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It mostly covers my work as UNISON Scotland's Head of Policy and Public Affairs although views are my own. For full coverage of UNISON Scotland's policy and campaigns please visit our web site. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Wednesday, 15 July 2015

Future Energy Scenarios

Planning the UK's energy future is a difficult task and getting more challenging. A secure, sustainable and affordable energy supply should be a priority for any government.

National Grid has today published their Future Energy Scenarios 2015 and I was at the launch event. They have developed four scenarios that reflect different political, economic, social, technological and environmental factors:

  • Gone Green is a world where green ambition is not restrained by financial limitations. New technologies are introduced and embraced by society, enabling all carbon and renewable targets to be met on time.
  • Slow Progression is a world where slower economic growth restricts market conditions. Money that is available is spent focusing on low cost long-term solutions to achieve decarbonisation, albeit it later than the target dates.
  • No Progression is a world focused on achieving security of supply at the lowest possible cost. With low economic growth, traditional sources of gas and electricity dominate and there is limited innovation changing how we use energy.
  • Consumer Power is a world of relative wealth, fast paced research and development and spending. Innovation is focused on meeting the needs of consumers, who focus on improving their quality of life.

Probably the most important theme to come out of these scenarios is that Gone Green is the only scenario to achieve all renewable and carbon targets on time. It is also probably the most challenging scenario. Under this scenario, LED lights will be the only viable light bulb option by 2030, renewable power output will be comparable to that of conventional power plants by 2026, and sales of air source heat pumps will top 300k by 2030. Maybe, but you might be a touch sceptical.

In all the scenarios National Grid believe that there will be sufficient gas supplies, although the sources remain uncertain. This big issue is of course shale gas. If large scale planning permissions are not forthcoming, it will be replaced by imported gas.

Electricity margins will continue to be very tight over the next few years until new capacity kicks in from 2018/19. National Grid believe they have that covered with their additional balancing reserve. That will be provided by Peterhead in Scotland. Interconnectors are of growing importance and Great Britain remains a net importer of electricity in three of their four scenarios.

Finally, the grid faces significant operational challenges coping with intermittent wind and solar power rather than conventional power stations.

The presentations were helpful in explaining the scenarios, but the panel discussion was a bit bland. It needed some more challenging panel members and questions.

While there is a cross party consensus on targets, the debate is how to reach them. The recent announcement of onshore wind subsidy creates the very uncertainty that investors hate. Scenarios are all well and good, but someone has to deliver the capacity.

While government still talks about all the objectives, it seems clear that they are prioritising affordability over decarbonisation. There may also be too much focus on supply side, when we should put more effort into reducing demand.

The operational challenges of distributed generation are unlikely to be resolved until we get viable electricity storage options. This is effectively turning the usual supply and demand model on its head and could lead to attempts to persuade energy users to use energy when it's available. Anyone for windy or sunny day tariffs?

I allow myself a wry smile at events like this when civil servants are quizzed about what is in effect state planning of energy, introduced by a Tory government. This was supposed to be a temporary process, but no one is predicting it's imminent demise. In fact governments across the world are getting more involved in energy planning. It's simply to important to leave to the market.

What about Scotland in all this scenario planning. I'm afraid it barely gets a mention in the 200+ page book and the assumption is that imports from England and further afield will plug the gaps in our generating capacity. And gaps there will be when the wind isn't blowing.

If you want to understand the risks and challenges of our rapidly changing energy system, this is the book for you. But like me, you may conclude that it would be simpler and cheaper to return it all to public ownership.

 

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