National Grid Launch Future Energy Scenarios 2018

What is it?

The Future Energy Scenarios (FES) is an annual publication from National Grid (NG) which outlines several pathways for the future of energy. These cover the next 30 years and looks at how much energy might be needed and which sources these would come from.

This process is developed through extensive work with over 400 stakeholders and as Fintan Slye – a Director at NG - states they are designed to “stimulate debate and inform the decisions that will shape our energy future”.

This year, NG have continued with four scenarios, however there have been some changes to both naming and categorisation

 

Overview of 4 Scenarios

FES 2017 focussed on Green Ambition and Prosperity in order to differentiate between scenarios. In 2018’s publication the two categories are:

  • Speed of decarbonisation

This is driven by policy, economics and consumer attitudes. This includes the level of uptake of Electric Vehicles (EV’s) and the supply fuel mix. Two of the four scenarios meet the UK’s commitment to reducing greenhouse gas emissions by at least 80% by 2050 (Community Renewables and Two Degrees)

  • Level of decentralisation

Essentially this looks at the level of supply on local distribution networks. Over the past decade government policy has led to dramatic growth in small-scale wind and solar generation assets. Given the intermittency of these supply sources, the level of forward decentralisation is expected to be a key challenge to ensure a balanced network going forwards.
 

Consumer Evolution (low decarbonisation, high decentralisation)

  • Medium/High EV uptake, most cars EVs by 2040
  • Most heat from Gas boilers
  • High levels of shale gas from 2020s
  • Smaller scale renewable generation alongside small and large scale nuclear power stations.

Steady Progression (low decarbonisation, low decentralisation)

  • Medium/High EV uptake, most cars EVs by 2040
  • Decarbonisation of heating is slow
  • Large scale generation (Nuclear and off shore wind)
  • UK continental shelf still producing in 2050

Two Degrees (high decarbonisation, low decentralisation)

  • High EV uptake, most cars EVs by 2033
  • Nuclear supply has a role, high levels of storage and interconnection with Europe
  • Hydrogen for heating reduces electricity demand

Community Renewable (high decarbonisation, high decentralisation)

  • High EV uptake, most cars EVs by 2033
  • Heat pumps widespread with high thermal efficiency
  • High levels of solar, onshore wind and green gas development

Commonalities and Key Messages across all scenarios

New world of energy

The electricity system will have to adapt to changing plant mix. Intermittency will create challenges to security of supply which will need to be addressed.

All scenarios see high levels of generation growth but this is greater in the two 2050 compliant scenario. This includes strong growth in offshore wind and Solar capacity despite reducing subsidy support. Even Steady Progression has double today’s capacity by 2050. 

Some key points:

  • The gas from UK continental shelf declines in all except Steady Progression.
  • Shale gas is highly uncertain and three out of four scenarios expect imported gas to be even more important, with dependency increasing between 60 and 90% per cent by 2050
  • Electricity storage capacities increase in all scenarios driven by price falls for battery technologies.
  • Electricity interconnector capacity increases in all scenarios.

Transport

In all scenarios carbon emissions from transport reduces based on the uptake of EV based on their respective cost reduction increasing affordability. Engagement of consumers in the energy market, through time of use tariffs for example, will be key to reducing the impact of peak load on the electricity network
 

Heat

Many ways to decarbonise heating which differs dramatically across the scenarios. A key theme is reduced levels of gas boilers and the electrification of heat.
 

The role of gas

Gas will continue to play a role but it will be very different to today. Gas continues to provide more energy than electricity in three of the four scenarios but patterns of demand will change. There is likely to be more pronounced winter peaks and more usage will be used to provide system flexibility.
 

Discussion Points

What prices do these scenarios lead to?

This has not been modelled but will be worked into future reporting. Without large scale government intervention, the likelihood of the scenarios is highly dependent on their respective costs.

What impact with Brexit have on these scenarios?

It was felt that in reality this will have a minimal impact. It was felt that an interconnected European Market brings benefits to both the UK and Europe and therefore logically this shouldn’t change. Outside of Europe, the UK is expected to continue its dedication to decarbonisation.

Which scenario is most likely?

As Finton Slye says at the start of the report, it is impossible to predict a single energy future. Should we try and pick our own blend of the four?

What are potential opportunities in the emerging trends and technologies?

 

The full document as well as a summary and FAQ’s can be found at the below link:

http://fes.nationalgrid.com/fes-document/