are complex to measure and define. Current modelling types and approaches tend to focus on 1) cost-optimisation and 2) achieving the carbon targets. There is also a lack of clarity regarding input assumptions used.
  • Many works are not designed to make these assessments (it is not within their remit) and incorporating this type of analysis within the models assessed is seen as unfeasible. Impacts on a regional level within the UK (Scotland, England, Wales etc.) are complex to capture and are therefore rarely assessed.
  • The type and limited number of macro-economic ‘top-down’ energy models being utilised currently constrains the range and reliability of assessments informing policy. Although these models exist (e.g. the Cambridge Econometrics’ MDM-E3), many are not set up to assess the economic value of low carbon pathways and the range of economic and socio-economic impacts of interest to policy-makers.
  • There is a level of uncertainty regarding current and future modelling capabilities (models are designed for a specific purpose and are not always adapted) and a range of opinions as to whether these assessments should be included within pathway and scenario works.

Recommendations

This study has looked at a variety of models and criteria used to make judgements about future low carbon pathways and potential benefits to the UK. It is clear that further work is required to better understand the full range of models available in government, industry and academia to support this assessment, their limitations and how they interact with whole economy models. Recommendations therefore include:

  • Further investigation is required to consider how and whether models can be used for more in depth socioeconomic assessments;
  • The integration of existing model types should be considered, to enable more socioeconomic analysis and inform policy at a more strategic level.
  • Clear communication and transparency regarding the design, premise and limitations of modelling works should be encouraged to avoid the risks of misinforming policy e.g. the effect of economic input assumptions on results obtained.
  • Continued and more detailed work to assess the impacts and benefits of specific technologies for GDP, job creation and investment opportunities is encouraged, including at regional levels.
  • Analysis of economic growth and job creation should be included as part of, or alongside pathway and scenario works wherever possible. This may involve an additional element of secondary analysis.
  • Greater funding support is required for the development of these model types – to improve the quality of outputs and understanding of their potential.

A full list of recommendations and associated ‘Next Steps’ can be found in the Summary Paper and Final Report.

Steering Group

  • Chris Pook (BIS) – Steering Group Chair
  • Tom Delay (The Carbon Trust)
  • Rob Saunders (TSB)
  • Will Lecky/Adam Harmon (DECC)
  • Emma Edworthy (Welsh Government)
  • James Bolton / Aftab Malik (BIS)
  • Kenny Richmond (Scottish Enterprise)
  • Eric Ling (CCC)

 

Engaging the public in the transformation of the energy system

It is clear that the public have a significant role in determining how the transformation of the energy system progresses. While largely supportive of a sustainable energy system the public’s trust in energy companies and government to deliver it is currently low. Published in May 2014, ERP’s ‘Engaging the Public in the Transformation of the Energy System’ report looks at how to restore this trust, which is vital if the public is to be expected to engage in the transformation, both in terms of informing decision making and undertaking changes at an individual level.

Engaging the Public in the Transformation of the Energy System, strategic narrative tagxedo.com

Background

For the UK to meet its mid- and long-term policy targets of a secure, low-carbon and affordable energy system a considerable transformation will be needed, requiring new technologies to be deployed along with changes to the way energy is used, distributed and generated. Spanning several decades there are still considerable uncertainties about how this will develop. It is clear that the public will interact with these changes at several levels: whether in deployment of new infrastructure or technologies in the home, or changes in behaviour. Involving the public is therefore essential, but understanding how and why is vital to ensure the transformation to a sustainable energy system is acceptable and successful.

Conclusions & Recommendations

The report explores the strategic importance of engaging with the public and the need for those involved in commissioning it, including in government and the private sector, to use it to improve decision making in the delivery of the energy transition. The value of understanding the publics’ point of view through good, early engagement is emphasised and a structure for engagement is set out with some key principles to improve the outcomes.

The work recommends developing a Strategic Narrative that can put into context the various programmes necessary for delivering the energy transition. Developed through early engagement with the public and stakeholders involved in the transition, this Strategic Narrative would help build trust and understanding of the long-term objectives and in those parties involved in delivering them and would also increase the amount and quality of engagement.

Follow-up activities

Narratives are recognised as being effective communication tools particularly for complex issues. For an issue that is as broad, complex and multi-faceted as the transformation of the energy system a high-level narrative is needed to provide a come shared purpose and demonstrate coherence to the various activities and policies needed to achieve it. Engaging the public is vital to help identify the key components of the Strategic Narrative.

ERP held a workshop in July 2014 to develop the process for developing a Strategic Narrative, with the help of Dialogue by Design and Involve. We are looking at holding a further workshop to explore the issue further in 2015.

Steering Group

The report was prepared by the ERP Analysis Team, led by Richard Heap.

ERP initiated this project recognising the importance of engaging with the public in the transition to a sustainable energy system. The work has been informed by a series of interviews and a workshop that brought together representatives from academia, industry, NGOs and the public sector. This workshop helped identify areas that are important for effective public engagement. Details can be found on the link above.

  • Steering Group Chair: Ron Loveland (Welsh Government)
  • John Loughhead (UKERC)
  • Duncan McLaren (Friends of the Earth)
  • Peter Snowdon (Shell International)
  • Meryl Hicks (BP)(to Feb 2014)
  • Janine Freeman (National Grid) (from Jan 2014)
  • Adam Cooper (formerly DECC) (until Sept 2013)
  • Ewan Bennie (DECC) (from Jan 2014)

Further Information

Please contact Richard Heap from the ERP Analysis Team.

Public Engagement Workshop, 10 May 2013

As part of ERP’s public engagement project a workshop was convened on 10th May 2013 to help inform the work. The workshop brought together a cross section of academics and public and private sector colleagues with a range of experiences in public engagement.

The purpose of the workshop was to:

  1. Consider the different types, levels and meanings of Public Engagement & how best to choose which engagement process(es) to use, with whom and when;
  2. Understand concerns and barriers around the (wider) use of Public Engagement regarding energy-related policies, projects or technologies and how these may be mitigated;
  3. Identify areas for further research or exploration around energy related policies, processes or technologies, where Public Engagement can add value and better informed choices;
  4. Actions, Evaluation & Way Forward

It was chaired by Ron Loveland and facilitated by Sciencewise, with Lord Jenkin of Roding providing the closing remarks. Details of the meeting, presentations and outcomes can be found below.