The electricity and gas networks will play a key role in helping to deliver climate change. But what are some of the challenges they’re facing and how can the networks meet these ambitious targets? Editor Alec Peachey spoke to a number of the network operators to find out about the work they’re doing in this area. Below are some of the questions asked, and the answers we heard.  

Participants:

Paul Jewell (PJ), distribution system operator development manager, Western Power Distribution

 

Jim Cardwell (JC), head of policy development, Northern Powergrid

 

Graham Campbell (GC), head of distribution system operations, SP Energy Networks

 

Ian Bailie (IB), network development manager, NIE Networks

 

Ian Glover (IG), sustainability manager, Cadent

 

 

Adriana Laguna (AL), senior innovation strategy manager, UK Power Networks

 

Helen Boyle (HB), strategic decarbonisation manager at Electricity North West

 

 

Andrew Roper (AR), distribution system operations director, SSEN

 

 

What have you done to reduce carbon emissions up to now?

PJ: We have sought to reduce carbon emissions by making our network more efficient through steps taken to reduce system losses. In ED1 we have changed our design philosophies and discontinued our smaller sizes of cables and transformers to reduce overall losses. Our actions in this area have saved over 870 GWh of energy being generated to support losses in 2018/19 alone.

JC: As a local powergrid we have two key roles. First, our most significant contribution is to facilitate the region we serve to reduce its emissions by connecting more renewables. But we also need to ‘walk the talk’ and make a contribution in our own business operations. For us, climate change also means that we need to adapt our operations to cope with the changing conditions.

GC: We have a track record of transitioning the energy mix by connecting low carbon renewables across our networks. We have facilitated around 30 per cent of the renewable generation for the UK to connect to our network, even though we have just 14 per cent of the customer base. That means today we have 6.3GW of clean energy connected and a further 8.3GW to connect soon.

IB: NIE Networks has led the way in connecting renewable generation to its network with over 1,650MW currently connected representing 38.6 per cent of electricity consumed* (*in the 12 months between March 18 and March 19). Northern Ireland has moved from a position of having three main centralised power stations to a current position of c.20,000 distributed generating sites. 93 per cent of this generation has been connected to the lower voltage distribution network by reinforcing the networks and through innovative cluster substation schemes.

IG: We have committed to medium and long-term targets to reduce our greenhouse gas emissions. We’ve achieved our 2020 target ahead of schedule, cutting emissions by 64 per cent compared with the 45 per cent target and we are on track to achieve our longer-term target of reducing emissions by 80 per cent (of 1990 levels) by 2050. The majority of our greenhouse gas emissions come from gas that is lost during the operation of the gas network. But as well as tackling this, we’ve also been looking at reducing the carbon footprint of our operations, including our fleet and our offices.

AL: The volume of carbon emitted in producing electricity in Britain has fallen 40 per cent in just six years. Electricity networks were at the heart of this massive, disruptive change.

HB: The UK is on a transformative journey to decarbonise and at Electricity North West we have bold ambitions. We recently launched our ‘Leading the North West to Zero Carbon’ plan which sets out the range of initiatives and investments totalling £63.5m, which we will make over the next four years to take a significant step on the road to achieving rapid decarbonisation and help businesses and customers do the same.

 

What are some of the challenges ahead as networks aim to achieve ambitious targets?

PJ: The increase in energy delivered across our network is large and we already aim to make more use of the existing network to support this demand. Our work to develop a flexible DSO approach to our network is key in achieving these objectives.

JC: In a world where more renewable generation is connected and as heating and transport become electrified, one of the biggest challenges is being able to anticipate those changes so that we can develop and operate our network to support this transition. A clear and stable policy environment will enable us to forecast what our customers will need from us and when we can invest in the right network locations at the right time.

GC: Our energy landscape is continually evolving, as we transition to a distribution system operator. As we introduce new ways of energy generation and consumption, we need to ensure the security and stability of our network remains, and if that’s not through network reinforcement, we need to find other ways. Being flexible with how and when energy is consumed and produced means we can make sure the power generated and delivered to us always matches the amount we use.

IG: None of us can achieve decarbonisation on our own. We will need to work together, forming partnerships with a raft of different organisations. These will vary from regional administrations, our supply chains, other gas and electricity networks and national and local policy-makers.

AL: Ultimately, our role is to keep our customers’ power flowing safely at the lowest possible cost, and improving network performance, all whilst decarbonising and decentralising the energy system – this is a bit like competing in a race whilst overhauling the engine – but still winning.

HB: As the network operator in the North West, we are ideally placed to lead decarbonisation across the region but there are a number of challenges. The regulator needs to create a positive, enabling policy environment for us to work within and be able to invest appropriately to underpin the low carbon transition. Our stakeholders are telling us that they need expert advice and a trusted partner to help them adopt low carbon technologies more quickly, which we can provide.

AR: Ensuring that the regulatory regime and political environment incentivises investment and innovation will be critical in delivering the UK’s ambitious climate change targets. SSEN continues to advocate constructively and robustly for a regulatory framework that strikes the right balance between ensuring efficiency and affordability with delivering the necessary investment to improve services for consumers and drive further progress towards a low carbon, flexible energy system. It is in the regulator’s gift to make this a reality in the next price control, and conversations are ongoing.

 

What do networks and their supply chain need to do to respond to the Committee on Climate Change’s recent recommendations to move beyond an 80 per cent target and deliver net zero emissions by 2050?

PJ: In many senses the work required to hit an 80 per cent or net zero target is very similar. The theme of decarbonisation will remain in place for both targets. We are already constructing networks which will still be in service in 2050 so are already planning for increased use of our assets.  The sharper focus may trigger a faster response in both the heating and transportation areas with, perhaps, heat pumps and electric vehicle deployment being accelerated.

JC: Both the existing 80 per cent target and the proposed net zero require us to take the same evolutionary path from a distribution network operator to a distribution system operator. The stronger target will likely require a faster pace of change in the 2020s with a ramping up of the switch to EVs, decisions and progress on heat decarbonisation, and more renewable generation coming on stream earlier than previously envisaged.

GC: We need to be able to invest now, to allow us to facilitate growth opportunities rather than allowing infrastructure bottlenecks to hold back and strangle growth and to ensure smart cities can seize economic opportunities in the decades to come. We need to challenge the central governance approach and look to decentralise this across GB, aligned with the aspiration of our cities and communities. We need to create decision-making authorities that can reflect local priorities.

IB: The current thinking is that the move to a net zero carbon economy by 2050 will require the electrification of heat and transport. This will place significant pressure on an electricity network infrastructure which was originally designed for a totally different load profile. Additional capacity can be achieved from existing network assets through a combination of applying innovative technologies and the facilitating of future flexible connections.

HB: We expect that demand for electricity will double by 2050, so it’s critical that network companies are planning for the future and supporting local economic development as the region transitions to a low carbon future. We are building strategic partnerships across the region to inform our planning and are investing £25m across the North West in strategic network projects to ensure capacity is available where and when it’s needed. 

 

How big a role can the impact of decarbonised transport have on climate change?

PJ: One of the biggest challenges in this area is the provision of charging infrastructure and we will work with chargepoint providers, local authorities and vehicle manufacturers to ensure that we make capacity available where it is needed to support the connection of chargers.

JC: Transport has a key role to play in reducing carbon emissions and improving air quality in our towns and cities. It is a major contributor to the UK greenhouse gas emissions.

IG: Decarbonising transport potentially could have a huge impact on carbon emissions and it’s an area into which Cadent has been making some significant inroads. We believe that the gas distribution companies have an important role to play in cutting transport emissions through repurposing the gas network to deliver zero and low carbon gases, such as biomethane and hydrogen, to fuel HGVs and buses.

AL: It is key. Cars are believed to be responsible for around one third of London’s CO2 emissions. More than 68 per cent of all new cars are purchased by businesses. By giving fleet operators more choice in charging infrastructure could enable more investment in electric vehicles and achieve a zero emissions transport system in London by 2050.

HB: This will have a huge impact on climate change. It’s an opportunity for the network companies to play a trusted partner role and provide the advice, support and investment in the network that will underpin the growth that needs to happen in this area.

AR: The decarbonisation of transport is imperative in meeting the net zero target. The benefits of increasing EVs in the bid to decarbonise are twofold. Firstly, electricity can be generated through renewable technology, and secondly EVs are inherently flexible and the battery storage capabilities provide exciting opportunities for flexible solutions in the transition to DSO.

 

Does the regulator need to be ready to re-open the RIIO2 price control methodology to enable the required policies and money that’s needed to be in place to achieve the net-zero goal?

JC: The RIIO2 methodology is already well set to manage any legislative changes on carbon reduction targets. As such there is no need to re-open the methodology that was determined and published by Ofgem in May 2019. Rather, through the stakeholder dialogue and business plan evaluation stage of the RIIO2 review there needs to be a clear focus on what companies will deliver, what investment is required and how this may be flexed according to any change in circumstances through the course of the price control period.

GC: In RIIO2, we are proposing various possible price control re-openers for the future, as well as volume drivers, which will allow us to make the additional investment in our networks. We will submit a significant and justified proposal for supporting the decarbonisation of both transport and heat, building on the work that will be completed in RIIO1. Assuming, these proposals are accepted by the regulator, we believe that companies will have the ability to achieve GB’s net zero goal. However, if these proposals are not accepted, companies’ ability to react to significant changes in low carbon policies will be stifled. 

HB: We expect that this is an area that will continue to grow in importance both in the rest of ED1 and moving into ED2 as our customers and stakeholders expect more. We have met with Ofgem to talk to them about our Leading the North West to zero carbon plan and the leadership we’re showing in this area.

AR: Given the need to embrace new technical and commercial solutions in RIIO-ED2, I am disappointed with the proposed cost of equity range which runs contrary to the independent analysis provided to Ofgem on the level of risk inherent in the delivery of critical infrastructure. It is critical that Ofgem remains open to feedback and substantive change that will allow the development of business plans that fully deliver on stakeholder ambitions. SSEN will continue to advocate constructively and robustly for a regulatory framework that strikes the right balance between ensuring efficiency and affordability with delivering the necessary investment to improve services for consumers and drive further progress towards a low carbon, flexible energy system.

 

 

Industry Insights

Ensuring the future energy system is clean and green

David Smith, chief executive of the Energy Networks Association (ENA), discusses the energy networks role in driving decarbonisation forward.  

Britain’s energy networks have a fantastic track record of delivering for the public: the cost of running the networks has fallen nearly 20 per cent since 1990, power cuts are at record lows and on average gas customers can expect an unplanned outage only once every 140 years. At the same time, electricity grids across the country have played a leading role in delivering the record levels of renewable energy, working with gas grids to help propel Britain forward on its mission to power past coal.

None of this would be possible without the stable regulatory climate that has delivered sustained investment in our energy networks. That investment is not only essential to delivering the infrastructure and innovation we need to deliver the low carbon transition and clean growth, but to do so in the fairest and lowest cost way for the country.

A joint, industry-wide approach is essential to delivering this transition. The Energy Networks Association (ENA) has been leading in this respect through the Open Networks Project, which is laying the foundations for Britain’s smart grid, along with the Gas Decarbonisation Pathways Project, which sets out our industry’s plans for decarbonising Britain’s gas grid.

Both these projects form part of a wider transformation of the energy sector that is already underway. As new demands get placed on the networks, such as a significant increase of electric and hydrogen vehicles, it is vital that the networks operate within a regulatory framework that is able to respond and allow them to make the vital investment needed to keep the lights on and heat peoples’ homes as efficiently and safely as possible.

The RIIO2 price controls and the decisions made on them by the regulator will have a major influence on our future energy system and the wider economy that it serves. RIIO2 should not therefore be considered in isolation but in this wider context and explicitly recognised as part of a wider strategy for meeting Britain’s climate change targets. The rise in importance of climate change to the British public shows that the country’s interests go beyond short-term costs. It is important that Ofgem understands and reflects that when it comes to making decisions about the RIIO2 price control.

In order to achieve the decarbonisation of the economy it is vital we have the right framework in place to avoid slowing progress or losing opportunities. There is a clear need to ensure that levels of private sector investment in our networks continue to remain sufficient for the network companies to play the fullest role in delivering the government’s policies to secure net zero. 

The current proposals for RIIO2 as outlined by Ofgem, if implemented, could have a negative impact on their ability to support and facilitate the government’s initiatives and objectives for clean growth and the wider economy. This is a result of a disconnect between regulation and wider strategic context and Ofgem’s almost exclusive focus on short-term reductions to consumer bills and reducing networks returns significantly below ‘fair’ levels.

The aim must be the regulatory ‘sweet spot’ that strikes the right balance between attracting necessary levels of investment and ensuring that the public pay a fair amount for the energy networks. The risk is that the result of the proposed approach will be felt for decades with the costs borne by future consumers far outweighing any short-term benefit to current bill-payers, which itself is questionable and uncertain.

Our system of network regulation, and the RIIO1 price control in particular, have made Britain a superpower of renewable energy. Labour’s plans for state ownership will turn back the clock on the progress being made and jeopardise the very transformation to our networks that has made them the most innovative in the world. The end result would be that progress towards deeper decarbonisation would stall just at the point when it needs to accelerate.

The companies responsible for grids have delivered huge levels of investment that have led to record levels of clean energy, lower costs and fewer power cuts than ever before. At the same time, the safety for staff at network companies has improved exponentially. Under state ownership the energy networks were more expensive, less reliable and less safe for staff. To go back to those days at a time when priorities include clean growth, keeping costs low and delivering Britain’s Internet of Energy would, at best, be retrograde and, at worst, be simply irresponsible.

Innovation in new technologies and systems like electric vehicles, smart hybrid heating systems and the hydrogen economy have made today the most exciting time for the energy networks. In the coming months and years it will be important to make sure that we have a regulatory and policy framework that takes into account the risk associated with the pace of technological changes, delivers the policy and climate objectives outlined by government and the Committee on Climate Change and most importantly that delivers for the public.

 

 

Unlocking the potential of hydrogen

Anna Turley, MP for Redcar and chair of the Government’s All Party Parliamentary Group on Hydrogen, on why unlocking the UK’s hydrogen potential could be part of the solution to climate change.    

I was pleased to see the Government’s commitment to reduce greenhouse gas emissions to almost zero by 2050. The recent climate change protests emphasised that there are hugely important political decisions to be made in achieving an environmentally friendly future. How we cut carbon emissions and achieve clean growth is an issue that we must devote huge amounts of energy into answering.

As chair of the APPG on Hydrogen, I know there are innovative projects underway in creating clean energy and the UK has quickly established itself as a world-leader in hydrogen technology. Given the recent announcement, it’s important that the Government, local authorities and the sector work together to maximise this opportunity.

One of the biggest barriers to eliminating carbon emissions will be looking at how we heat people’s homes in the future and hydrogen will play a crucial role in this. Large-scale conversion to hydrogen has the potential to drastically cut carbon emissions. In the UK, around 30 per cent of greenhouse gas emissions are from the heating of homes and businesses. Converting this gas supply to hydrogen would cut this to zero. Not only would this cut carbon emissions, but it would create and sustain thousands of quality jobs and unlock innovation across a number of sectors. That’s why I am proud to have the backing of the unions, UNISON and GMB on our future energy focus.

It is clear that there is a strong interest from central government for a hydrogen economy, prior to the Prime Minister’s announcement, you only need to look at the commitment made by the Chancellor in the Spring Statement to decarbonise gas which will unlock innovation in other sectors.  The Government has also recently announced that six hydrogen trains will be introduced in the new East Midlands Railway franchise. This is a good start, but the Government needs to take swift action to deliver on its promises for clean energy and unlocking the UK’s hydrogen potential could be the answer.

We need to provide a real solution to the important questions being put to us by a public becoming increasingly concerned about climate change. The APPG will continue to work with industry and politicians to deliver on our commitment for a future hydrogen economy. It’s now time for the Government and Parliament to realise this ambition being shown out in the regions and put their backing into hydrogen.

 

 

Transitioning to low-carbon heating

Phil Sheppard, director of gas transmission at National Grid, reflects on how gas can be part of the net-zero equation.

In a political environment where it seems difficult to look beyond the prospective EU exit date this autumn, it was welcome to see a far-reaching Government decision in June to legislate for net-zero emissions. It gives Britain an opportunity to establish its leadership in emissions reduction – and to create new economic opportunities for the UK in doing so.

However, the hard work – and cost – lies ahead. Industry and government must now drive the huge progress needed to decarbonise heat and transport. Innovations in hydrogen conversion, heat pumps and hybrid boilers all need extensive research and development, right now. In addition, we want the transition to a clean system to be fair, ensuring no one gets left behind, and taking place at the lowest possible cost for bill payers.

This is where gas can be part of the net-zero equation. While electricity provides a fifth of the energy for the average dual fuel consumer, it represents over half the cost. Gas keeps 80 per cent of Britain’s homes warm and comfortable, generates 40 per cent of its electricity and fuels industrial and manufacturing processes. It can help to decarbonise heat, the biggest source of UK carbon emissions from energy, affordably and with least disruption to consumers.

Natural gas has already been instrumental, alongside renewables, in reducing coal to a 5.4 per cent share of electricity generation (2018 figures). Indeed, Britain benefited from electricity transmission without coal for 18 days consecutively from 17 May to 4 June this year: unthinkable just six years ago, when coal accounted for 40 per cent of electricity generation. It is gas that has provided the market flexibility to accommodate renewables.

We’re working across networks, supporting the Energy Networks Association (ENA) Gas Decarbonisation Pathways project. Gas networks are developing a comprehensive vision for the future, incorporating biogas, hydrogen blending and smart hybrid heating systems to enable the UK to meet its climate change targets in the least disruptive way.

All credible pathways indicate a role for the gas grid, with electricity alone unable to meet peak winter heating needs. The Committee on Climate Change backed up this view in its recent net-zero report, proposing that 68 per cent of today’s total demand for gas would still be required in 2050.

There are still 2.53m households living with fuel poverty in the UK, with the average gap to affordability being £321 per year (BEIS, June 2019) – this means those households having to make decisions every day between fundamental needs. ‘Food or heat?’ is not a question they should need to ask. We owe it to these consumers to maximise what we can do with existing networks, a view echoed by consumers outside this group.

If Britain needs to invest one trillion pounds over the next 30 years to reach net zero, then as a nation we must adapt those networks which will help us to reach the emissions target and minimise the cost burden: but there needs to be a crystal-clear policy decision on who pays, and how to prevent further families falling into the fuel poverty trap.

Accordingly, we are now working with the gas industry on exciting transformational engineering projects to drive down the costs of decarbonising networks. These are the green shoots of a role that the national transmission system (NTS) and gas distribution networks can play in a net-zero energy future, with the potential to move pure hydrogen, renewable biogas, and blends of gas around Britain. We should remember that one million homes today are heated by bio-gas.

National Grid Gas Transmission has three live hydrogen projects in play to decarbonise gas: Project Cavendish; Aberdeen Vision; and Hydrogen in the NTS (HyNTS).

Overall, biomethane in decarbonising heat may be limited by its total potential and competing other uses: but it could still play an important role across all clean heat pathways, especially in hybrid heat pump solutions where a lower quantity of gas is needed.

If biogas and hydrogen become the building blocks of providing future heat, much of the existing infrastructure used to transport gas could remain in place. Consumers could have similar appliances, and the storage challenges of heat could be met in broadly the same way as they are by natural gas. Industrial processes relying on heat could also benefit.

For too long, heat has been on the energy policy back-burner, the story concentrating instead on power and transport. We must now address the uncertainties to allow policy-makers to move forward to an exciting new chapter of making heat green, affordable and easy for all consumers.

 

About the campaign

With so many changes taking place in the energy system no one has all the answers. This is clearly a very exciting time to be working in the industry – gone are the days of essentially maintaining the system and keeping it running. The changes we’ll see in the next 10-20 years are mind boggling and will provide ample opportunities for innovation, new businesses and systems. Network has been putting a focus on the future through its Network of the Future campaign.

This campaign sits alongside the wider Utility of the Future campaign as we look to find ways to tackle the big challenges facing networks and help them chart a course towards transformation.

Working alongside our sister brands Utility Week and WWT, Network is running a year-long campaign which will work to rally networks and their supply chain around a collective view of the future which is both challenging and realistic. The year-long programme of articles, research insights and more will come to life at Utility Week Live 2020, where we will gather contributors and key sector influencers.

The campaign will gravitate around five big topic areas which are driving transformation across the electricity, gas and water sectors:

• Climate change
• Customers
• Regulation
• Technology
• Skills & workforce

While Network’s content will retain a strong focus on the changes taking place across the nation’s energy system, and examine industry-specific areas such as the decarbonisation of transport and digitalisation, Utility Week will take a lead on topics which require cross-sector thinking, such as addressing skills gaps and leveraging key technology platforms.

To help us shape the campaign, we are grateful for the support of our expert advisory board. They will ensure we pose the right challenges to the status quo and the most thought-provoking ‘what if?’ scenarios. The board includes:

 

PROFESSOR TONY CONWAY

Director, Conway Strategic Water Consulting

 

STEVE KAYE

CEO, UKWIR

 

DR KEITH MACLEAN OBE

Director, Providence Policy

 

PHILIP NEW

CEO, Energy Systems Catapult

 

DR JEFFREY HARDY

Senior research fellow, Grantham Institute, Imperial College London

 

PETER JONES

Technical manager, Energy Research Partnership

 

JOHN SCOTT

Director, Chiltern Power

 

Further strategically important inclusions on our advisory board are pending confirmation.

 

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