2014 UK Future Energy Scenarios

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Each year, we provide detailed analysis of a range of credible and plausible energy scenarios out to 2035 and 2050 that cover a range of issues, including where our energy will come from in future, projected changes in demand and whether the UK will meet its stated environmental emissions targets.
The scenarios are based on information and insight from right across the industry, rather than simply the voice of National Grid, because they are developed using a rigorous and robust process that encompasses an enormous amount of stakeholder engagement throughout the year.

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2014 UK Future Energy Scenarios

  1. 1. Twitter: #ukenergy email: transmission.ukfes@nationalgrid.com UK Future Energy Scenarios 2014 Richard Smith: Head of Energy Strategy & Policy
  2. 2. Twitter: #ukenergy email: transmission.ukfes@nationalgrid.com Our journey so far Cordi O’Hara: Director, Market Operation
  3. 3. We all want to understand what the future journey might look like Shareoftotalenduseenergy Carbon intensity ~50% ~0% ~800gCO2e/kWh ~0gCO2e/kWh Electricity Gas Oil 1990 2010 2020 2030 2050 A ‘Low Carbon Life’ pathway to 2050: 1990 2010 2020 2030 2050 2050 1990 2010 2020 2030
  4. 4. Our vision of the future affects & informs how important decisions are made… Development of transmission systems European developments Supply & demand for the year ahead Security of supply & decarbonisation
  5. 5. Twitter: #ukenergy email: transmission.ukfes@nationalgrid.com Scoping the future energy landscape Richard Smith: Head of Energy Strategy & Policy
  6. 6. We follow an annual cycle of scenario development Once our axioms have been defined, they underpin our detailed modelling and drive our specific electricity and gas, demand and supply scenarios. Modelling Our stakeholder engagement allows us to listen to your views, which are vital to our outputs. They drive our processes and inform both our scenarios and our consultation process. Your Views The scenarios are the end result and a vision of the future that stakeholders have informed. The publication of the Future Energy Scenarios document marks the start of our annual process and the continuation of our stakeholder consultation. Future Energy Scenarios An axiom is a premise or starting point of reasoning. The axioms that we produce are a reflection pf the stakeholder feedback that we receive through our consultation process. These axioms influence our modelling. Axioms
  7. 7. Everyone is a stakeholder in the future & we want the widest range of input…
  8. 8. …which we use to develop plausible & credible evidence based scenarios every year… Generic 5 stage gate process: Stakeholder feedback Stakeholder feedback Input data / market intelligence / stakeholder feedback Benchmark data / market intelligence / stakeholder feedback 1  Head of Energy Strategy & Policy led  Framework based on feedback evidence  Challenge & review with NGET & NGG SO leadership & relevant teams  Sign-off at SO Exec. 2  Responsible manager led (eg. Power Demand Manager)  Cogency & consistency check across work streams  Peer challenge & review with NGET & NGG SO internal experts  Sign-off at Energy Strategy & Policy managers meeting 3  Responsible manager led (eg. Power Demand Manager)  Peer challenge & review with NGET & NGG SO internal experts  Internal model QA  Sign-off at Energy Strategy & Policy managers meeting 4  Responsible manager led (eg. Power Demand Manager)  Peer challenge & review with NGET & NGG SO internal experts  Internal model QA  Sign-off at Energy Strategy & Policy managers meeting 5  Responsible manager led (eg. Power Demand Manager)  Energy Strategy & Policy leadership review  Process assurance  Sign-off at Energy Strategy & Policy managers meeting Define scenario framework & agree axioms Define analysis methods & assumptions Draft analysis Revise analysis Produce outputs
  9. 9. …breaking down our view of the future & applying fit for purpose modelling techniques Power demand modelling example: Scaling factors based on historic trends for each sector adjusted on previous winter’s outturn, demand side response Scaling factors based on historic trends and socio-economic / geospatial factors by technology class RESIDENTIAL DEMAND Lighting, appliances, heating (heat pumps), transport (EVs), housing growth, energy efficiency, behaviour, ‘SMART’ Deterministic rule based & specific regression models INDUSTRIAL & COMMERCIAL DEMAND GDP, manufacturing output, non- manufacturing output, energy efficiency, energy prices Econometric regression model EXPORTS Market intelligence & stakeholder data/evidence Deterministic rule based model Geographic demand (post-code analysis) Peak, minimum and reactive power demand Annual power demand
  10. 10. Your feedback has fundamentally shaped our 2014 scenarios “National Grid needs to tell an engaging story” “introduce more Future Energy Scenarios” “explore scenarios based around the energy trilemma” MatthewSpencer GreenAlliance GuyNewey PolicyExchange Jenny Saunders National Energy Action Sunita Bali Experian Sustainability Less emphasis Sustainability More emphasis Affordability Lessmoney Affordability Moremoney
  11. 11. Twitter: #ukenergy email: transmission.ukfes@nationalgrid.com Our 2014 Future Energy Scenarios Alice Etheridge: Strategy Development Manager
  12. 12. Our 2014 Future Energy Scenarios Low Carbon Life Gone Green No Progression Slow Progression Sustainability Less emphasis Sustainability More emphasis Affordability Lessmoney Affordability Moremoney
  13. 13. No Progression Economic: Slow UK economic recovery Political: Inconsistent political statements within Government, resulting in investor uncertainty Technological: Gas is the preferred choice for generation over renewables. Little technological innovation occurs in the energy sector Social: Consumers not engaged with energy efficiency. Low uptake of electric vehicles and heat pumps Environmental: Targets are missed, no new environmental targets introduced
  14. 14. Slow Progression Economic: Slow UK economic recovery Political: Political will for sustainability but financial constraints prevent delivery of policies Technological: Renewable generation chosen over low carbon generation. Low levels of innovation in the energy sector Social: Engaged consumers focus on drive for energy efficiency but with low uptake of electric vehicles and heat pumps due to affordability Environmental: Environment targets missed but hit later. New European targets introduced
  15. 15. Low Carbon Life Economic: Growing UK economy Political: Short term political volatility but long-term consensus around decarbonisation Technological: Renewable generation at a local level. High innovation in the energy sector Social: High uptake of electric vehicles but consumers not focussed on energy efficiency. ‘Going Green’ is a by-product of purchasing desirable items Environmental: Carbon target hit. No new environmental targets introduced
  16. 16. Gone Green Economic: Growing UK economy Political: Domestic and European policy harmonisation, with long-term certainty provided Technological: High levels of renewable generation with high innovation in the energy sector Social: Engaged consumers focussed on drive for energy efficiency. This results in high uptake of electric vehicles and heat pumps Environmental: All targets hit, including new European targets post-2020

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