The Carbon Trust has released findings from a comprehensive new study that says a flexible energy system could cut the cost of reaching net zero by up to £16.7 billion a year in 2050.
The Flexibility in Great Britain report is the first time that the system-level value of deploying flexibility across heat, transport, industry and power sectors in Great Britain, and the sensitivity of this value to different scenarios, has been assessed.
This assessment is hugely important, as the goal of reaching net zero by 2050 is enshrined in law, meaning the UK Government needs to know exactly how to achieve it. While many have mentioned how behavioural changes are needed from a consumer-level, this report highlights the mammoth task that is facing the energy sector.
It’s currently estimated that demand for electricity is set to treble in 2050 from levels last seen in 2019. That demand means that we’re going to need an unprecedented expansion of the UK’s energy system to meet our net zero target, as well as creating an energy system that is more flexible.
We’ve noted countless times at Electrical Review how renewables are likely to form the backbone of the UK’s future energy mix, but also how those renewables need to be managed properly due to their intermittent nature. That means the network will have to work more flexibly so in periods where the wind doesn’t blow or the sun doesn’t shine, the UK doesn’t find itself in a blackout.
This drive for net zero will undoubtedly come with a sizeable cost, which is exactly why the Carbon Trust took the time to explore how flexibility won’t just help with energy security, but also reduce the cost of net zero.
What can be done to reach net zero by 2050 affordably
The report found that there is a need to embed flexibility across all energy sectors – power, heat and transport – to cut the cost of decarbonisation. Embedding flexibility in low carbon heat and transport solutions now will help to reduce their system impact and costs, making the decarbonisation of these sectors more economically feasible.
Investing in flexibility is a no-regrets decision as it has the potential to deliver material net savings of up to £16.7 billion per annum across all scenarios analysed in 2050.
Flexibility will also enable the development of a safe and secure net zero energy system that can operate cost-effectively in diverse situations such as, cold, still winter periods (when variable wind and solar generation can’t run) and summer solar excesses, while reducing Great Britain’s reliance on back-up gas-fired generation.
The analysis confirms the benefit of taking a whole-systems approach to energy. The value of flexibility to the energy system as a whole is many times its value to the electricity sector alone, because it allows for interactions at all levels in an integrated system, between vectors, and at the different timescales – from seconds to seasons, that are required to maintain a secure system. To achieve this, however, digitalisation is needed across the energy system to allow information sharing, monitoring and coordination between assets and organisations.
This report showcases the significant benefits of households and businesses playing an active role in the development and operation of the country’s future energy system as transport, heat and energy use become more integrated. Positive public engagement with flexibility will be crucial for the successful implementation of a flexible energy system.
The importance of local action was reinforced by the analysis, which found that distributed flexibility assets deliver significant value locally. Although, even more value is realised when coordinated at a national level – a critical finding at a time when there is increased interest in local energy system planning.
The analysis also considered the use of hydrogen across the energy system. It found that the development of hydrogen uses and associated infrastructure (electrolysers, natural gas reformers, biomass gasifiers, CCS infrastructure, hydrogen turbines and storage) for 2050 has significant system benefits if coordinated effectively.
Driving this value is the ability of the system to optimise production from electrolysers to coincide with high energy supply times, store hydrogen and then use it for heating, power production and other applications across transport and industry. However, there is a need to diversify hydrogen production routes (from electricity and water, gas and biomass) and develop CCS infrastructure at scale to deliver a hydrogen future cost effectively.
Significant challenges remain
The report also identifies the key challenges that could delay, or prevent, the development of a smart flexible net zero system.
The report authors call for flexibility to be treated as a core infrastructure challenge and to be integrated into low carbon generation, network planning and heat and transport decarbonisation strategies. Policymakers should try to preserve existing flexibility options (e.g. hot water tanks) and act now to maximise future flexibility, such as by building it into ‘smart’ appliances or building standards.
Consumer engagement and confidence building is also critical to scaling up the deployment of flexibility technologies. For flexibility to be rolled out successfully, it is crucial to develop business models which capture its value and to overcome consumer acceptance challenges when delivering new mobility, heating and smart appliance solutions. An evolving regulatory environment, combined with potentially low financial gains in the long term, will create challenges for developing these new business models. But by improving cost-effective data access, some of the cost burden can be alleviated.
What does this mean for the UK’s energy sector?
The Carbon Trust says that the net zero challenge will require a much larger electricity sector, given the increasing electrification of transport demand and heating, and the gas network will also undergo fundamental changes – potentially transitioning large portions to hydrogen, and/or acting as a back-up source of energy during extreme weather events. The operation of both networks will become increasingly interlinked to deliver a secure energy system and meet carbon targets.
Tom Delay, Chief Executive, the Carbon Trust, commented, “Flexibility is vital to unlock value and it is the most important ‘no regrets’ action that can be taken as the UK moves to decarbonise heat, transport and industry, saving billions in investment and operating costs.
“It’s critically important that industry, business, consumers and the public sector understand the value of flexibility and the benefits that flexibility brings to the British economy. Flexibility always delivers – we should invest in it now.”
Baroness Brown of Cambridge, Chair of the Carbon Trust, added, “This in-depth analysis examines the different uncertainties the net zero transition throws up and offers a comprehensive evidence base on the role and value of energy system flexibility under different energy system futures.
“The report demonstrates that energy flexibility can reduce the cost of meeting net zero and mitigate the impact of wider changes in the energy system, ensuring we reach net zero efficiently, effectively and at lowest cost.”