Energy key topics
Addressing key topics within the energy sector.
The huge challenge for energy policy is to enable energy supply to be secure, low carbon and affordable. If current UK government policy objectives are to be achieved this will require an investment of £250bn in electricity alone by 2020, and will transform the industry. It will be
“the biggest peacetime programme of change ever seen in the UK”
Generating the Future: UK energy systems fit for 2050
Royal Academy of Engineering, March 2010
In accordance with the oft-quoted Energy Hierarchy, devised by the IET in 2007, priority should be given first to the reduction of energy use and second to the efficiency of energy use before seeking to meet energy demand by the cleanest means possible.
IET energy principles
Security of supply
- Concern over security of primary energy supply is receiving increasing Government attention and seen as a source of potential geo-political tension in the decades to come. Much of the concern is focused on oil and particularly gas supplies now that the UK has become a net importer. However the large scale development of shale gas in the USA has opened up the global gas market to a degree, and may reduce concerns over resource scarcity, as would development of shale gas resources in Europe.
- Security of UK electricity supply is also a significant concern. In the period up to 2020 the main reasons are the planned closure of most nuclear capacity before new nuclear capacity will be ready to replace it and the run down and imminent closure of much of the UK’s coal and oil- fuelled generation due to the deadline for compliance with the EU Large Combustion Plants Directive in 2015, and beyond that the Industrial Emissions Directive. New power sources available to replace this capacity within the timescale are largely gas fired combined cycle gas turbines (CCGT) and on-shore and offshore wind. We can also expect to see large increases in local renewable generation and community energy schemes making use of waste heat from fossil fuel or renewable generation, and the situation has been assisted to a degree by demand reduction arising from the economic slowdown.
- Beyond 2020, Government policy envisages the increasing deployment of electric vehicles and electric heating by heat pumps. This increase in electricity demand is likely to outstrip savings achieved through greater end-use efficiency for electricity, potentially leading to high levels of demand growth.
- As the level of variable renewable energy based electricity generation increases, primarily through additional on- and off-shore wind, there will be new challenges for the secure operation of the electricity system. The IET is working with the industry to explore and anticipate these challenges.
Gas generation strategy (IET submission)
Evidence to GEMA on Ofgem's Project Discovery
Electricity networks for the 21st century
- Transmission and distribution infrastructure needs to undergo a step change on a scale unseen for over 40 years to make it an adequate enabler of a secure low carbon affordable energy future. This will require investment, policy attention and engineering skills on an unprecedented scale.
- The electricity grid is part of the national critical infrastructure and strategic decisions need to be made to minimise the risk of sub-optimisation and improve the capability for adaptation to changes and new priorities as they emerge.
- Without the right networks, few of the UK’s energy ambitions can be realised, and if network development is inadequate or delayed excessively there is a very real danger of new generation being delayed or not being connected and hence of the lights going out.
- Action is needed now. Development and implementation times for major changes to networks are usually longer than those for major power plant construction. If the network is not there, new power plants cannot be used and would probably not get built. The principal bottleneck to network build is gaining planning consent for overhead lines. Undergrounding transmission can help deal with legitimate concerns over visual amenity but is more expensive. The IET has facilitated an independent costing study to enable objective decisions in this area.
- Chartered Engineers capable of leading the transformation of the electricity system are will be in great demand and the challenges ahead make this an excellent career choice. The IET contributes to the future supply of power engineers by establishment of the IET Power Academy and IET Power Research Academy.
Electricity transmission costing study
Integration of renewables into the grid
- The electricity network is the key enabler of low carbon secure and affordable energy, and needs to be upgraded if renewable energy, nuclear, clean coal and energy efficiency are to be a key part of our energy future. Renewables are variable in output and increasingly remote from population centres. This has implications for connection costs and network constraints as well as introducing a requirement for active management at distribution level.
- Wind, like most renewable sources of generation, is variable in output both on an hourly and weekly level. This requires other generation to be flexible to balance the load. But nuclear has very limited flexibility of output and the high efficiency gas and possibly new supercritical coal stations (which will be needed if Carbon Capture and Storage is to be introduced) would also be less flexible than the stations they replace. Interconnectors with the rest of Europe will no doubt be increased but can not be expected to provide supplies on demand. Thus at just the time that greater flexibility is needed because of massive deployment of wind, the system will be becoming less flexible.
- A substantial part of the answer to this lies in demand - the smart management of loads such as water heating, electric storage heating and electric vehicle charging. Thus the only viable way forward is to build multi-directional flows into the whole of the electricity grid together with sensors and communication in every node of the grid to manage these flows. This smart grid in turn needs to be enabled by smart metering - both from the perspective of power system management and real time load management.
- Storage is also likely to have a part to play, including both traditional pumped storage plant and potentially a range of new technologies currently in development, provided they can be deployed at reasonable cost.
IET briefing on electricity storage
Renewables and the Grid (IET submission to Parliamentary Renewable and Sustainable Energy Group)
- A Smart Grid is defined as an electricity network that can intelligently integrate the actions of all users connected to it - generators, consumers and those that do both - in order to efficiently deliver sustainable, economic and secure electricity supplies. See the IET briefing What is a Smart Grid?
- There is no single way of implementing ‘smart grids’ but common themes are emerging internationally. There is significant opportunity to make wide use of fast communications, advanced materials and power electronics devices. Ideas to use these techniques are being developed and include, for example, better use of existing assets by means of ‘dynamic line rating’, intelligent controls to intercept faults and minimise the number of customers affected, and new control systems that enable distributed generation to be connected without the ‘reverse power flows’ causing problems with system voltages.
- Today’s networks are technically not able to accept high penetrations of distributed generation because they are designed for one-way flows only. New technologies have huge potential but they need to be brought forward from the lab to real networks. Demonstration projects are key to progress.
- The IET welcomes Ofgem’s commitment to fund network innovation leading to smart grids and also the inclusion of a requirement for innovation more generally as a pillar of the new RIIO price control framework. The IET notes the growing clarity of the GB vision for smart grids and the leadership being provided by the Smart Grid Forum, jointly chaired by the Regulator and Government. The projects now being implemented in Britain compare well with developments elsewhere in the world, and in some regards are leading edge. We note however the considerable risks and barriers that can be identified in this area. Smart grids will be a necessary part of an energy system with significant amounts of wind power and are also essential should electric vehicles be adopted on a large scale. High priorities now are the continuing refinement of the vision, the encouragement for practical experience and learning, and a drive for commercial scale realisation.
Electricity networks - handling a shock to the system (position statement)
For more detailed information on smart grids please go to the Smart grid key topic
- The IET supports the deployment of smart meters as enablers of change in the UK energy sector. Smart meters are an important part of the IET’s vision for more flexible and efficient energy supply infrastructures, particularly for electricity. As such the deployment programme for smart meters must be designed and implemented as part of a wider plan for smart energy grids.
- It must be appreciated that the smart meter itself is the tip of the iceberg. It will need a major supporting infrastructure to allow data to be collected, aggregated, distributed and used, and to enable decisions made on this data to be implemented. Delivering such infrastructure will be a major business change project that will require significant investment, and attention to the detail of project definition and management.
- A further aspect requiring substantial attention is that of data security. The data will be used by multiple users: customers, energy suppliers, network operators and others, and both data security and integrity will be at risk unless appropriately robust and resilient systems are provided and a systems engineering approach is adopted.
- Smart metering hardware and software will continue to develop at a fast pace through innovations in Europe, the USA and elsewhere. It is essential therefore that systems developed for the UK are not only compatible with global developments and but also that they are flexible to future changes. Equipment installed towards the end of the planned roll out is likely to have substantially enhanced functionality compared to what it available today.
- Public engagement is key, with concerns over privacy having disrupted other smart metering programmes internationally.
- None of this complexity is an argument for delay. The climate change challenge is too urgent for that. Instead we need to move forward rapidly with pilot schemes and trials, and learn from these experiences whilst continuing to develop robust systems for major roll out. At the same time, a strong public engagement programme will be vital to involve users in getting the best from this substantial investment.
For more detailed information on smart grids please go to the Smart grid key topic
- The challenge of raising the percentage of UK electricity derived from renewable sources from less than 5% today to over 30% by 2020 is huge. It will require deployment and further development of proven renewable technologies on an unprecedented scale.
- Physical deployment of the required amount of infrastructure to meet the 2020 renewables targets whilst maintaining secure supplies is immensely challenging, especially given that much of the rest of the world will be attempting to deliver something broadly similar over the same time period.
- The costs of many renewable technologies such as solar have been falling rapidly. In the UK the probable dominant future renewable technology is offshore wind. This is currently high-cost, but the industry is currently implementing cost reduction plans to bring costs to a comparable level to other low carbon technologies on a £/MWh basis. However for this to work, large scale deployment will be needed.
- The UK Government’s proposed approach is relatively incremental and is likely to set the UK on the right road towards meeting targets, but moving too slowly to assist the global battle against predicted climate change. If the targets are to be taken seriously, much stronger leadership from government will be needed. It may also need some level of government intervention in underpinning developments to attract supplier interest.
UK Renewable Energy Strategy (IET submission to DECC)
Economics of Renewable Energy (IET submission to House of Lords Economic Affairs Committee)
- Nuclear fission is a proven and reliable low carbon base load power generation technology, and is potentially an important part of the UK’s future electricity supply mix. There are no technical or safety arguments not to construct new nuclear or to shut down existing plant prematurely. However a long term solution needs to be put in place urgently to manage legacy and potential future waste.
- New nuclear power plant will be procured to manufacturers' standard designs on the world market, unlike historically in the UK. Recent experience in Europe has not been encouraging regarding outturn costs and construction timescales for new UK nuclear plant, and this combined with the challenge of financing such large projects has been causing delays to decisions to proceed to construction.
- Skills and global supply chain issues will also be key factors determining whether a new fleet of nuclear power stations can be built to time and budget in the UK.
Nuclear Engineering Skills - A Case Study
- The transition to a low carbon economy is a massive long term challenge that can only be tackled using a diverse portfolio of technologies. Currently 90% of the UK energy mix is fossil fuels and they are likely to remain significant for some time.
- Delays in construction of new nuclear power stations and the need to manage variability from renewable generation means that new gas fired power stations are needed to ensure sufficient supply in coming decades.
- The next 10-15 years will be critical for the demonstration and deployment of large scale low-carbon technologies for power generation such as pre- and post-combustion carbon capture and storage.
Gas generation strategy (IET submission)
Towards Carbon Capture and Storage (IET submission)
The role of government and regulators
- The UK is a small part of a global market for skills, equipment and finance. All three of these are scarce and will move towards the best opportunities. The UK must be positioned effectively through realistic programmes and a supportive and stable regulatory environment.
- The IET welcomes the wider remit for OFGEM which now has to consider the interests of current and future customers.
- Due to the importance of energy security, the control of underlying resources is arguably moving away from the market towards national governments.
- All the engineering challenges for networks can be solved with existing or near to market technology. However, the large scale deployment of such technology will be a major technical, logistical and management challenge. It will also require close engagement with customers and the wider public. There is a need for more coordinated planning and more flexible regulation to allow coherent solutions to emerge, and Government will need to be more involved than it has been in the recent past. Much of the innovation needs to take place within the low voltage distribution system and the Distribution Network Operators need to have a significantly enhanced role in strategic planning.
Ofgem Draft Forward Work Programme
Electricity Market Reform (IET submission to House of Commons Energy and Climate Change Committee)
Electricity Market Reform (IET submission to DECC)
Carbon Price Floor (IET submission to HM Treasury)
Energy policy needs to be joined up
- Since creation of the Department for Energy and Climate Change, the importance of heat as well as power has been recognised but further thinking is required to include cooling in the policy framework.
- Energy aspects of Transport, particularly electric vehicles will be of increasing importance as the pace of adoption of electric vehicles accelerates. The increasing demand from electric vehicles is expected to more than offset reduction in demand from energy efficiency measures and they will not contribute to CO2 reduction until increased electricity demand can be met from excess low or zero carbon sources.
- Localities with a concentration of electric vehicle users will be the first to benefit from a smart grid approach and the need for differential time of day electricity prices to reflect availability should be fully integrated with the Vision for a UK Smart Grid and the plans for introducing smart metering.
- The transformation of the energy supply system will be the biggest peacetime programme of change ever seen in the UK and the timescales require urgent action. The IET therefore strongly welcomes the creation of the Infrastructure Planning Commission and the policy of deciding national infrastructure requirements at a national level, within careful guidelines (the Draft National Statements) to protect the interests of local communities.
National Policy Statements submission
Energy efficiency, the built environment and social issues
- Individuals are directly responsible for 50% of the UK’s energy use. Understanding and influencing public attitudes will be essential for large scale changes to take place in the energy sector.
- Energy prices will inevitably rise over the coming decades. This is due both to pressures on oil and gas supplies and to the exceptional level of investment required to meet CO2 reduction targets whilst also maintaining security of supply. This problem needs to be acknowledged and addressed but not allowed to put a break on the effort needed to transform the UK to a low carbon economy.
- Energy costs will increase as a proportion of household spending which will encourage people to value energy more and to be more conscious of the way they use it. It will make pay back times on energy efficiency measures more attractive and bring greater returns to those, particularly communities, who invest in local generation technologies.
- However, higher prices will have a disproportionate effect on households with lower disposable income. Policy makers need to address this urgently by understanding and addressing the multiple causes of fuel poverty.
Promoting smarter energy markets (IET submission to Ofgem)
Fuel Poverty (IET submission to ECC Select Committee)