The Power Debate:
A UK Generation Game

Welcome
19 November 2013
The UK Power Mix
Andrew Poyner
Watson Burton
Agenda
• Generation through to sales
• The current generation split

• Sustainability and emissions
• Generation methods: ...
Power Generation: Overview of the market
• Generation
• Transmission and Distribution

• Supply and Sales
• Regulation
Power Generation: The current split
• Fossil Fuels - mainly coal (38%) and natural gas (28%)
• Nuclear – 18%

• Renewables...
Power Generation: Sustainability
• £17billion investment (2007-2010)
• 45,000 new jobs
• Carbon emissions
• Zero carbon te...
1. Is there any point in
reducing UK emissions
when the likes of Brazil,
Russia, India and China
are not reducing in the
s...
Coal: The headlines
• Supply
• Price

• Environmental
• Resources
• Employment
2. Coal continues to be
one of the most
significant players in the
UK energy mix, is the
Government being short
sighted to...
Oil and gas: The headlines
• Supply: North and Irish Sea, pipelines, LNG shipping
• Price

• Resources
• Storage
• Employm...
3. Given dwindling
supplies of North Sea
oil and gas, should
we focus on this as
part of a long term
energy solution for
t...
Nuclear: The headlines
• Supply
• Price

• Resources
• Employment
• Safety / Risk
4. Is the Government
right in proposing that
nuclear should play a
larger role in our energy
mix in the future?
Wind Power: The headlines
• Supply
• Price
• Resources
• Employment

• Safety / Risk
5. Given the continuing
public resistance to
onshore wind farms, is
there a real future for
wind power in the UK?
Solar: The headlines
• Supply
• Price

• Resources
• Employment
• Safety / Risk
6. Is solar as reliable
as a British summer?
Thank you
for your participation
The panel perspective
Martin Needham, CNG
Barnaby Pilgrim, Banks Group
Andrew Mill, NAREC
Colin Henry, Siemens
James Poyne...
The panel perspective
Andrew Mills, Narec
Andrew Mill
Chief Executive
UK Current Electricity Market
• 3 Drivers for Government
– Cost to consumer
– Environmental
– Energy security

• Offgem wa...
Installed Capacity By Generation Technology
• Consumption 376TWh
• Source:
• 361 TWh
generation
• 3 TWh pumped
storage
• 1...
Changes In Installed Capacity
•

Over next 6 years
– Reduction of 14GW mainly
base load
– Increase of 17GW mainly
renewabl...
Cost of New Low Carbon Generation
•
•
•
•
•

•
•

New nuclear £92.5/MWh
Hinckley FID 2014
Wave & tidal £350/MWh
Renewables...
World Factors
•
•
•
•
•
•
•
•

China key driver of global oil demand
By 2025 China will be 2X USA oil consumption
Vehicles...
Future UK Power Industry Factors
• Government Electricity Market Reform
• Prediction that UK demand will require capacity ...
The panel perspective
Colin Henry, Siemens
The Power Debate:
Transition to a low carbon energy mix –
balancing the system
19th Nov 2013
Colin Henry - Infrastructure ...
For internal use only © Siemens AG 2010. All rights reserved.

The big “themes”

•

Global race: Climate change or creatio...
For internal use only © Siemens AG 2010. All rights reserved.

The new world of Smart Grid: Decentralized and
intelligent ...
For internal use only © Siemens AG 2010. All rights reserved.

Smart Energy Systems
Stakeholder Contributions to Flexibili...
For internal use only © Siemens AG 2010. All rights reserved.

Evolution of the UK (Smart) Market – aligned with Govt/Ener...
For internal use only © Siemens AG 2010. All rights reserved.

“Future” Localised Smart Energy Systems
Microgrids, ESCo’s,...
For internal use only © Siemens AG 2010. All rights reserved.

Food for thought.......other market entrants??
Some key fig...
The panel perspective
James T. Poyner, Miller Argent
Coal Consumption in the UK
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2...
The Energy Trilemma

Sustainability

Security

Affordability
38
Could It Be True?

39
Refreshment break
See you at 10.45am
The Debate
Martin Needham, CNG
Barnaby Pilgrim, Banks Group
Andrew Mill, NAREC
Colin Henry, Siemens
James Poyner, Miller A...
Closing remarks
If you would like to contribute your views to our report
on the sector, please contact me:
richard.palmer@...
Thank you
Please leave your feedback forms on the table
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Powerpoint slides by Watson Burton, The Power Debate:
A UK Generation Game

19 November 2013

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  1. 1. The Power Debate: A UK Generation Game Welcome 19 November 2013
  2. 2. The UK Power Mix Andrew Poyner Watson Burton
  3. 3. Agenda • Generation through to sales • The current generation split • Sustainability and emissions • Generation methods: the headlines • Questions and Voting
  4. 4. Power Generation: Overview of the market • Generation • Transmission and Distribution • Supply and Sales • Regulation
  5. 5. Power Generation: The current split • Fossil Fuels - mainly coal (38%) and natural gas (28%) • Nuclear – 18% • Renewables – 13% • Imports – 3%
  6. 6. Power Generation: Sustainability • £17billion investment (2007-2010) • 45,000 new jobs • Carbon emissions • Zero carbon technologies (40% generated by 2020)
  7. 7. 1. Is there any point in reducing UK emissions when the likes of Brazil, Russia, India and China are not reducing in the same way?
  8. 8. Coal: The headlines • Supply • Price • Environmental • Resources • Employment
  9. 9. 2. Coal continues to be one of the most significant players in the UK energy mix, is the Government being short sighted to turn its back on coal?
  10. 10. Oil and gas: The headlines • Supply: North and Irish Sea, pipelines, LNG shipping • Price • Resources • Storage • Employment
  11. 11. 3. Given dwindling supplies of North Sea oil and gas, should we focus on this as part of a long term energy solution for the UK?
  12. 12. Nuclear: The headlines • Supply • Price • Resources • Employment • Safety / Risk
  13. 13. 4. Is the Government right in proposing that nuclear should play a larger role in our energy mix in the future?
  14. 14. Wind Power: The headlines • Supply • Price • Resources • Employment • Safety / Risk
  15. 15. 5. Given the continuing public resistance to onshore wind farms, is there a real future for wind power in the UK?
  16. 16. Solar: The headlines • Supply • Price • Resources • Employment • Safety / Risk
  17. 17. 6. Is solar as reliable as a British summer?
  18. 18. Thank you for your participation
  19. 19. The panel perspective Martin Needham, CNG Barnaby Pilgrim, Banks Group Andrew Mill, NAREC Colin Henry, Siemens James Poyner, Miller Argent
  20. 20. The panel perspective Andrew Mills, Narec
  21. 21. Andrew Mill Chief Executive
  22. 22. UK Current Electricity Market • 3 Drivers for Government – Cost to consumer – Environmental – Energy security • Offgem warning reserve could fall to 2% in 2015 • HMG proposing gas subsidy for gas plants to use as back up – EU may block • Lights unlikely to go out because: – Mothballed gas can be brought into production – Reduced demand and government intervention – Growth in renewables
  23. 23. Installed Capacity By Generation Technology • Consumption 376TWh • Source: • 361 TWh generation • 3 TWh pumped storage • 14 TWh import • -2 TWh export • Capacity = 80GW • Peak Demand = 60GW • Wind 9GW growing to 20GW but assume 17% for firm capacity 100 Wind Offshore Wind Wind Onshore Tidal Biomass Hydro Pumped storage Nuclear Oil GT CCGT Coal Reference Scenario 2012 80 60 40 20 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
  24. 24. Changes In Installed Capacity • Over next 6 years – Reduction of 14GW mainly base load – Increase of 17GW mainly renewables – +11GW of wind equiv. to 2GW firm – +3GW biomass – +3GW CCGT • Station closures – 9 Coal plants 12GW by 2015 – 3 Oil plants 3.5GW by 2015 – 8 Nuclear plants 14GW by 2025 – 4 Gas plants 4.1GW mothballed 6 Additions Wind Offshore Additions Wind Onshore Additions Biomass Additions CCGT Closures Biomass Closures Nuclear Closures Oil Closures GT Closures CCGT Closures Coal 4 2 0 -2 -4 -6 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19
  25. 25. Cost of New Low Carbon Generation • • • • • • • New nuclear £92.5/MWh Hinckley FID 2014 Wave & tidal £350/MWh Renewables still in early stage of technology development Impact on grid cost and operational Current grid pricing structure Sources of funding
  26. 26. World Factors • • • • • • • • China key driver of global oil demand By 2025 China will be 2X USA oil consumption Vehicles 2009 China 13.6M – USA 10M China investing in Future Energy Supplies China currently consumes 45% of world coal China only one of a number of growth areas Kyoto China & India no imposed limits No. countries have opted out USA, Canada, Russia & Japan
  27. 27. Future UK Power Industry Factors • Government Electricity Market Reform • Prediction that UK demand will require capacity of 112GW by 2030 • Capital required £260bn this decade for new capacity and grid • Renewable energy technologies still early stage • Smart grids – 200,000 X 40kW cars = 8GW storage – Timing of appliances – Micro-renewables • New technologies required CCS & shale gas
  28. 28. The panel perspective Colin Henry, Siemens
  29. 29. The Power Debate: Transition to a low carbon energy mix – balancing the system 19th Nov 2013 Colin Henry - Infrastructure and Cities Sector, Smart Grid Restricted © Siemens AG 20XX All rights reserved. Answers for infrastructure and cities.
  30. 30. For internal use only © Siemens AG 2010. All rights reserved. The big “themes” • Global race: Climate change or creation of new high skilled jobs? • The Energy Trilemma: Security, Sustainability, Affordability • Backing winners: EMR, a level playing field? Some considerations: • Cities today consume 75% of all the world’s energy and emit around 80% of all greenhouse gases. The fight against climate change will be won or lost in cities! • The UK will need a diverse mix of energy sources and systems by 2050, to ensure that supplies remain affordable, resilient and flexible. Local energy systems will play an important part, and technologies are required for generating, harvesting, distributing, storing, and using energy at this scale. (Technology Strategy Board – Localised Energy Systems) https://www.innovateuk.org/competition-display-page/-/asset_publisher/RqEt2AKmEBhi/content/localised-energy-systems-across-sector-approach
  31. 31. For internal use only © Siemens AG 2010. All rights reserved. The new world of Smart Grid: Decentralized and intelligent generation and consumption of Electricity! Tomorrow power information UK Driver: Carbon Reduction, Changing the Generation Mix Energy Security & Efficiency with increased consumer participation. Data  Energy Services
  32. 32. For internal use only © Siemens AG 2010. All rights reserved. Smart Energy Systems Stakeholder Contributions to Flexibility Plant Control Large generation Transmission owners Market Large generation System Operator (B.M.) Flexible networks Imbalance Energy Market exchanges to settlement encourage flexibility Distribution network operators Flexible generation Small generation Flexible Energy demand consumers Tariffs to Energy encourage suppliers Aggregators flexibility
  33. 33. For internal use only © Siemens AG 2010. All rights reserved. Evolution of the UK (Smart) Market – aligned with Govt/Energy Policy TRL Business as Usual 9 1. Low Carbon Networks Fund (2011-2015) = £500m 2. Network Innovation (2013-2021) = £40m per annum 3. Electricity Market Reform (2013 onwards) 4. Technology Strategy Board (Future Cities, 2013 onwards) smart networks (DNO) 8 smart networks 1 (transmission) 2 smart 7 market 3 6 4 5 4 2010 smart cities / local energy systems Investment / Innovation focus 2011 2012 2013 2014 Today TRL – Technology Readiness Level 2015 2016 2017 2018
  34. 34. For internal use only © Siemens AG 2010. All rights reserved. “Future” Localised Smart Energy Systems Microgrids, ESCo’s, MUSCo’s Plant Control Market Large generation Transmission system Balancing Mechanism Imbalance settlement Energy exchanges Regional distribution systems City/Municipal distribution systems Energy retailers Energy producers electricity gas heat Net energy consumers
  35. 35. For internal use only © Siemens AG 2010. All rights reserved. Food for thought.......other market entrants?? Some key figures for China:• • • • • • Population – over 1.3 billion (20% of world;1 in 5 Chinese) most populous country in world State Grid Corporation of China (SGCC), covers 88 per cent of China and serves over 1 billion customers 26.53% electricity generated in China from clean energy in 2010. Carbon intensity of China‘s economy to be reduced by 40-45% by 2020, [against baseline 2005] Smart Grid market size $22.3bn in 2011 rising to $61.4bn in 2015, largest element T&D Eqpt (at 35%) SGCC released in June 2010, industry rules, standards and favoured technologies for domestic and international manufacturers of smart grid equipment And .......Chinese domestic firms serving the smart grid market will expand their footprint beyond their nation‘s borders as their technologies and their services will become increasingly competitive with their foreign counterparts Source: China: Rise of the Smart Grid, January 2011, www.Zpryme.com, Research and Consulting
  36. 36. The panel perspective James T. Poyner, Miller Argent
  37. 37. Coal Consumption in the UK 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Deep mined Surface mining Imports 37
  38. 38. The Energy Trilemma Sustainability Security Affordability 38
  39. 39. Could It Be True? 39
  40. 40. Refreshment break See you at 10.45am
  41. 41. The Debate Martin Needham, CNG Barnaby Pilgrim, Banks Group Andrew Mill, NAREC Colin Henry, Siemens James Poyner, Miller Argent
  42. 42. Closing remarks If you would like to contribute your views to our report on the sector, please contact me: richard.palmer@watsonburton.com
  43. 43. Thank you Please leave your feedback forms on the table

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