lens project: scenario development inputs project: scenario development inputs november 2007 2...

LENS Project: Scenario Development Inputs

November 2007

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CONTENTS 1 INTRODUCTION..................................................................................................... 5

1.1 BACKGROUND...................................................................................................... 5 1.2 TERMINOLOGY..................................................................................................... 6 1.3 DOCUMENT STRUCTURE ...................................................................................... 7

2 REVIEW OF RECENT SCENARIOS INITIATIVES ......................................... 8

2.1 ELECTRICITY NETWORK SCENARIOS FOR 2050 (SUPERGEN FUTURE NETWORK TECHNOLOGIES CONSORTIUM, 2005) .............................................................................. 9

2.1.1 Strong Optimism ....................................................................................... 10 2.1.2 Business as Usual ..................................................................................... 11 2.1.3 Economic Downturn ................................................................................. 12 2.1.4 Green Plus ................................................................................................ 12 2.1.5 Technological restriction .......................................................................... 13 2.1.6 Central Direction ...................................................................................... 14 2.1.7 Analysis ..................................................................................................... 15

2.2 ELECTRICITY NETWORK SCENARIOS FOR 2020 (SUPERGEN FUTURE NETWORK TECHNOLOGIES CONSORTIUM, 2006) ............................................................................ 16

2.2.1 Continuing Prosperity............................................................................... 17 2.2.2 Economic Concern.................................................................................... 17 2.2.3 Environmental Awakening ........................................................................ 18 2.2.4 Supportive Regulation............................................................................... 19 2.2.5 Analysis ..................................................................................................... 20

2.3 ENERGY FOR TOMORROW (DTI FORESIGHT, SEP 2001)..................................... 20 2.3.1 World Markets .......................................................................................... 21 2.3.2 Provincial Enterprise................................................................................ 22 2.3.3 Global Sustainability ................................................................................ 22 2.3.4 Local Stewardship..................................................................................... 23 2.3.5 Analysis ..................................................................................................... 24

2.4 THE ENERGY REVIEW (PIU, FEB 2002) ............................................................. 24 2.4.1 Scenarios................................................................................................... 24 2.4.2 Analysis ..................................................................................................... 27

2.5 THE CHANGING CLIMATE (RCEP, JUN 2000) .................................................... 27 2.5.1 RCEP Scenario 1 ...................................................................................... 28 2.5.2 RCEP Scenario 2 ...................................................................................... 29 2.5.3 RCEP Scenario 3 ...................................................................................... 29 2.5.4 RCEP Scenario 4 ...................................................................................... 30 2.5.5 Analysis ..................................................................................................... 31

2.6 UK ELECTRICITY SCENARIOS FOR 2050 (TYNDALL CENTRE, NOV 2003).......... 31 2.6.1 Scenarios................................................................................................... 31 2.6.2 Analysis ..................................................................................................... 33

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2.7 DECARBONISING THE UK (TYNDALL CENTRE, SEP 2005) ................................. 34 2.7.1 Red Scenario ............................................................................................. 34 2.7.2 Blue Scenario ............................................................................................ 35 2.7.3 Turquoise Scenario ................................................................................... 36 2.7.4 Purple Scenario ........................................................................................ 37 2.7.5 Pink Scenario ............................................................................................ 38 2.7.6 Analysis ..................................................................................................... 39

2.8 ADDITIONAL SCENARIO WORK ........................................................................... 40 2.8.1 Energy Markets Outlook (BERR/Ofgem Oct 2007) .................................. 40 2.8.2 Decentralising UK Energy (Greenpeace/WADE Mar 2006).................... 41 2.8.3 The Role of Electricity (Eurelectric Jun 2007) ......................................... 41 2.8.4 Electric Power Industry Technology Reports (EPRI 2005)...................... 42 2.8.5 Using energy scenarios to explore alternative energy pathways in California (Energy Policy Vol33 Jun 2005) ............................................................. 42 2.8.6 World Transport Scenarios (Tyndall Apr 2005)....................................... 43

2.9 ANALYSIS OF THE MAJOR SCENARIO REPORTS.................................................. 43 2.10 POTENTIAL INPUTS FROM RECENT SCENARIOS INITIATIVES............................... 49

3 REVIEW OF LENS CONSULTATION AND ENSG HORIZON SCANNING 52

3.1 LENS CONSULTATION....................................................................................... 52 3.1.1 Responses to Ofgem Open Letter of 15 June ............................................ 53 3.1.2 LENS Project Workshop of 17 August ...................................................... 54

3.2 ELECTRICITY NETWORKS STRATEGY GROUP (ENSG) HORIZON SCANNING...... 55 3.2.1 Climate Change ........................................................................................ 55 3.2.2 Electricity Demand ................................................................................... 56 3.2.3 Electricity Generation and Fuel Sources.................................................. 56 3.2.4 Environment Background ......................................................................... 57 3.2.5 Politico-Economic Background ................................................................ 57 3.2.6 Skills and People....................................................................................... 57

3.3 POTENTIAL INPUTS FROM LENS CONSULTATION AND ENSG HORIZON SCANNING...................................................................................................................... 58

4 PROPOSED INPUTS FOR LENS SCENARIO DEVELOPMENT.................. 61

4.1 HIGH LEVEL LENS INPUTS................................................................................. 61 4.2 NETWORK SPECIFIC LENS INPUTS..................................................................... 62 4.3 PROPOSED INPUTS SUMMARY ............................................................................ 64 4.4 INPUT AREAS FOR FURTHER INVESTIGATION ..................................................... 64

5 POTENTIAL SCENARIO THEMES................................................................... 66

5.1 DISCUSSION AND ANALYSIS ............................................................................... 66 5.2 POTENTIAL THEMES FOR LENS ......................................................................... 67

6 REFERENCES........................................................................................................ 70

7 APPENDIX: LENS CONSULTATION RESPONSE LETTERS...................... 73

7.1 CUSTOMER EXPECTATIONS, SECURITY AND QUALITY OF SUPPLY, AND NETWORK PERFORMANCE LEVELS................................................................................................... 73

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7.2 RESOURCES AND SKILLS REQUIREMENTS ........................................................... 73 7.3 TECHNOLOGICAL DEVELOPMENT IN NETWORKS AND ON THE CUSTOMER SIDE... 74 7.4 PLANNING FRAMEWORKS................................................................................... 74 7.5 LEGISLATIVE FRAMEWORK ................................................................................ 75 7.6 REGULATORY FRAMEWORK ............................................................................... 75 7.7 DEMAND GROWTH AND PATTERNS OF USE ......................................................... 75 7.8 GENERATION DEVELOPMENT AND FUEL MIX ...................................................... 76 7.9 NETWORK RESILIENCE ....................................................................................... 76 7.10 HEALTH, SAFETY AND ENVIRONMENTAL PRESSURES ......................................... 76 7.11 FUTURE ROLE OF POWER NETWORK BUSINESSES................................................ 77 7.12 INTERNATIONAL CONTEXT ................................................................................. 77

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1 Introduction

1.1 Background A good set of scenarios will provide a plausible range of external circumstances relevant to the recipients and will also cover the important areas of concern to the stakeholders. Given the degree of uncertainty associated with planning for the future, scenarios also have an important role, and historically have been particularly successful, in challenging preconceived assumptions about the nature of future developments, thus giving their users the opportunity to plan robustly against a wider range of possible future outcomes. To achieve this, high quality information is required during the scenario development stage to ensure that the resulting scenarios provide a valuable reference point for future strategy development. In particular, if the scenarios are to be successful in encouraging their users to think more broadly about the various ways in which the future could evolve, and thus to deliver new and deeper insights for strategic planning, it is important that the information gathered during the initial stages of the scenario process should be drawn from a wide number of sources, and a broad variety of concerned stakeholders. This breadth of information and perspective should help to ensure that, whilst the scenarios cannot be expected to cover every conceivable outcome, as a set they should at least span the ranges of the potential 'possibility space'. In the LENS Scenarios Methodology [15] the following stages were listed as an approach to scenario development: 1 Define the recipient 2 Frame the focal question 3 Information gathering 4 Identify themes 5 Sketch possible pathways 6 Write scenario storylines 7 Model scenarios 8 Identify potential implications of scenarios on the focal question 9 Identify and develop potential strategies This report is primarily focussed on stage 3 with a final section (5) initiating the process of identifying themes (stage 4). The first step is a review of previous scenario work relating to the energy and electricity markets. This key background material contains many issues and themes that are identified as potential inputs to the LENS process. In addition, stakeholder input and feedback is vital throughout the process of developing scenarios and hence the responses to the LENS project consultation are reviewed and incorporated into

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the final set of proposed inputs. As stated in the methodology, the primary output from the information gathering activity is this document, LENS Scenarios Development Inputs, which collates and reviews contributory sources of information with the aim of summarising relevant data and developing proposed inputs for the LENS scenarios.

1.2 Terminology This report follows the initial stages of the scenario development process, describing the process of gathering and identifying relevant information, and ordering this information in a coherent and logical manner. This description entails the use of a specific terminology set which is clarified here. Issues are the ideas, trends, problems, concepts, developments, or changes that are expected to be important in considering the future of the electricity sector and more specifically power networks. Although important in and of themselves, issues are regarded as low level data in the context of scenario development. Themes are the higher level groups of issues and main areas of interest to a scenarios activity. By grouping issues under broader themes, it begins to become clearer a. what will be the broad and high level dynamics that will differentiate the scenario storylines from one another (the themes), and b. what more specific and technical details will be of relevance to each broad storyline (the issues). In our review and analysis, themes are extracted from previous scenarios work as an aid to understanding the scenarios that emerged from those initiatives and as a reference point for the themes that will be selected for the LENS project in stage 4. Inputs refer to the issues, themes and data that are of specific use to the LENS project. These are identified in section 4 and presented as a set of high level inputs that emerge from the identified themes and groups of issues. In addition a set of network specific inputs emerge from the lower level issues. These inputs will allow the coherent and plausible development of internally consistent scenario themes, scenario pathways and storylines (stages 4, 5 and 6). Stages 5 and 6 are not however considered in this report. The focus of this report is to set out the main inputs to the LENS project and this takes the form of high level inputs, network specific inputs and also some reference data from previous scenarios activities.

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1.3 Document Structure This report is the first of three to be produced by the LENS project team with the following two presenting first a set of draft scenarios and secondly a final set of scenarios from the LENS project. Section 2 of this document reviews recent scenario initiatives including methodology, themes, the resulting scenarios and key ranges of output parameters such as generation and demand. Section 3 reviews stakeholder contributions to the LENS consultation process so far, including responses to the Ofgem open letter of 15 June and comments made at the LENS project workshop of 17 August. It also reviews the ENSG Horizon Scanning projects, summarising the issues and main themes they have identified in relation to network development. Section 2 and section 3 each conclude with an analysis of the main themes and issues emerging from the material reviewed and then draw together the potential inputs relevant to the LENS project. Section 4 takes the potential inputs to the LENS project identified in sections 2 and 3 and uses these to develop a final set of proposed inputs for the LENS project. Finally, section 5 presents possibilities for the main themes that could form the basis for the development of scenarios in the LENS project. Although developing themes is the next step outlined in the methodology process, possible themes naturally emerged in the information gathering process and are presented here for discussion.

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2 Review of Recent Scenarios Initiatives In recent years scenario planning has been used extensively in the energy industry to postulate a number of possible futures and analyse their implications. Significant studies that have used scenario methodology are1 the RCEP energy report, the PIU energy review, DTI Foresight, the Supergen Consortium and Tyndall – Decarbonising the UK. Each body of work has had its own unique perspective, scope and objectives that shaped the approach. Some reports cover the entire energy market and some focus on the electricity market in particular. Some reports are targetive and set a specific objective such as 60% reduction in CO2 emissions while others take an exploratory approach encompassing diverse environmental, political and economic eventualities that are used to forecast possible futures. The majority of scenario reports considered in this chapter are focused on energy mix and related emissions, treating the UK as a whole. Few of these scenarios initiatives have considered regional factors and the corresponding requirements for power network infrastructure to link energy supplies to consumers. The issue of network implications of all the external developments in the energy sector and society as a whole is the primary focus of the LENS project. This section aims to summarize the existing literature, highlighting the main issues considered, main themes investigated and the resulting scenarios. Initially seven major scenario reports are reviewed in detail (sections 2.1 to 2.7). Some additional scenario work is covered briefly in section 2.8. Sections 2.9 and 2.10 then analyse the major reports and extract potential inputs. This review of recent, relevant scenarios will inform the development of scenarios in the LENS project. Table 1 summarizes some of the details of the scenarios critically reviewed for the LENS project including the relevant dates and context of the reports.

1 Full reference and review of these reports is provided in subsequent sections of this report.

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Title Horizon date Publication Date Context

Supergen 2050 2050 Jul 2005 Scenarios for analysis of UK power sector.

Supergen 2020 2020 Jul 2006 Scenarios for analysis of UK power sector.

DTI Foresight 2040 Sept 2001 Scenarios for analysis of UK energy industry.

PIU Energy Review 2050 Feb 2002 Scenarios for forming policy on the energy

industry.

RCEP Energy Review 2050 June 2000 Scenarios for tackling CO2 emissions.

Tyndall 2050 2050 Nov 2003 Scenarios for tackling CO2 emissions.

Tyndall Decarbonising the UK 2050 Sept 2005 Scenarios for tackling

CO2 emissions.

Table 1: Reviewed literature summary

2.1 Electricity Network Scenarios for 2050 (SuperGen Future Network Technologies Consortium, 2005)

This report describes six “high level” scenarios for electricity networks in the year 2050 which were developed by the authors as part of the Supergen Future Network Technologies research programme [1]. The underlying objective was to produce a set of scenarios that would allow the analysis of power network performance from an economic, technical and environmental perspective under a variety of future circumstances. In developing their set of scenarios the authors began by identifying key activities facilitated by electricity networks:

• Energy Use • Electricity Generation • Energy Transportation • Markets and Regulation

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Opinions, forecasts and analyses relating to these areas over the coming fifty years were collated and used to produce multiple “partial scenarios” for each area. The partial scenarios were then further refined and reviewed by the authors and the Supergen consortium to produce six overall scenarios influenced by the following key parameters:

• Economic growth • Technological growth • Environmental attitudes • Political and regulatory environment

The resulting scenarios were entitled:

• Strong Optimism • Business as Usual • Economic Downturn • Green Plus • Technological Restriction • Central Direction

These scenarios are briefly described below with key data and issues of relevance to the LENS project highlighted. Headline data on demand and generation and network implications with potential solutions are highlighted.

2.1.1 Strong Optimism

The key theme of this scenario is strong economic growth in excess of recent times. This corresponds to an increase in electricity demand that is partially offset by increased efficiency. There is a liberal, market based approach from Government which is replicated abroad and develops into integrated European markets. Carbon trading is extended across industry and into the domestic sector. Environmental awareness grows resulting in under-grounding of the transmission network. There is considerable R&D spend on power systems technology. A mix of generation technologies is deployed although there is an increased focus on renewables (50% of generation). Offshore wind generation is a key area of development complemented by on shore wind and marine generation. There is significant fuel cell deployment (35% of generation). The remainder of electricity generation is mainly provided by CHP, Nuclear and CCGT with carbon capture. There is no coal generation by 2050.

Headline data:

• Demand growth = 1.25% p.a. • 2050 Demand = 600TWh

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• Peak Demand = 80GW • Demand variability = Reduces

Network specific features:

• Several interconnectors to Iceland, Norway, Mainland Europe. • Increased transmission demand, particularly on North to South axis. • Undergrounding of transmission network with some HVDC. • Super conductors. • Local network with small scale generation. • Microgrids interfacing with regional network via FACTS. • Energy Storage. • Advanced network protection and control systems.

2.1.2 Business as Usual

As the title suggests, this scenario represents a continuation of current trends with average economic growth and the development of existing technologies. The current market based approach from Government continues along with the liberalization of European markets, however lack of interconnections prevents integration. Carbon trading applies to industrial and large scale commercial users in a pan European market. Environmental awareness remains constant with continued opposition to new transmission network. Conventional generation remains the most important source of electricity, but with a considerably increased contribution from renewables and small-scale plant. CCGT provides 33% of generation with some carbon capture capability. Microgeneration provides 20% of generation. Biomass is used extensively for CHP and provides 15% of generation. The remainder comprises mainly of wind, marine, coal and nuclear.

Headline data:

• Demand growth = 1% p.a. • 2050 Demand = 540TWh • Peak Demand = 80GW • Demand variability = Reduces


• Existing Interconnectors refurbished. • Increased bulk transmission demand proportional to increased energy

demand.

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• Little construction of new transmission facilities. • Undergrounding of environmental sensitive sections of existing

transmission network. • Advanced control systems and FACTS • Limited use of Super conductors. • Increased amount of generation connected to local networks.

Unpredictable flow. • Possible use of Microgrids in rural areas. Restricted to “power parks”

in urban settings.

2.1.3 Economic Downturn

Factors such as fuel price shocks or global recession reduce economic growth and hence growth of electricity demand. Market structures remain the same as those currently planned. European market liberalization continues slowly, however lack of interconnection prevents integration. Carbon trading remains limited to generators and large scale industry. Focus on economic concerns reduces environmental awareness. Investment in the electricity network is generally minimised except where relatively rapid economic benefits can be realised. CCGT provides 55% of generation with negligible amounts of carbon capture. Coal is still used extensively providing 20% of generation. There are small amounts of onshore wind, biomass and microgeneration. There is no use of offshore wind, marine, photovoltaic or nuclear generation.

Headline data:

• Demand growth = steady or -0.5% p.a. • 2050 Demand = 275TWh • Peak Demand = 45GW • Demand variability = Unchanged


• Power network very similar to that of today • Main issue is reliability of aging plant • Asset management and condition monitoring

2.1.4 Green Plus

Environmental concerns dominate the public and political agenda. Disproportionate amounts of CO2 reduction targets fall on the electricity industry. There continues to be a Liberal market structure with the Government providing

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strong incentives for environmental responsibility. Widespread development of European energy markets is aided by increased interconnector capacity. Within the UK regional markets develop in conjunction with microgrids. Emissions trading extends to households and individuals with a high carbon price. The requirements on the transmission network change dramatically with large amounts of electricity transmission required from remote renewable sources to urban load centres. “Through” traffic from Scandinavian countries to Europe adds to the volatility. Renewables accounts for 80% of generation with half of that coming from off shore wind. Microgeneration via fuel cells is widespread and Onshore wind and marine are also well developed. The remaining 20% of generation is via biomass CHP.

Headline data:

• Demand growth = 0.25% p.a. • 2050 Demand = 390TWh • Peak Demand = 50W • Demand variability = Strongly reduced.


• Several Interconnectors to Iceland, Norway, Mainland Europe. • Increased transmission demand from remote areas to urban load

centres. • Volatile, unpredictable demand on transmission network. • Undergrounding of transmission network. • Super conductors, HVDC. • Offshore high capacity transmission lines for North – South

transmission. • Local network with small scale generation. • Microgrids. • Large and small scale Energy Storage. • Advanced network protection and control systems. • Demand side participation.

2.1.5 Technological restriction

Strong economic growth coupled with sparse investment in the power industry characterises this scenario. As a result the industry concentrates on evolution of existing technology. A liberal market structure prevails with incentives for small scale generation and demand side control schemes. European markets liberalise, however lack of interconnection inhibits UK integration. Carbon trading

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extends to industrial and commercial users. Localised energy markets will evolve around micorgrids. Local networks with strong concentrations of embedded generation and demand-side control will become increasingly autonomous and may become able to operate largely in isolation from the electricity network at large. 40% of generation is via CCGT with a small amount of carbon capture. 20% of generation is provided by small scale CHP and 20% by microgeneration. The remaining generation is dominated by onshore wind.

Headline data:

• Demand growth = 1.5% p.a. • 2050 Demand = 680TWh • Peak Demand = 100GW • Demand variability = reduces through demand side control


• Existing Interconnectors refurbished. • Increased bulk transmission demand proportional to increased energy

demand. • Little construction of new transmission facilities. • Undergrounding of environmental sensitive sections of existing

transmission network. • Advanced control systems and FACTS • Limited use of Super conductors. • Condition monitoring • Simple microgrids

2.1.6 Central Direction

A liberal market approach is replaced by prescriptive Government involvement in the electricity market. The economy remains liberal in general however and growth remains steady. Policy focuses on low risk, well proven technology. Environmental awareness sharpens and shapes government policy, resulting in the undergrounding and concentration in a small number of corridors of the transmission network. Government also directs the generation mix, tendering for specific types of generators in particular geographic areas. Incentives are provided where the requirement is not economically viable. Network reinforcement, careful siting of generation and large strategic energy storage systems are the preferred approached to accommodating the increasing demands on the electricity network. CCGT with carbon capture provides 20% of generation as does microgeneration. Biomass and marine are strong contributors with 15% each of generation. Onshore and offshore wind each provides 11% of generation with Nuclear making up the remainder.

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Headline data:

• Demand growth = 0.5% p.a. • 2050 Demand = 430TWh • Peak Demand = 70GW • Demand variability = unchanged.


• Existing Interconnectors refurbished and capacity increased. • Capacity along existing transmission corridors increased. • Some use of HVDC and superconductors. • Large scale energy storage. • Microgrids limited to “power parks” • Demand side control.

2.1.7 Analysis The focus of the SuperGen scenarios is clearly the electricity sector. Although the scenarios are created using the main themes of economic and technical growth, environmental attitudes and the political regime, these inputs are used to shape scenarios described primarily in terms of the resulting electricity demand and generation profiles. Other areas of energy demand such as transport and heating are mentioned briefly, if at all. As a result, each scenario description is able to go into considerable detail on the demand characteristics, generation technology and geographic distribution. In addition high level network implications are explored and potential enabling technology described. This is a valuable example of using scenarios to analyse a range of possible paths the GB electricity networks require to take to meet the external demands placed on them. It provides a useful point of reference for potential levels of future demand and a wide range of alternatives on the potential technologies that could be required. This is directly relevant to LENS as there are few examples of scenario work that focus specifically on the electricity network and hence provide some level of detail on network technology.

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2.2 Electricity Network Scenarios for 2020 (SuperGen Future Network Technologies Consortium, 2006)

Building on the 2050 scenarios the SuperGen networks research consortium developed a set of scenarios for the year 2020 [2] that aimed to be consistent both with the current state of the electricity industry in Britain and the achievement of the ultimate electricity generation, supply and utilisation infrastructure patterns as described in the 2050 scenarios. The nearer-term scenarios were deemed of value in assessing the steps necessary to achieve the long-range destinations. Initially the present GB demand and generation figures were summarised and short and medium term forecasts made. Forecasts were made on the basis of information from National Grid, distribution network operating companies and large industrial customers. Through the process of “backcasting” the authors judged that certain 2050 scenarios would follow the same path up to 2020 before diverging (see Figure 1). As a result the six scenarios were refined to four related scenarios for 2020.

StrongOptimism

TechnologicalRestriction

Businessas Usual

CentralDirection

GreenPlus

EconomicDownturn

ContinuingProsperity

SupportiveRegulation

EnvironmentalAwakening

EconomicConcern

PresentDay2005

2020

2050

Figure 1: Pathways from 2020 scenarios to 2050 scenarios (SuperGen)

The four scenarios are described briefly in the sub-sections below.

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2.2.1 Continuing Prosperity

In this future buoyant economic growth is supported by strong research and development investment in electricity networks and generation technology. Growth in demand for energy services is addressed through a combination of continuing investment in network infrastructure and strong promotion of load management measures such as energy efficiency and demand-side participation. There is continued investment in renewable energy with onshore wind dominating and offshore wind developing further by 2020. Biomass is the second largest renewable generator and tends to appear in the form of smaller plant connected to distribution networks. Non-renewable generation is dominated by natural gas-fired units, mainly in the form of CCGT. Existing coal and nuclear plants have been life extended. The interconnector circuits between Scotland and England have been upgraded to operate at higher voltages and electricity imports from Europe have increased through the construction of a second interconnector.

Headline data:

• Demand growth = slightly reduced from present day. • 2050 Demand = 415TWh • Peak Demand = 66GW


• Demand Side management • Smart metering • Power electronic compensation & flow control at transmission level • Upgrading of transmission network • Microgrid trials

2.2.2 Economic Concern

Here the economy enters a period of moderate decline and there is little investment in the electricity industry. Electricity demand has limited growth due to the economic situation. Concern for the economy replaces environmental issues in the public perception and emissions targets are relaxed. Although renewables continue to develop the deployment of wind and marine technology is restricted by network constraints. Biomass develops reasonably strongly with CHP being integrated to new building developments. However, large generation dominates, supplying 85% of electricity. Existing coal and nuclear plants have been life extended. New build has been a mixture of CCGT and coal-fired steam plant. Transmission and distribution networks remain largely unchanged with condition monitoring used to aid life extension. Generation connected to

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distribution networks is mainly confined to biomass fuelled plants of a few MW capacity in rural areas, where the location is influenced by the topology of the network as much as the location of the biomass resource.

Headline data:

Demand growth = slight growth. 2050 Demand = 360TWh Peak Demand = 60GW


• Little change in network topology. • Priority is life extension and capacity management.

2.2.3 Environmental Awakening

This scenario describes a future in which environmental concerns start to become increasingly important in the public perception. This is brought about by heightened awareness of the environment and climate change. Electricity demand will have reached a peak and started a steady decline due to increased efficiency measures. Participation in demand-side management schemes by commercial and industrial concerns results in the demand for electricity being less variable with time of day. There is strong investment in renewables. Initial development is in onshore wind with the focus shifting to offshore as resistance grows to the visual impact of wind farms. Marine energy sources also develop and start to achieve commercial success. Biomass develops strongly in the form of relatively large generating units connected to higher voltage distribution networks. Large generation plant is dominated by CCGT, existing nuclear is life extended and coal is in rapid decline. Some extension of the transmission network has taken place but environmental pressure has prevented general network reinforcement. However, HVDC technology has been introduced to an interconnector route between Scotland and England as a first step towards an offshore interconnector. Various new approaches to network management, particularly at distribution voltages, are employed to manage the progressively more active nature of the power networks.

Headline data:

• Demand growth = declining growth. • 2050 Demand = 360TWh • Peak Demand = 60GW

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• Demand Side management • Smart metering • Power electronic compensation & flow control at transmission level • Upgrading of transmission network and some extension to remote

areas. • One HVDC link North to South. • Undergrounding an increasing trend. • Microgrids

2.2.4 Supportive Regulation

In this scenario the government exerts a gradually increasing influence over the development of the electricity industry. This is influenced by increasing public concern over energy security and also strategic planning issues. Electricity demand grows strongly but is somewhat restricted by government promotion of demand-side participation. Government promotes low carbon technology through R&D expenditure and market incentives. Wind generation grows strongly with primarily onshore developments. Offshore wind generation is supported and is starting to develop. The development of some marine generation has also been supported centrally. Biomass has been heavily promoted through agricultural subsidy. The requirement for diversity has seen the revival of nuclear generation with a new fleet of power stations starting to roll out. CCGT remains the largest single source of electricity. Carbon capture has been encouraged via incentives and grants and is starting to be taken up. Transmission network reinforcement has focused on improving the capacity of existing corridors through increases in plant capacity as it falls due for replacement or refurbishment. Volatility of output from wind generation connected to distribution networks is absorbed in part by demand side participation programmes, but there remains an increased level of variation in power transferred between the distribution system and the transmission network. Improvements to control systems at the interface between transmission and distribution are necessary to avoid power quality problems.

Headline data:

Demand growth = relatively strong. 2050 Demand = 415TWh Peak Demand = 63GW

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• Power electronic compensation & flow control at transmission level • Upgrading of existing transmission network corridors. • Distribution networks affected by connection of renewable generation

sources. • Demand side participation programmes • Improved control systems at transmission and distribution network

interfaces.

2.2.5 Analysis As a continuation of the Supergen 2050 scenarios work, this report naturally takes a similar approach and focuses primarily on the electricity sector. Within each scenario a short description of the external influences (e.g. economic, political, environmental, etc.) is followed by a detailed description of generation mix and capacities. In addition, high level implications for the transmission and distribution network are explored. One of the valuable elements of this report is as an example of using “backcasting” to understand possible pathways from the present situation to a set of predefined futures. A significant aspect is the conclusion that some quite different scenarios for 2050 share a common 2020 scenario allowing multiple long term futures to be planned for in the short term. In addition, the calculated levels of demand and generation provide an interesting perspective on the expected rate of change in the nearer term future. These findings will provide useful reference points for the development of the LENS scenarios as well as identifying and justifying the main drivers for change in the GB power networks.

2.3 Energy for Tomorrow (DTI Foresight, Sep 2001)

The objective for the Foresight scenarios [3] was to develop a robust view of the research and development and associated activities that will provide the best prospect for achieving technology commercial successes over the coming forty years. The DTI task force approached the problem by considering the implications of the four environmental scenarios already developed within the Foresight programme [4] and analyzing the energy implications of these scenarios. The chosen scenarios were Global scenarios set in a UK context that attempted to consider the main aspects of our society as they might be in the year 2040. The scenarios were developed using two fundamental dimensions of change: social values and governance systems. The social values dimension

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describes patterns of economic activity, consumption and policymaking. The governance systems dimension describes the structure and scale of political authority. When considering energy implications the starting premise was that North Sea oil and gas would be in decline and global production of these fuels would have peaked. Global energy demand would continue to increase to double the level of present and there would be increasing concern over CO2 emissions. All of these factors lead to a shift in the mix of energy sources away from these fuels. Each scenario was analyzed by working groups from the industry and the viability, stability and desirability of each were evaluated in order for R&D requirements and challenges to be identified. The developed scenarios were entitled:

1. World Markets 2. Provincial Enterprise 3. Global Sustainability 4. Local Stewardship

2.3.1 World Markets

This scenario describes a highly materialistic world with high levels of consumption and mobility. Sustainable development is a marginalised political goal. Large firms dominate global markets and there is limited regulation as the role of government in economic management declines. Energy markets are dominated by fossil fuels, mainly gas, and demand for electricity and transport fuels grows. Energy prices remain low and efficiency is not a priority. More individuals live alone in smaller households migrating to the south east of England.

Key R&D issues:

• Improved fossil fuel extraction • Increased efficiency of generation and end-use • Carbon capture • Emissions trading

Network specific issues:

• Modular, distributed generation will be prevalent. • Shortfall in knowledge and technology to build secure and stable

network incorporating distributed generation.

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2.3.2 Provincial Enterprise

This scenario envisages a world of private consumption values with low level policy systems asserting local and regional priorities. The narrow outlook of this society results in slow UK growth compared to the global rate and economic policy is concerned with supporting national champions against foreign competition. There is little commitment to social and environmental goals. Supplies of fossil fuels last longer and there is a strong tendency to extend the lives of existing generators, including coal and nuclear. There is little development of renewable technology. The trend towards smaller households is constrained by high cost of housing. Energy use per household is stable with modest demand increase offset by limited efficiency.

Key R&D issues:

• Extension of plant life • Resolution of planning difficulties • Biomass and waste utilisation


• Some distributed generation. • Shortfall in knowledge and technology to build secure and stable

network incorporating distributed generation. • Large scale energy storage may be required.

2.3.3 Global Sustainability

In this world, social and ecological values are pronounced and there is strong collective action in dealing with environmental change. National governments participate in the negotiation and enforcement of global economic, social and environmental agreements. The “greening” of business is pervasive. Growth is high and there are high levels of investment in projects with long-term benefits to the economy and society. The rate of household formation falls but increased homeworking limits any reduction in the demand for domestic energy. Natural gas is the initially dominant energy source up to 2010 with renewables becoming the major energy source thereafter. Hydrogen becomes a major energy carrier by 2030 and the drive for low emissions allows a partial revival of nuclear.

Key R&D issues:

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• Solar, wind, wave and tidal energy conversion • Fuel cells • Carbon capture • Nuclear safety and fuel disposal • Emissions trading • Hydrogen infrastructure


• Modular, distributed generation will be prevalent. • Shortfall in knowledge and technology to build secure and stable

network incorporating distributed generation. • Large and small scale energy storage • Advanced control systems required to cope with drastically altered

network conditions. • Increased efficiency in both generation and end use.

2.3.4 Local Stewardship

This Scenario describes a world of strong local and regional governments that focus on social and economic values. Regional cultural identities are revived and the family is strengthened as the primary social unit. Flows of people and trade across economic and political boundaries are constrained. The trend towards smaller housing is reversed and there is general migration away from large cities. Despite more people working from home, energy use per household declines due to increased efficiency. Energy resources are exploited at a local level, both renewable and fossil fuel. This is the only scenario where energy demand declines.

Key R&D issues:

• Fuel cells • Carbon capture • Fuel cells • Clean Coal technology


• Energy Storage capability • Increased efficiency of generation and end-use • Network stability concerns.

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2.3.5 Analysis The Foresight scenarios report takes a relatively high level view, covering the whole energy market and takes into account social, political and environmental issues. It provides some initial thoughts on the technological issues for future networks that allow conclusions to be drawn on key areas of network R&D common to all futures. Although detailed analysis of future network technology is not in the scope of this report, the structure of the scenarios provides enough information on the external environment to be of use as a starting point for a more detailed, network focussed project. The scenarios provide information on likely levels of demand, generation types, population demographics and social trends that would allow assumptions to be made on network requirements in each given future. This report provides a valuable perspective on the different themes that can be used to shape scenarios and the type of scenarios that would be relevant the LENS project.

2.4 The Energy Review (PIU, Feb 2002)

2.4.1 Scenarios The scope of the Performance and Innovation Unit (PIU) report [5] included three main objectives:

1. To set out the objectives of energy policy to 2050 2. To develop a framework for reconciling the trade-offs among the

different objectives 3. To develop a vision and strategy for achieving these objectives and to

identify short and medium term steps that need to be taken. In attempting to meet these objectives the PIU set out a policy framework addressing sustainable development from an economic, environmental and social objectives as well as addressing energy security. The framework was built around the premise that climate change objectives must largely be achieved through the energy system. Where energy policy decisions involve trade offs between environmental and other objectives, then environmental objectives would tend to take preference. The PIU used scenario analysis to produce detailed projections of supply and demand in the medium (2020) and long (2050) term. They took the starting

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position that the challenge for 2050 is to deliver significantly more energy services with substantially lower carbon emissions. The challenge for the medium term is to keep this option open. The PIU based their work on the four scenarios created by the DTI Foresight initiative (see section 0 above) with the addition of a fifth scenario: Business As Usual (BAU). The four original scenarios are used for long-term analyses and the BAU scenario used for medium term analysis.

1. World Markets 2. Provincial Enterprise 3. Global Sustainability 4. Local Stewardship 5. Business as Usual

Figure 2: PIU scenarios

The scenarios remain broadly the same as described by the DTI Foresight initiative, mixing degrees of governance and social values, however the PIU attempt to provide quantitative data for each scenario. Demand is estimated by assuming the number of consuming units, the energy service level required and the efficiency with which that service is provided. Demand is aggregated into heating, power and transport. The supply options are then matched to these demands and the total primary fuel and carbon emissions derived.

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The main use of scenarios within this report was to quantify possible levels of energy supply and demand and to identify the main issues that needed to be considered when forming energy policy. The main themes were; demand for energy services, improving energy efficiency, energy supply fuels, CO2 reductions.

Key points from the long-term analyses: • Energy demand and efficiency are quantified to produce an overall level of

demand for each scenario. o The demand is split into Domestic, Services, Transport and

Industry sub sections. o Efficiency is given a high level of importance and features in every

scenario as a limiting factor to the increase in overall demand. • Estimates of possible primary fuel supply mixes are provided for each

scenario with quantities given in ‘mtoe’. o Natural Gas given a big role. Mainly imported by 2050. o Oil likely to remain key for transport. Hydrogen a possible

replacement. o Coal only likely to remain in use if carbon capture deployed. o Renewables are seen to be key for electricity generation. Cost

effectiveness is dependant on scenario assumptions. o Nuclear seen as an option that needs to be kept in mind as a

carbon neutral generation source. • Carbon emissions are estimated for each scenario and are further

segmented into heat, power and transport categories. o Substantial emission reduction is only achieved in the GS and LS

scenarios. o Transport identified as a particular problem area, hydrogen seen as

key to solving the fuel issue.

Key points from the medium-term analyses:

• Declining trends in energy demand for heating are likely to continue • Growth in electricity demand may also be modest if efficiency policies are

pursued with vigor. • Oil remains dominant for transport (UK importing 80% of demand) • Gas dominant for heating (UK importing 80% of demand) • 25-50GW of new electricity generation required • Types of generation build quantified for 2020. CCGT dominant.

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Network specific issues: Some general conclusions were reached on requirements for future networks; however these were limited to high level themes that identified areas to be addressed by energy policy. The main conclusions with regards to the electricity network were:

• The scale of power generation is likely to fall (e.g. Renewables/CHP) • Major increases in the connection of embedded generators. • Investment required in transmission network – particularly for offshore

renewable generation and European interconnection. • Microgeneration via fuel cells and photovoltaics is likely with scale

depending on scenario. • Early action on grid investment, connection, regulation and pricing will be

needed

2.4.2 Analysis This PIU report provides a good example of how an existing set of high level scenarios can be used to assist analysis and planning within a new body of work. Rather than creating a new set of scenarios the PIU have judged that the DTI scenarios provide a sufficient spectrum of economic, political and social alternatives. By further analysing and quantifying the impact of alternate futures on their own areas of focus, the authors have been able to produce a set of demand and supply assumptions that meet the needs of their strategic review. As their focus was not purely on the electricity network, no great detail is provided on future network requirements. However there are relevant lessons for LENS in the use of inputs, the themes identified and the quantified levels of supply and demand calculated.

2.5 The Changing Climate (RCEP, Jun 2000) The primary focus of the Royal Commission on Environmental Pollution (RCEP) [6] work was climate change and in particular an investigation of means of reducing CO2 emissions. The early sections of the report cover the causes and effects of climate change, the UK’s current position, possible preventative measures and quantification of the scale of the challenge. The overall recommendation is that a global policy of contraction and convergence needs to be adopted to tackle climate change. This would see all nations converging on an equal relative quantity of CO2 emissions followed by a period global emission

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reduction. Assuming this approach this approach as a given allowed the authors to set a likely target of a 60% reduction in UK CO2 emissions by 2050. Taking this requirement as a starting point, four scenarios were created that allowed the authors to study alternative future paths and consider what impacts they would have on the environment in other respects, certain common difficulties they present and their relative cost. The following approach was taken in creating the scenarios. Energy demand in 2050 was specified in terms of four end uses:

1. low-grade heat 2. electricity 3. high-grade heat 4. propulsion for transport.

For each of the five major sectors of the economy (industry, transport, domestic, commercial and public services, and other) estimates were made of the proportions of the total energy demand currently represented by each end use. A three stage iterative process was then followed to create each scenario:

Stage1: a preferred energy source was allocated to each of the specified end uses Stage 2: shortfalls or surpluses in annual supply for each end use were reallocated, with electricity making up residual shortfalls in the supply of energy for end use in other energy forms Stage 3: Estimates were made of the shortfall in projected generating plant. Fossil fuel back-up requirements were then calculated.

2.5.1 RCEP Scenario 1 The distinctive feature of this scenario is a higher demand for energy than in the other three scenarios: final demand in 2050 remains at the 1998 level in all four categories (low-grade and high-grade heat, transport, electricity). This long-term stabilisation of energy demand is brought about by steady growth offset by increasing efficiency. A key assumption is the widespread use of fuel cells for road vehicles. The conclusion reached was that to meet this level of demand and also reduce emissions by 60% requires either a contribution from nuclear power that is more than four times as large as at present or an equivalent contribution from fossil fuel stations at which carbon dioxide is recovered. It also

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requires the largest contribution in any of the scenarios from renewable sources, a more than 20-fold increase from the year 2000 capacity of about 2.3 GW. Because the requirements for transport, high-grade heat and back-up plants pre-empt the fossil fuels available, most of the demand for low-grade heat in this scenario has to be met by electricity, half of that through use of heat pumps. Key features:

• 200 offshore wind farms with 100 turbines each. • 7500 tidal generation devices. • Severn Estuary Barrage. • Extensive photovoltaic panel use on domestic buildings. • 65 times the onshore wind generation capacity • Required nuclear capacity is 45 times the size of Sizewell B. • Potentially thousands of Biomass fuelled CHP plants. • 15% of UK farmland devoted to energy crops.

2.5.2 RCEP Scenario 2 This scenario sees an overall reduction in final demand to 36% below the 1998 level. This is achieved by a sustained and vigorous implementation of a full range of environmental focused policies discussed in the earlier sections of the report. The real price of energy would have been raised gradually but substantially through taxation, with much of the revenues spent on supporting energy efficiency improvements. Growth in road traffic and air travel would have stabilized in the early decades of the century and then fallen slightly. As in the first scenario, fuel cells have replaced the internal combustion engine in road vehicles. The lower level of energy demand is met by a combination of renewable sources and fossil fuels, without any use of either nuclear power or recovery and disposal of carbon dioxide. The 60% target requires a 20-fold increase, to 45 GW, in the energy obtained from renewable sources. The installations required and their environmental impacts are for most sources the same as in scenario 1, and the same area of land is required for growing energy crops. There are only half as many onshore wind turbines as in scenario 1 and only half as much electricity is obtained from photovoltaics.

2.5.3 RCEP Scenario 3 Using the same energy demand assumption as the previous scenario we again have an overall reduction in final demand to 36% below the 1998 level. A similar amount of energy in total is supplied by a smaller portfolio of renewable sources

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and the equivalent of 19 Sizewell B nuclear power stations (or alternatively a similar number of fossil fuel power stations of similar size with equipment for recovering carbon dioxide and transferring it to underground strata). There is no Severn Barrage, and sharply reduced contributions from the onshore renewable sources that would have the most obvious visual impact. Electricity and heat obtained from energy crops total less than 2 GW, and only about 2% of UK farmland would be required for energy crops.

2.5.4 RCEP Scenario 4 This scenario considers an even larger reduction in final demand for energy over the next half century. It is assumed that the requirement for low-grade heat has been reduced to one-third the present level by 2050 and the requirements for energy in other forms to two-thirds of the present level. That represents an overall reduction of 47% in final demand from the 1997 level. There is no nuclear power in this scenario, nor recovery and disposal of carbon dioxide. It is assumed that a Severn Barrage has been constructed and wave power and tidal streams contribute the same amounts of energy as in the other scenarios. The outputs from energy crops and photovoltaic panels, and therefore the associated environmental impacts, are at the same modest levels as in scenario 3. For onshore and offshore wind the contributions are half those incorporated in scenario 1. Indicative electricity generation capacity for 2050 (stated as average GW output throughout the year) for each of the four scenarios is presented in Table 2 below.

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Table 2: 2050 energy outputs under the four scenarios (annual average rate GW)

2.5.5 Analysis As a report focusing on climate change with the predefined target of reducing carbon emissions by 60%, RCEP naturally focuses on the energy market as a whole and the high use of fossil fuels to satisfy transport and heating demands. The scenarios are used to estimate the amount of total energy demand and then analyse the electricity generation mix and capacity required in each case. As a result of this focus on generation type there is very little detail on the impacts on future networks. However, the high levels of renewable generation in each case do prompt some observations on network demands. It is noted that the scale and location of renewable generation will require networks that can cope with high levels of embedded generation. Transmission networks are highlighted as an area of concern due to lack of capacity from likely generation sources to urban load centres. It is also noted that microgeneration is likely to become widespread with associated implications on the network. This report provides a valuable example of a targetive approach to scenarios since the 60% carbon reduction target is the main theme. It is noticeable that the scenario descriptions start with an assumed level of demand rather than a consideration of economic, political and social circumstances that result in a particular demand profile. Essentially this type of scenario work takes one focussed target as its input rather than a set of descriptive and more diverse inputs. The target is the important element and the scenarios only consider futures where this can be achieved. From a LENS perspective it is useful to be aware of this technique when considering the approach to scenarios. In addition, the range of envisioned demand and the mix and capacity of generation provide a relevant reference point for the LENS project.

2.6 UK Electricity Scenarios for 2050 (Tyndall Centre, Nov 2003)

2.6.1 Scenarios This Tyndall Centre [7] scenario work builds on the RCEP scenarios (see section 2.5 above). It elaborates on the four scenarios and applies them to the UK electricity sector. The detailed analysis establishes electricity generating plant capacities, load factors and annual outputs for each scenario. This report was part of a wider Tyndall Centre project on the security of decarbonised electricity systems. The RCEP scenarios with their 60% emissions reduction target were

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chosen specifically because of their focus on carbon. This allowed the authors to create a set of electricity sector specific scenarios with a common theme of reduced carbon emissions. From the above RCEP data on energy outputs the authors calculated generation capacity and the number of generating units. Table 3, reproduced directly from the Tyndall Centre report, summarises the number of generating units of each technology in each scenario.

Table 3: Numbers of generating plant in RCEP scenarios

To arrive at capacity figures for each technology, assumptions were made on appropriate levels of load factor for each technology. For example, for medium and large scale CHP, a load factor of 0.6 was used since this was the prevailing average for UK CHP plants. For micro-CHP, an initial load factor of 0.28 was taken from equipment supplier data Using that generation capacity data, generation production data (in energy terms) per technology under each scenario was produced. Again, Table 4 has been taken directly from the Tyndall report.

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Table 4: Electricity generation implied by the RCEP scenarios (TWh)

The main features noted by the authors from this analysis of the RCEP scenarios were:

• A shift in the role of fossil fuel electricity generation – away from base load or mid-range duty, and towards backup for intermittent renewables.

• In two scenarios, a significant expansion of nuclear power (or fossil fuel stations with carbon sequestration).

• Significant action to halt or reverse growth in energy demand, which implies large improvements in energy efficiency.

• In some scenarios, very large mismatches between electricity generation and electricity demand. This is explained by the use of electricity to provide substantial amounts of high and low grade heat.

• No link between the expanded use of renewables to generate electricity and the production of hydrogen. All hydrogen within the scenarios is produced from fossil fuels.

2.6.2 Analysis As this report does not expand on the scope of the RCEP report there are no further details on network impact or directly relevant lessons on the use of scenarios. The main benefit of this report is the focus on the electricity generation aspects of the RCEP report. The data produced provides a clear representation of the amount of electricity generation in TWh, the number of generating units and the assumed load factor allowing accurate comparison of RCEP with other scenario work. This data will serve as a useful reference point for the LENS scenarios.

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2.7 Decarbonising the UK (Tyndall Centre, Sep 2005) This comprehensive report [8] contains the principal findings of a five-year program of research that set out to ‘explore a range of technical, managerial and behavioural options for reconciling a vibrant UK society with a true 60% reduction in carbon emissions by 2050’. A key element of this work has been to incorporate demand sectors which had not, to date, been explicitly included in UK energy scenarios, namely international marine and aviation transport. As a result, this report is multi-faceted, dealing with the whole energy market and in particular the role of fossil fuels for transportation. The methodology used to generate scenarios was a three stage process employing the ‘back-casting’ technique as follows:

Stage 1: Defining a set of end-points based on a 60% reduction in CO2 emissions. Stage 2: Back-casting to articulate alternative pathways to the 60% reduction in CO2 emissions. Stage 3: Multi-criteria assessment exercise exploring the trade-offs which are implicit in alternative means of achieving the target.

To define the range within which the scenarios would be developed the project team chose a low energy consumption future (90 Mtoe), a high energy consumption future (330 Mtoe) and two medium levels (130 and 200 Mtoe). Initially eight end-point scenarios, two of each of the four different levels of energy consumption, were developed. A subsequent review process including a stakeholder workshop refined the selection to four end-point scenarios. A further ‘backcasting’ workshop with a different set of stakeholders mapped out the pathways to each end-point resulting in the finalized versions of the scenarios. During this process additional key themes were identified and a fifth scenario defined. The resulting scenarios were given neutral descriptors: Red, Blue, Turquoise, Purple and Pink and these are reviewed below.

2.7.1 Red Scenario

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The Red Scenario is a high economic growth and low energy demand scenario in which the level of economic growth is slightly greater than today. Extensive energy demand reduction is combined with a high rate of technological innovation in sustainable energy technologies (especially for demand management and reduction). Energy consumption in the home has more than halved through regulating the energy consumption of appliances and stringent building energy standards. Carbon capture and storage is strongly promoted and by 2020 CCS Obligation Certificates have been implemented. From 2015 hydrogen becomes seen as a key energy carrier. By 2030 there are significant amounts of hydrogen production via coal (CCS) and renewables. Headline electricity demand and supply data is illustrated in Figure 3 below.

Figure 3: Red Scenario Electricity Supply Characteristics 2

2.7.2 Blue Scenario The Blue Scenario is a modest economic growth and modest energy demand scenario in which the contribution to national wealth of the commercial sector is almost matched by the expansion of the public sector. Politically, a strong central government establishes targets and policy goals, but instructs appropriate tiers of local and regional government, or other accountable bodies, to develop the means for meeting or implementing them.

2 46 Mtoe = 488.46 TWh

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Reductions in energy consumption across the built environment, for both users and the fabric of buildings themselves, have been enabled by the emergence of Energy Service Companies. ESCOs aim to achieve long-term improvements in energy performance and carbon reduction targets and are regulated by an independent regulator. Hydrogen is promoted as a transport fuel within niche markets. Energy utilities have been complemented by, or even restructured within, an ESCOs framework. This is facilitated by the implementation of CHP at the neighbourhood scale (new build and retro-fitted) in most urban areas. Headline electricity demand and supply data is illustrated in Figure 4 below.

Figure 4: Blue Scenario Electricity Supply Characteristics3

2.7.3 Turquoise Scenario The Turquoise Scenario is a medium economic growth, medium energy demand scenario with the economy growing at a rate similar to that of today. Decarbonisation has been achieved through a mix of efficient, end use technologies/practices and low-carbon supply options with measures implemented through a governance system similar to that of today. Hydrogen is widely used as a road transport fuel and in the aviation sector. The nuclear industry is supported financially through the introduction of favourable financial instruments (e.g. a carbon tax). Between 2015 and 2040, one nuclear station is built per year, beginning with existing sites, resulting in a total of 25 by 2050. By 2015, central government establishes a renewable fuels obligation on fuel distributors and by 2030, decentralised biofuel stations are widespread. By 2015, the success of pilot demonstration plants has encouraged investment by

3 53 Mtoe = 616.39 TWh

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the energy industry to fund several large coal-fired and gas-fired power stations with CO2 capture equipment and pipeline infrastructure to off-shore storage sites. The build programme for carbon capture power plant continues to 2040. Headline electricity demand and supply data is illustrated in Figure 5 below.

Figure 5: Turquoise Scenario Electricity Supply Characteristics4

2.7.4 Purple Scenario The Purple Scenario is a high economic growth, high demand supply scenario. By 2050 the economy is over six times larger than today and energy consumption is approximately twice the current level. The UK has a vibrant and innovative market economy with a relatively small but supportive and market-oriented government. The drive towards a low carbon society arises from international obligations and the increasing concern within energy markets over the insecurity of imported fossil fuels. Initially, biofuels were substituted for fossil fuels in the land transport sector, though this is being substituted for hydrogen as fuel cell technologies diffuse. Electricity is used for trains and urban public transport. Oil use is concentrated on the aviation sector as hydrogen as an aviation fuel has not been fully developed. Consumers have continued to increase their energy consumption hence carbon reductions are implemented though significant improvements in end-use efficiency and very substantial

4 92 Mtoe = 1069.96 TWh

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decarbonisation of the energy supply system. Private energy companies have made large-scale investments in new nuclear and renewable generating plant. The intermittency of renewables is partially compensated through the use of hydrogen production to smooth electrical supply output and through more sophisticated metering and tariff arrangements. By 2050 the UK energy system is dominated by electricity from numerous and relatively small nuclear power plants alongside a range of renewable energy sources and technologies. Headline electricity demand and supply data is illustrated in Figure 6 below.

Figure 6: Purple Scenario Electricity Supply Characteristics5

2.7.5 Pink Scenario The pink scenario was developed to demonstrate a high consumption future without high reliance on nuclear generation. The economic and demand characteristics are identical to the purple scenario. In this case dominant fossil fuel companies reject the idea of a hydrogen economy due to the slow pace of R&D and instead invest heavily in CCS for electricity production. Between 2010 and 2020 all the major storage sites are identified, with new coal and gas power stations under construction in the vicinity. The construction of a new major gas pipeline from Russia is also complete and by 2030 the fossil fuel industry is booming with coal imports at an all-time high. Headline electricity demand and supply data is illustrated in Figure 7 below. 5 172 Mtoe = 2000 TWh

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Figure 7: Pink Scenario Electricity Supply Characteristics6

2.7.6 Analysis As this set of Tyndall scenarios was created to integrate the findings from a wide range of ‘decarbonisation’ projects, the resulting scenario descriptions cover the entire energy market with information on a comprehensive range of demand sectors covering household, industry, aviation, transport, shipping and the energy industry among others. Although electricity plays a key a role in these scenarios the information provided for electricity is limited to the demand and generation characteristics. The implications of these characteristics for the transmission and distribution networks are not detailed within the scenario descriptions. Elsewhere in the report topics such as: Integrating Renewables and CHP into the UK Electricity System, Security of decarbonised electricity systems, Fuel Cells and Microgrids cover issues relevant to electricity networks. However, these sections provide in-depth analysis of particular issues outwith the context of the scenarios and are not directly relevant to the creation and application of scenarios. The methodology used by Tyndall Centre is worth particular note as it attempts ‘to investigate less constrained approaches to scenario development than the

6 196 Mtoe = 2279.5 TWh

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ubiquitous twin axes structure that informs the majority of the current energy scenarios’. The reasoning here is that the twin axes do not provide enough scope for the complexities of the real world and ‘over polarize’ the scenarios. This point is worthy of careful consideration when selecting the LENS inputs themes. Another useful output from this report is the detail on predicted levels of growth in electricity demand and the resulting generation mix. Some scenarios see huge levels of growth in demand as electricity becomes the primary fuel for transport and heating. This provides a very different perspective on future demand from previous studies and significantly expands the range that needs to be considered when defining the demand characteristics of the LENS inputs.

2.8 Additional scenario work In addition to the seven major reports reviewed in the previous sections there are additional related publications that are relevant inputs at this stage of the LENS project. These publications provide a useful reference resource and perspective on scenario use in their own right. However it was felt that a full review of the scenario techniques employed and outputs generated would not significantly add to the information gathered in sections 2.1 to 2.7.

2.8.1 Energy Markets Outlook (BERR/Ofgem Oct 2007) The recent Energy Markets Outlook (EMO) report [9] is essentially a medium term risk and opportunity analysis for the UK energy market covering the main topics: Electricity, Gas, Coal, Oil, Nuclear, Renewables and Carbon. The main area of interest to LENS is the Electricity section which uses National Grid data to analyse medium term supply and demand. Within the Electricity section scenarios are used in a limited form to study the generation effective capacity margin. The scenarios use data on the current and planned generation capacity and are differentiated by one main driver – the regulatory approach to carbon. This driver is used to produce 3 scenarios with differing rates of plant closure and build, hence producing a range of possible capacity margins in the medium term. Whilst the use of scenarios in the EMO report adds little to the information gathered from the main review of scenarios in previous sections of this report, the projected ranges of supply and demand provide a useful reference point for the LENS project. The reasons for the divergent outcomes for generation capacity are also useful inputs to the range of issues to be covered in the LENS project.

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2.8.2 Decentralising UK Energy (Greenpeace/WADE Mar 2006) The ‘Decentralising UK Energy’ report from Greenpeace [10] has the primary aim of comparing centralised and decentralised UK energy systems over the next 20 years. It should be noted that the term energy here relates to electricity generation. The report uses scenarios to describe four main alternative futures that can be assigned a capital cost and a CO2 emissions level. The scenarios are differentiated by centralised or decentralised generation and level of CO2 reduction. This is not an example of scenario planning where high-level qualitative scenarios are used to cover a wide range of eventualities and allow the impact of diverse futures to be explored. The scenarios are used to define two alternative paths and provide detailed analysis to conclude the optimum route. As such, the scenarios are used in a different context and for a different purpose than in the LENS project. The projected generation mix alternatives of centralised, de-centralised, nuclear, fossil fuel and renewables are similar to those contained in the previously reviewed scenarios reports and serve to confirm feasible combinations of supply and demand that should be considered by LENS.

2.8.3 The Role of Electricity (Eurelectric Jun 2007) The Eurelectric report on the future role of electricity [11] is a pan-European study of the energy market that explored the role of electricity in addressing the triple challenge of making substantial reductions in emissions of greenhouse gases while ensuring a secure supply of energy, all at reasonable cost to the economy. Four scenarios were developed using market economics, industry structure, energy/environmental policies and regulation as main input themes. The scenarios were then quantified using two economic models – PRIMES and Prometheus. The four scenarios were: A baseline scenario, a scenario focusing on demand side efficiency, a scenario covering nuclear renaissance and carbon capture and a final scenario entitled ‘The role of electricity’ which combined scenarios two and three. The main point of interest to LENS is the supply and demand projections from a European perspective which provide a useful reference point when considering possible UK supply and demand projections and profiles. Demand has been studied in great detail, covering sectors such as: crude steel, chemical industry, residential appliances and automotive transport amongst many others. This

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provides a valuable level of detail on the underlying influences on demand that is not provided in any other previously reviewed scenarios reports. The use of economic models to quantify the scenarios is interesting as this is the approach being adopted in the LENS project by using the MARKAL-MACRO economic model to quantify the initial scenarios identified.

2.8.4 Electric Power Industry Technology Reports (EPRI 2005) This EPRI report [12] looks at 2020 scenarios for the US power industry. The scenarios were built on two key dimensions of change: the evolution of primary fuel markets (in particular the natural gas market that feeds the power sector) and changes in societal values (particularly in relation to CO2 emissions). The resulting scenarios were entitled: ‘Digging in our heels’, ‘Supply to the rescue’, ‘Double whammy’ and ‘Biting the bullet’. The scenario narratives take a familiar form, describing the economic, social and environmental circumstances, and then drawing conclusions on the potential impacts on the US power industry. The main value of this report as a LENS project input is to demonstrate the common issues that are deemed to influence the development of power networks in the UK and US and a commonality in the approach of this US scenario initiative to the previously reviewed UK focused scenario reports.

2.8.5 Using energy scenarios to explore alternative energy pathways in California (Energy Policy Vol33 Jun 2005)

This academic journal paper considers energy scenarios specific to California in light of the 2001 energy crisis [13]. Four exploratory narratives describe the scenario context and provide the basis for quantitative modeling to analyze potential outcomes. A business as usual scenario represents a continuation of the current situation. Three alternative scenarios represent contexts where clean energy plays a greater role in California's energy system: ‘Split Public’ is driven by local and individual activities; ‘Golden State’ gives importance to integrated state planning; ‘Patriotic Energy’ represents a national drive to increase energy independence. Although the scenario titles demonstrate a focus on government policy and public attitude as main drivers of change, the narratives also include technical and economic considerations. A modeling tool was used to produce demand, generation and emissions profiles for each scenario. The introductory sections of this paper provide some excellent background and justification for scenario development and application, referencing many of the

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landmark scenario publications and authors. This provides additional justification for the process of scenario development being used in the LENS project. The issues and scenario outcomes also provide a good international reference point for the LENS scenarios.

2.8.6 World Transport Scenarios (Tyndall Apr 2005) In this report the Tyndall Centre produce six world transport scenarios in order to study future transport activity and emissions up to year 2100 [14]. The scenarios used were an amalgamation of existing IPCC and GSG climate change scenarios. The scenario narratives are a high level description of economic, political, cultural and social circumstances on a global level. These are used to make projections on likely transport technology and activity. An interesting point is the focus on population patterns as a primary influence. From a LENS perspective it is interesting to see how some elements of a high level scenario description can be focused on and used to estimate trends within a particular sector. Here the focus is on population patterns and transport demand, however this is of course related to overall energy demand and hence electricity demand. The trends in demographics and people behaviour trends will prove useful in hypothesizing about consumer activities in future and this will be useful for the LENS project.

2.9 Analysis of the Major Scenario Reports The key elements that shape a set of scenarios are the driving forces used to define the external circumstances and differentiate between scenarios. These drivers provide the boundaries within which the scenario can be defined. From the preceding review of the major scenario reports the main drivers behind each set of scenarios are identified and collated in Table 5.

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Table 5 – Summary of scenario drivers

Common elements have clearly emerged among the drivers used to create scenarios for the energy market in the reference material assessed. Whether the scenario work is exploratory or targetive, themes such as:

• economic growth • government policy • environmental attitudes • level of demand

Title Method Scenario Inputs

Supergen 2050 Exploratory Economic

Growth Environmental

Attitudes

Political and Regulatory Attitudes

Technological Growth

Supergen 2020 Exploratory Economic

Growth Environmental

Focus Regulatory Structure

Technological Growth

Social Values DTI

Foresight Exploratory Economic Activity Consumption

Governance Systems

Social Values PIU Energy

Review Exploratory Economic Activity Consumption

Governance Systems

RCEP Energy Review

Targetive - 60% CO2 emissions reduction

Energy Demand CO2 Emmissions

Tyndall 2050


Energy Demand CO2 Emmissions

Tyndall Decarbon-

ising the UK


Economic Growth

Energy Demand

CO2 Emissions

Governance Systems Social Values

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are commonly used to differentiate between scenarios. Either through the use of models or informed assumptions, the scenario authors will place certain values on these themes and explore their effect on the energy or electricity market. This then allows the production of either qualitative or quantitative estimates of the supply and demand characteristics appropriate to each scenario. Although no two scenarios can be said to be identical there are some that display common elements. For example, the Supergen ‘strong optimism’ and Tyndall ‘Purple’ scenarios share high economic growth, high energy/electricity demand, liberal government policy and strong development of renewable generation. Contrastingly, the Supergen ‘economic downturn’ and PIU ‘provincial enterprise’ scenarios share low growth, stable or slightly reduced electricity demand and a focus on fossil fuel. The following tables (6 and 7) have been produced to collate key elements from each set of scenarios and allow comparison at a high level. Detailed comparison is difficult as the methods employed, sources of data utilised and themes addressed differ between scenarios. However, the tables below allow some valuable information to be extracted.

Title Scenario Economic Growth

Political Approach

Energy Demand

Environmental Attitudes

Strong Optimism High Liberal Strongly increased Stronger

Business as Usual Stable Liberal Strongly

increased As current

Economic Downturn Low Liberal Reduced Weaker

Geen Plus Stable Liberal with

environmental incentives

Increased Much stronger

Technological Restriction High Liberal Strongly

increased Stronger

Supergen 2050

Central Direction Stable Interventionist Increased Stronger Continuing Prosperity High Liberal Strongly

increased Stronger

Economic Concern Low Liberal Increased Weaker

Environmental Awakening Stable

Liberal with environmental

incentives Increased Stronger

Supergen 2020

Supportive Regulation Stable Mildly

Interventionist Strongly

increased Stronger

World Markets High Liberal Increased Weaker DTI Foresight Provincial

Enterprise Low Protectionist As current Weaker

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Title Scenario Economic Growth

Political Approach

Energy Demand

Environmental Attitudes

Global Sustainability High Liberal As current Much stronger

Local Stewardship Low Devolved Reduced Stronger

World Markets High Liberal Strongly increased Weaker

Provincial Enterprise Low Protectionist Increased Weaker

Global Sustainability High Liberal Reduced Much stronger

Local Stewardship Low Devolved Strongly

Reduced Stronger

PIU Energy Review

Business as Usual Stable Liberal As current As Current

Scenario 1 undefined undefined As current Stronger

Scenario 2 undefined undefined Reduced Stronger


RCEP Energy Review

Scenario 4 undefined undefined Strongly Reduced Stronger

Scenario 1 undefined undefined As current Stronger


Scenario 3 undefined undefined Reduced Stronger Tyndall 2050

Scenario 4 undefined undefined Strongly Reduced Stronger

Red High Liberal Strongly Reduced Stronger

Blue Modest Centralized Reduced Stronger Turquoise medium Liberal High Stronger

Purple High Liberal Strongly increased Stronger

Tyndall Decarbon-ising the

UK

Pink High Liberal Strongly increased Stronger

Table 6 - Scenario Themes Input Variables

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Generation split

Title Scenario Electricity Demand **

Renewables Generation

Fossil Fuel Generation

Nuclear Generation

Micro- Generation

Strong Optimism 173% 52% 7% 7% 34% Business as

Usual 156% 34% 42% 5% 19% Economic Downturn 79% 16% 75% 0% 9% Geen Plus 112% 81% 0% 0% 19%

Technological Restriction 196% 40% 40% 0% 20%

Supergen 2050

Central Direction 124% 55% 20% 5% 20% Continuing Prosperity 120% 19% 67% 11% 3% Economic Concern 104% 15% 73% 12% 0%

Environmental Awakening 104% 25% 59% 11% 5%

Supergen 2020

Supportive Regulation 120% 21% 61% 18% 0%

World Markets Strong Growth Limited Dominant Limited Fossil fuel CHP

Provincial Enterprise

Slight Growth Limited Dominant Existing Plant

extended Some fossil fuel

CHP Global

Sustainability Slight growth Dominant CCS and CCGT Limited Fossil fuel CHP

DTI Foresight

Local Stewardship Reduced Extensive limited Limited Fossil fuel CHP

World Markets Strong Growth

6GW new build*

36GW new CCGT build* 12GW CHP new

build*

Provincial Enterprise

Slight Growth

4GW new build*

17GW new coal build 8GW

new CCGT build *

9GW new build*

8GW CHP new build*

Global Sustainability Slight growth 13GW new

build* 19GW CHP new build*

Local Stewardship Reduced 8GW new

build* 13GW new build*

PIU Energy Review

Business as Usual As current 6GW new

build* 32GW new

CCGT build* 10GW CHP new build*

Scenario 1 As current 39% 13% 48% 0%

Scenario 2 75% 73% 25% 0% 2%

Scenario 3 75% 40% 19% 39% 2%

RCEP Energy Review

Scenario 4 67% 62% 33% 0% 5% Scenario 1 As current 27% 62% 0% 11% Scenario 2 75% 73% 25% 0% 2% Scenario 3 75% 40% 19% 39% 2%

Tyndall 2050

Scenario 4 67% 62% 33% 0% 5%

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Red 144% 27% 62% 0% 11% Blue 166% 7% 46% 11% 36%

Turquoise 287% 18% 40% 18% 24% Purple 537% 46% 0% 31% 23%

Tyndall

Decarbon-ising the

UK Pink 613% 24% 43% 12% 21%

* By 2020 ** In comparison with current levels.

Table 7- Scenario Outputs

From Table 6 we can see that the existing body of scenarios employs a full range of values across four key input variables (or themes for those scenario initiatives).

• Economic growth ranges from low, through stable, to high growth. • Political approach is mainly based on liberal markets with only some

scenarios employing strong Government direction. In most cases little indication is given of what government takes direct action (local, national, international)

• Energy demand levels range from strongly reduced to strongly increased in comparison to current levels. The exploratory scenarios tend to contain increased demand relative to economic growth whereas the targetive scenarios tend to relate reduced emissions to decreased demand.

• Environmental attitudes in comparison to current levels range from weaker to much stronger and the targetive scenarios imply a general trend to stronger environmental attitudes.

The calculated levels of supply and demand summarised in Table 7 show the following.

• Electricity demand ranges from 67% to 613% of current levels. This range encompasses scenarios that possess reduced energy demand and high efficiency to scenarios with high energy demand and increased use of electricity across all sectors.

• The contribution of renewables ranges from 7% to 81% of supplies. Factors such as environmental attitudes and the level of investment and technological development available tend to influence these results.

• The contribution of fossil fuels ranges from 0% to 75% of supplies and tends to be influenced by environmental attitudes and the availability of carbon capture technology.

• The contribution of nuclear energy ranges from 0% to 48% of supplies usually depending on the perceived need for non-fossil fuel, stable base load generation.

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• The contribution of microgeneration ranges from 0% to 36% of supplies and is often interlinked with the ability of the network to cope with distributed generation.

These findings will support the process of identifying the key themes for the LENS project scenarios and the specific data will provide a useful reference point for the scenarios and the modelling work in the LENS project.

2.10 Potential Inputs from Recent Scenarios Initiatives The analysis above shows that four main themes were present in many of the scenarios activities, namely:

• Economic Growth • Political Approach • Energy Demand • Environmental Attitudes

These were the high level themes used to shape the storylines of the scenarios and draw conclusions relating to the supply and demand characteristics of those scenarios. Depending on the focus of the scenario activities further conclusions are drawn with varying degrees of detail on certain areas of the energy industry (e.g. carbon emissions, networks). There were also more network specific focus points within each set of scenarios and these are summarised in table 7. The network specific issues from each scenarios activity are listed and commonality identified by the cell colouring (scenario work with no specific network conclusions are omitted). Under the title of each scenario report the issues are listed vertically. The order of each list was manipulated to position common issues adjacently wherever possible and the cells coloured horizontally to highlight the similarities.

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Supergen 2050 Supergen 2020 DTI foresight PIU Energy review

Tyndall Decarbonising

the UK

International Interconnectors

Shortfall in knowledge and

technology Energy Service

companies

Bulk Transmission North – South Rural – Urban

Upgrading of Transmission

Network

Network stability

concerns

Investment required in

transmission network

Electricity for transport

Network Undergrounding Undergrounding

Increased generation efficiency

Nuclear

Superconductors HVDC

Off shore Transmission

HVDC link North - South

Scale of generation likely

to fall

Fossil Fuels with CCS

Local Generation

Renewables connected to Distribution

network

Distributed generation

Increased embedded generation

Renewable connection in

remote location

Microgrids Microgrids Microgeneration Microgrids

FACTS Smart metering Fuel Cells

Demand side participation

Demand side management CHP

Energy Storage Energy Storage Condition Monitoring Life extension

Asset Management

Advanced Protection and

Control

Power electronic compensation and

flow control

Advanced control systems

Table 7 – Network specific issues from relevant existing scenarios

By assimilating the common issues under one title and collating these with the stand alone issues, the tabulated data can be summarised by the following list of potential (network specific) inputs for the LENS project:

• International interconnection • Transmission network topology • Level of undergrounding required • Use of superconductors • Level of local/distributed generation deployed • Level of microgrid development • Level of demand side participation (smart metering) • Amount of energy storage deployed

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• Requirement for advanced protection and control • Use of FACTS technology • Shortfall in knowledge and technology • Energy service companies • Generation mix

This list now provides a concise set of network specific issues covered in the existing literature on scenarios reviewed in this section. The level of detail in which these issues are addressed varies greatly between publications with the Supergen work perhaps providing the most detail. None of the reviewed publications focus specifically on the network and where network specific issues are identified they are described at a high level or simply stated as an implication of the generation and demand mix. Even the comparative detail of the Supergen work is limited to identifying basic transmission requirements and likely network technologies that will be important in particular scenarios. Therefore this list highlights network specific issues that could be considered in substantially greater detail than in the previous literature and could be used to develop scenarios with a specific network focus. The high level themes and network specific issues identified in this section have been used along with other potential inputs in section 3 in order to develop the proposed inputs for LENS scenarios in section 4.

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3 Review of LENS Consultation and ENSG Horizon Scanning

As set out in the LENS methodology publication of 12 November 2007, stakeholder contributions are one of the key sources in the information gathering process. In section 3.1 the results of the LENS consultation are described based on the academic team’s interpretation of the responses. This interpretation is based on the analysis described in the appendix. The separately published Ofgem summary of responses to the open letter of 15 June 2007 and the Ofgem summary of the 17 August 2007 workshop provide additional detail on the consultation process. Section 3.2 reviews the recent ENSG Horizon Scanning work and section 3.3 identifies and summarises the potential inputs from sections 3.1 and 3.2.

3.1 LENS Consultation This section outlines stakeholder contributions to the LENS scenario development activities resulting from the Ofgem open letter of 15 June 2007 and subsequent workshop of 17 August 2007. Analysis of these contributions is provided by way of first collating all responses and then grouping the emerging issues under logical headings (this is done in the appendix). At that stage the resolution of all the issues at a low level is lost in the push towards identifying the themes from the contributions that will be classed as potential inputs for the LENS project. However, the detailed issues will be used extensively again both at the stage of identifying the initial scenarios and then again in the writing of the scenario narratives where context richness is provided by a full description of the scenario themes using the underlying detailed issues. So a set of potential LENS inputs has been identified by the logical grouping of issues from the LENS project consultation and these have then been analysed along with the potential inputs identified in other sections of this report (i.e. other relevant scenarios work and the activities of the ENSG Horizon Scanning projects under the Distribution and Transmission Working Groups) in order to develop proposed inputs for the LENS scenario development process in section 4. It is noted that where possible the terminology used to describe the issues by consultation and workshop participants has been retained. The process of expanding, collating and describing issues in this report did require some changes in terminology but we have aimed to capture all consultation responses received by written communication and by presentation and verbal input at the

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workshop. Written responses were received from consumer representatives, large electricity consumers, energy consulting firms, energy trade associations, network companies and power generation trade associations.

3.1.1 Responses to Ofgem Open Letter of 15 June The key issues from the consultation response letters (detailed in the appendix) have been identified as follows:

• Customer expectations for security and quality of supply, and network performance – enhanced network performance through automation, design, security standards and advanced technology to meet potentially greater customer expectations for service level.

• Resources and skills requirements – human resource availability, education and training.

• Technological development in networks and on the customer side – advanced technologies availability on the network and consumer side including smart metering, new consumer appliances, active network management technology, power electronics, superconductivity, energy storage and analysis and planning techniques.

• Planning frameworks - local authority regional and national planning, framework for network development and also demand and generation development. Power system planning standards and processes.

• Political and legislative framework – environmental legislation, national and regional targets for energy generation and economic stimulation.

• Regulatory framework – pricing, incentives, stranded asset risks, network investment framework and returns.

• Demand growth and patterns of use – patterns of electricity usage, new demands for electricity (e.g. transport), urban regeneration, climatic effects on demand (e.g. summer cooling demand peaks).

• Generation development and fuel mix – location, technology, decentralised generation, renewables development rate, aggregation for small scale generation, dependency on fuel input supply chains, hydrogen, nuclear fission and fusion and network access arrangements.

• Network resilience – resilience to climatic changes (e.g. severe winds, flooding, lightning and blizzards), terrorist activity and ageing assets.

• Health, safety and environmental pressures – public and personnel safety, electromagnetic fields, oil and gas insulation, disposal of network waste materials, visual amenity of circuits.

• Future role of power network businesses – sustainable/efficient networks, local/regional supply-demand balancing, Energy Service Companies and Distribution System Operator roles.

• International context – interconnectors, global markets for power plant and global standards for equipment.

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3.1.2 LENS Project Workshop of 17 August The contributions from the first LENS project workshop on 17 August 2007 have been analysed as well with the following issues identified:

• Global trends (e.g. power equipment) • Changing requirements on networks as a result of varied generation and

demand profiles. • EU and GB Government policy - degree and nature of government control • Environmental issues (including environmental impact of transmission and

distribution) • Commercial models for power sector businesses including finance (e.g.

cost of capital, investment) • Technical advances • Health & Safety • Impact of transport on electricity networks (mobile power generation in

form of fuel cells, charging of electric vehicles) • European networks (e.g. offshore grids and electricity storage) • Demand side participation (trading and balancing) • Communications for real time optimisation of power networks • Network design (including tapering of distribution networks on the basis of

assumption of one-way power flows) • Skills and resources requirements and availability • Customer behaviours - social trends, level of individualism • Growth in emerging markets • Generation - location, size, type, mixture of energy sources, distributed

generation, proximity of supply to demand • Demand – growth, responsiveness, impact on LV network, energy

efficiency incentives, seasonal load patterns • DNOs role – proactive, reactive • Quality of supply, security, resilience • Value of carbon - method of cost pass through • Other energy chains – heat, transport • Transitional issues - present status dictates possible transition pathways • Regulatory framework - innovation incentives, performance incentives

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3.2 Electricity Networks Strategy Group (ENSG) Horizon Scanning

The Electricity Networks Strategy Group (ENSG) Horizon Scanning projects led by the Distribution Working Group (DWG) and the Transmission Working Group (TWG) have been active in looking forward in time to understand the issues that are likely to affect power network development towards horizons of 2020 and 2050. To this end they have made use of the 2020 and 2050 scenarios developed by the EPSRC SuperGen FutureNet consortium. In addition, the ENSG Horizon Scanning projects have also looked to develop a list of significant issues for network development in those timescales. This list is categorised and has been used for reference in the LENS project to ensure that all significant issues are considered and the potential magnitude of their impact assessed and incorporated into LENS thinking. The ENSG scenarios work includes initial thoughts on solutions to the implications of future scenarios for networks but these are not addressed here in order to maintain a clear focus on factors ‘external’ 7to power networks. A brief additional explanation is provided for each issue as required. The main headings listed below (e.g. climate change, electricity demand, etc.) and stated directly from ENSG Horizon Scanning work have been carried forward to be considered alongside the potential inputs from the other main sources of information for the LENS project as presented in this report (i.e. review of relevant scenarios activities and LENS project consultation responses and workshop). These issues and themes that have been identified by the ENSG activities and describe the environment within which the GB electricity networks will be developed have been analysed alongside the other potential inputs in order to develop proposed inputs for the LENS scenario development process in section 4. The detailed issues listed in the thematic subsections will be incorporated into the draft scenarios once the main themes are identified and the initial set of LENS project scenarios emerges from the analysis of driving forces and themes.

3.2.1 Climate Change

• Summer peak demand from cooling loads in a warmer climate or flatter daily and seasonal profile

• Power network equipment rating reduction in warmer climate and changed soil moisture levels

7 The LENS methodology publication of 12 November 2007 explains what ‘external’ (and ‘internal’) mean in this context.

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• Increase in extreme weather events such as storms, flooding, lightning and drought

• Changes to power station locations as affected by climate change effects • Altered wind (and wave) seasonal profiles • Sea level rise leading to higher pumping loads and changes in demand

levels in some areas • Hydro generation seasonal profile and overall annual energy output

changes in wetter or drier climate

3.2.2 Electricity Demand

• Progress in use of demand side management including clearer differentiation between different load types and prevalence of responsive demand

• Municipalities self sufficient from electricity generation perspective • Differential security of supply demand from different customer groups • Local energy storage as heat or electricity • Progress in use of heat pumps • Domestic/commercial use of DC supply • Use of uninterruptible power supplies and batteries to secure loads • Changing demand patterns from different sectors of the economy such as

manufacturing, retail, server farms, home working and 24/7 cities • Volume and proportion of travel on electricity powered forms of transport

including trains, trams, electric buses and cars • Progress on energy efficiency in each sector of the economy including

building insulation • Requirement for desalination as climate change and demographic change

alters demands and supplies for water • Competition from other fuels such as natural gas

3.2.3 Electricity Generation and Fuel Sources

• Characteristics of future generation portfolios (energy from waste, bio-fuels, Severn Barrage, carbon capture and storage on fossil plant, heat and power mix, reliance on imported natural gas)

• Generation rating changes due to climate change • Predictability of generation output (esp. variable output renewables) • Flexibility on offer from generation portfolio (and flexibility required) • Energy storage on offer (and required) • Fossil and nuclear plant retirements with new plant developments leading

to changing import/export status of GB regions • Offshore component of future generation portfolio with requirement for

offshore grids

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• Synchronous and asynchronous plant mix leading to requirements for different system plant and operational measures

• Effects of environmental measures at the international (e.g. Large Combustion Plant Directive) and local level

3.2.4 Environment Background

• Development of carbon trading (mechanisms and prices) • Requirements for environmental assessments for both generation and

power network developments • Environmental regulations for use and disposal of hazardous materials

(e.g. oil and SF6) • Development of evidence base and regulations related to electro-magnetic

fields.

3.2.5 Politico-Economic Background

• Influence of international legislation and regulation (EU and wider) in all areas of power sector

• Role of devolved legislatures in setting policy in relation to energy and electricity matters

• Assumption of continuance of industry structure in terms of ownership, management, competition and regulation

• International situation of availability and costs of equipment and materials • Charges, taxes, incentives and penalties framework including cost

reflectivity, stability • Planning consent framework for generation and network developments • Mergers, acquisitions and divestments at national and international level • Moves towards cross border interconnection and especially GB

connectivity into EU transmission system (including Western European offshore grid developments)

• National security issues including terrorism and freedom/secrecy of information.

3.2.6 Skills and People

• Availability and costs of appropriately skilled staff at all levels • Personnel and public safety developments

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These lists and groups of issues correspond closely with those identified by participants in the LENS consultation. They will be discussed with the outcomes from the other main sections of this report in section 4.

3.3 Potential Inputs from LENS Consultation and ENSG Horizon Scanning

Sections 3.1 and 3.2 have summarised the main issues and themes from the LENS consultation responses and workshop and also the ENSG Horizon Scanning project. Tabulating the potential LENS inputs from each of these sources allows common potential inputs to be identified. For each input source the potential LENS inputs have been listed and commonality highlighted by cell colouring. The order of each list was manipulated to position common issues adjacently wherever possible and the cells coloured horizontally to highlight the similarities.

LENS Project Workshop of 17 August

Consultation Response

Letters ENSG Horizon

Scanning E.On Scenarios National Grid

Scenarios Workshop

Breakout group

Demand Demand Demand Patterns

Proximity of supply to demand

Demand

Generation Generation Mix of sources and changing

availability Generation

Technology Technical advances

Technological advances

(transportation)

Planning Government Policy

Regulation and Legislation Regulation Incentives

Degree and nature of govt

control

Regulation and value of carbon

Network performance and

security requirements

Changing network

requirements Network Design Network security

and resilience

Resources and skills Skills and People Skills

Requirements Skills and resources

Environment Health and

Safety

Environment Health and

Safety

Environmental pressures

Environmental impact

Power network businesses

Power network businesses DNOs –

proactive or

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reactive International

context Global trends European networks

Customer behaviour Social trends

Growth in emerging markets

Other energy chains – heat and transport

Transitional issues

Table 8 – Potential LENS inputs from LENS consultation and ENSG Horizon Scanning

The tabulated data can be distilled to produce the following list of potential inputs for the LENS project.

• Electricity Demand – total electricity demand, geographic profile, variability, peak demand. Influenced by multiple external factors including consumer behaviour, economic growth, government policy and environmental circumstances.

• Electricity Generation – location, type and mix. Influenced by multiple external factors including environmental impact, government policy and technical development.

• Technological Development and Deployment – the extent to which key network technologies develop and are implemented (smart metering, active networks, power electronics, superconducting devices, energy storage technologies and fuel cells).

• Planning Framework – national, regional and local level, influenced by health and safety and environmental pressures

• Legislative and Regulatory Framework – effect of policy, incentives and targets at international, national and regional level.

• Security of supply – the requirements placed on the network reliability, quality of supply and performance. The nature of this will be dictated by consumer expectation, regulation (security standards), environmental changes and technology (use of new technology or technological restrictions).

• Resources (material and skills) – enabling or limiting factor for network development in terms of requirements and availability.

• Environmental Impact and Health and Safety – environmental changes due to climate change and their effects on networks and environmental concerns such as the pollutants from power equipment and aesthetics of overhead lines.

• Power Sector Structure – potential emergence of Energy Service Companies and progress towards Distribution System Operators (DSOs), market arrangements.

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• International Context – interconnectors, offshore grids and electricity storage technology, economic growth in emerging markets.

• Consumer Behaviour – affecting levels of demand and requirements placed on electricity industry.

• Other Energy Chains - transport and heat networks and their impact on electricity networks.

• Transitional Issues – present situation dictates short and medium term possibilities.

This list of potential LENS inputs is comprehensive. Each individual issue and group of issues noted in the preceding subsections can be directly related to one of the input categories above.

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4 Proposed Inputs for LENS Scenario Development In the LENS project methodology [15] the focal question has been defined as:

‘What would be the impact of markets, policy, environmental, geopolitical and technology futures on GB power networks and their regulation [in 2050]?’

Therefore the inputs used to create the LENS scenarios need to address each aspect within the focal question and any other relevant drivers to provide a diverse set of external factors that could influence the requirements and thus development of the GB power networks. From the previous sections it is clear that there is a vast number of issues to be addressed and therefore a wide range of potential inputs to the LENS project. However not all of these issues are necessarily directly relevant to the LENS project and hence the inputs that specifically affect networks need to be extracted. Within each of the previous sections potential LENS inputs have been identified (sections 2.10 and 3.3). This section aims to discuss the findings of those previous sections and rationalise the full set of potential LENS inputs into a manageable, final set of proposed inputs that are specifically relevant to the LENS project and specifically the focal question. In order to consolidate the analysis and prospective LENS project inputs, the lists of potential LENS inputs from the previous section have been logically collated and condensed and then grouped into ‘high level’ inputs and ‘network specific’ inputs. The high level inputs shape the wider external circumstances, describe the storylines and dictate the overall generation and demand profiles. The network specific inputs highlight the more detailed elements that will be used within the scenario storylines to describe the role of networks, the functionality required and possible constraints. Some of the network specific inputs will be heavily influenced by generation and demand but there will also be network specific inputs that are independent of generation and demand that will play a pivotal role in the scenario development.

4.1 High level LENS inputs The high level inputs describe the context and landscape within which the electricity supply sector and, more specifically, the GB power networks sector exist. These inputs reflect trends and developments in society and the world at large that networks must respond and adapt to.

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• Consumer Behaviour – This input represents the influence of people and society including consumer trends and use of energy, lifestyle patterns, demographics, population and employment movements, leisure pursuits and housing preferences.

• Economic Landscape - This is essentially about the vibrancy of the national economic situation and there is a clear effect of this on demands for services, consumer behaviour and the political scene. Infrastructure investment funds available and research and development funding is driven in part by the economic situation. There is also a link to ‘International Context’ as the global economy and global markets drive the GB national position.

• Energy Demand – Leading on from ‘Consumer Behaviour’ and ‘Economic Landscape’ the resulting national, regional and sectoral energy demands will directly influence the electricity demand profile (which is identified below and has a more direct influence on electricity networks). In addition, new uses for energy in different forms and alternative energy supply chains will also influence electricity demand.

• Environmental Landscape – This title encompasses issues such as; environmental changes due to climate change and their effects on networks, concerns such as the pollutants from power equipment and aesthetics of overhead line, the level of importance placed on environmental issues by society and environmental assessments of generation and network development.

• Political/Regulatory Landscape – This input describes the extent of government involvement in the market including the use of regulation and incentives, the political response to consumer behaviour and environmental landscape and the level of regionalisation within policy making. On the political front there is a strong influence from the ‘International Context’ input since international and European agreements strongly influence the GB political position.

• International Context - Linked to ‘Political/Regulatory Landscape’ and ‘Environmental Landscape’ is the influence of international legislation and regulation. Key issues here include international energy and carbon markets, electricity via interconnectors and national energy security concerns (which are directly linked to international resources and markets).

4.2 Network Specific LENS inputs The network specific inputs describe the groups of issues that have a more direct influence on the development and operation of GB power networks.

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• Electricity Demand – Heavily influenced by overall energy demand this

input will give more detail on factors such as location, variability, peak load, patterns of usage, efficiency, new demands (e.g. transport), and the demand patterns dictated by consumer behaviour. The material reviewed in this document and the inputs to the LENS consultation provide a diverse set of detailed issues and quantative data to be considered for this input.

• Electricity Generation – A key driver of future network requirements, this input will inform the generation mix, location, technology and proximity to demand. Again, the material reviewed in this document and the inputs to the LENS consultation provide a diverse set of detailed issues and quantative data to be considered for this input

• Security, Quality and Performance of Supply – This input describes the requirements placed upon the network in terms of resilience and quality. The nature of this will be dictated by consumer expectations, regulation (security standards), environmental changes and technology (use of new technology or technological restrictions).

• Transmission and Distribution Network Architecture – This input deals with some of the more technical aspects of network architecture such as the respective role and size of transmission and distribution networks, the extent of undergrounding, communications for monitoring and control, standards, Interconnectors and offshore grids. This could be considered as the blueprint of the network that is implemented by the network technology described below.

• Network Technology Development and Deployment – Technological developments and their deployment in areas such as superconductors, microgrids, energy storage, demand side participation, smart metering, advanced protection and control and FACTS will directly influence possible future network architectures and development pathways.

• Power Network Sector Structure – The role of energy supply companies, distribution system operators, private networks, the incentives framework for innovation and performance, network planning frameworks and regulation will all shape future power network developments.

• Transitional Issues – Factors such as the legacy power system, level of legislation, use of standards, resources and skills will influence the ability of the network to adapt and meet the demands placed on it. These transitional issues will influence the pathways along which the electricity networks sector develops.

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4.3 Proposed Inputs Summary The above lists of high level and network specific inputs now provide a manageable set of input titles that represent the large and varied lists of issues and themes produced in the preceding review and analysis sections. Each of the individual issues identified in this report can be directly linked into one of these proposed input categories making this list both concise and comprehensive. Once the themes for the scenarios have been identified (see section 5), the range of possibilities (and in some cases numerical values) for these inputs can be explored for the purposes of developing the scenarios.

4.4 Input Areas for Further Investigation It is emphasised that this report does not draw to an end the process of incorporating external inputs to the LENS project and it is the intention of the project team to consult specific reference material on key issues where there is a requirement for more detailed information. Taking the list of proposed inputs it is clear that information from studies on specialist areas may help deepen our understanding of the variations possible within some of the input topics.

• Consumer Behaviour is proposed as an input influencing the use of energy. The underlying issues such as demographics, lifestyle patterns and housing preferences perhaps merit further investigation. Further information on electricity consumer behaviour is available from an ongoing BERR consultation [16]. The Tyndall world transport scenarios have already been identified as a source of information on demographics and behaviour trends [14]. The national consumer council has also published studies on consumer behaviour in relation to climate change [17].

• Electricity demand is an input that will be affected by many issues

including the overall energy demand and the availability of alternative energy sources. Publications by the Tyndall Centre on the hydrogen economy[18] and fuel cells [19] can inform on this area.

• The Transitional Issues input contains resources and skills as a significant

issue. This could be informed by publications such as the Energy and Utility Skills publication – Skills Intelligence for Electricity [20].

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• The Power Network Sector Structure input could potentially be informed by other industries, such as telecoms, that have seen significant change in recent years [21].

• The LENS methodology references Shell as forerunners in the scenarios

field. Their 2002 publication People and Connections could provide a useful information source on the International Context input [22].

• Finally, regional development plans and renewable targets can provide

insight into potential generation portfolios and dispositions [23] [24]. This need for digging deeper in some areas does not detract from the content of this report and in fact will be informed by it. This report allows the presentation, and in section 5, the analysis of the proposed inputs to determine potential themes that will ‘drive’ the future. From this foundation the process of deeper digging, modelling and sketching out possible scenarios of interest can proceed.

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5 Potential Scenario Themes This report has presented diverse sources of information that are relevant to the LENS scenario development process. These range from major scenarios activities led from the academic and science communities to those led from industry, and from quantitative modelling approaches to more qualitative activities (including the LENS workshop and analysis of consultation response letters). Gathering information from such a broad range of contributors has produced very long lists of issues to be considered in the scenarios. In the preceding section the lists of issues have been collated and analysed to produce a group of high-level inputs. In addition a second group of network specific inputs has been proposed that identify the more detailed drivers that will influence the network specifically. The input analysis in sections 2 and 3 that led to the proposed inputs of section 4 shows a good level of consensus on the main driving forces that will affect the development and regulation of power networks in GB. As set out in the LENS methodology, the next stage in the scenario development process is to identify the key themes that will be used to form the scenarios. Although this is not a key deliverable from this report some possible themes are suggested here in order to demonstrate potential options and promote discussion.

5.1 Discussion and analysis Referring to the proposed LENS inputs in section 4, it is necessary to represent these with an appropriate set of high level themes that allow a rich description of the circumstances and driving forces that shape the development of power networks in GB. The themes must also allow the creation of scenarios that answer the focal question outlined in the LENS methodology.

‘What would be the impact of markets, policy, environmental, geopolitical and technology futures on GB power networks and their regulation [in 2050]?’

Taking these points into account it is clear the scenarios must therefore focus on GB power networks. Two key direct driving forces of the shape of future GB power networks could be identified as generation and demand. What is meant here is that the physical shape of future power networks and the mechanisms for their operation and management are driven directly from the demands that must be served and the generation sources that are exploited to meet those demands.

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However it is important to recognise that generation and demand are very strongly influenced by both the external landscape (of the political, economic, technological situation in an international context) and the role that electricity consumers will play both as users of energy and also as members of society. As users of energy, consumers present a very wide variety of lifestyle, employment and residential characteristics and as citizens their attitudes and behaviour influence the political and regulatory situation. Consumers may also take on a role as small scale generation operators. As such it should prove more fruitful to explore the external landscape and electricity consumer characteristics as themes for the LENS project rather than simply pursue more straightforward electricity supply-demand scenarios. There will also be factors other than the external landscape or consumer characteristics that require to be explored in more detail to address the key concern of the LENS project: power networks. Several network specific inputs have been identified and proposed in section 4 such as technology, architecture, performance requirements, transitional issues and sector structure. To adequately address and place the appropriate emphasis on these inputs a theme focused on networks is required. It is proposed that this is entitled ‘Network Role’ to provide a broad focus on what networks will be required to deliver and how they will be structured (in a technical and commercial/regulatory sense). Therefore at this stage it could be argued that the chosen themes must be capable of creating a storyline describing the external circumstances and consumer behaviour that shape potential network architectures, particular generation and demand profiles and hence the role of networks.

5.2 Potential themes for LENS So, in conclusion a set of three potential themes that addresses the arguments set out above are:

• External Landscape • Consumers • Network Role

The relationship between these themes and the inputs is described below and represented graphically in Figure 9. The intention is not to uniquely map each input to one theme title as the relationship is more complex than this and in some cases an input will contribute to more than one theme.

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External Landscape: The external landscape is described mainly in terms of the Economic Landscape, Energy Demand, Environmental Landscape, Political/Regulatory Landscape and International Context inputs (see section 4). The national economic situation has a clear effect on demands for services, infrastructure investment funds available and research and development funding. The international dimension is important as the global economy and global markets drive the GB national position. The local, regional, national and international political situation is a rich and complex arena. The effect of climate change at global and national levels, European directives and national environmental policy targets illustrate just some of the layers of the political and environmental situation. Regulation has a direct impact on the electricity sector in terms of electricity (and energy) market mechanisms and this in turn influences the generation and demand situation. Planning frameworks at national and local levels will also influence network capability and speed of response to changing requirements. This theme allows the inclusion of many high level inputs that combined provide for a rich description of society and the context within which the future power network will operate. Consumers: Drawing mainly from the Consumer Behaviour input this theme will also be influenced by many of the other high level inputs describing the External Landscape. From general trends in society such as where people live and work and down to the lower level questions of how electricity is used and what it is used for, it is clear that consumer lifestyles, attitudes and behaviour will drive the demands for electricity and the nature of the electricity supplies from production down to delivery to their homes and places of work and leisure. This theme gives a firm focus on consumer issues within the scenario plus adequate scope to explore changing societal norms and the impacts they will have for power networks. Network Role: This theme will primarily draw on the proposed network specific inputs (see section 4). The network role will be influenced by generation of particular types in particular places and operating in particular modes combined with electricity demand of certain volumes, variability and geographical disposition. There is great variation in generation futures to be explored from large to small scale units located in different regions of the country, distant or close to consumers and with different economic, technological and environmental characteristics. The potential for demand profile reshaping through demand side management and the effect of energy efficiency measures deployed by consumers can be explored in the light of their impact on future networks. Combinations of the various possibilities within generation and demand and the other network specific inputs will dictate varied roles the network must play within the scenario. The role networks play in future will also be driven by the legacy infrastructure and the possible pathways (informed by the

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Transitional Issues input) along which networks might progress (informed by the Technology and Network Architecture inputs for example).

Figure 9 illustrates the influence of the LENS inputs on the three potential themes. The outer circle represents the proposed inputs from section 4. The issues (and groups of issues) represented by each input, feed into one or more of the potential LENS themes. These three themes then interact to form scenarios.

Figure 9 – Inputs, themes and scenarios relationship

Scenario

Consumers

Network Role

External Landscape

Energy Demand

Environmental Landscape

Political/Regulatory Landscape

International Context

Economic Landscape

Consumer Behaviour

Electricity Generation

Security, Quality and Performance

of Supply

T&D Network Architecture

Network Technology Development &

Deployment

Power Network Sector Structure

Transitional Issues

Electricity demand

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6 References

1. Elders, I., G. Ault, S. Galloway, J. McDonald, M. Leach, E. Lampaditou and J. Köhler (2006). Electricity network scenarios for the United Kingdom in 2050, in T. Jamasb, W.J. Nuttall and M.G. Pollitt (eds), Future Electricity Technologies and Systems, Cambridge: Cambridge University Press. http://www.supergen-networks.org.uk/publications/publications_softcopies/EPSRC-SGFNT-TR-2005-001-2050-scenarios-report-July2005.PDF

2. R. Tummilty, G, Ault, et al. 2005. Electricity Network Scenarios for 2020.

3. Energy Futures Task Force 2001. Foresight: Energy for Tomorrow:

Powering the 21st Century. London: Department of Trade and Industry http://www.foresight.gov.uk/first_phase/1999-2002/dl/Energy_and_Natural_Environment/Reports/Energy%20for%20tomorrow/Energy_For_Tomorrow_Sep_2001.pdf

4. Environmental Futures (Office of Science and Technology, March 1999)

5. Performance and Innovation Unit 2002. The Energy Review. London:

Cabinet Office. http://www.cabinetoffice.gov.uk/upload/assets/www.cabinetoffice.gov.uk/strategy/theenergyreview.pdf

6. Royal Commission on Environmental Pollution 2000. Energy - The

Changing Climate. London: HMSO. http://www.rcep.org.uk/newenergy.htm

7. Watson, Jim 2003. UK Electricity Scenarios for 2050. Brighton: Tyndall

Centre for Climate Change Research http://www.tyndall.ac.uk/publications/working_papers/wp41.pdf

8. Tyndall Centre for Climate Change Research 2005. Decarbonising the

UK - Energy for a climate conscious future. http://www.tyndall.ac.uk/media/news/tyndall_decarbonising_the_uk.pdf.

9. Department for Business Enterprise and Regulatory Reform 2007. Energy

Markets Outlook. http://www.berr.gov.uk/energy/energymarketsoutlook/page41839.html

10. Greenpeace/WADE 2006. Decentralising UK Energy.

http://www.greenpeace.org.uk/MultimediaFiles/Live/FullReport/7441.pdf

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11. Union of the Electricity Industry, Eurelectric 2007. The Role of Electricity. http://www2.eurelectric.org/Content/Default.asp?PageID=730

12. Electric Power Research Institure 2005. Program on Technology

Innovation: Electric Power Industry Technology Scenarios. http://www.epriweb.com/public/000000000001013016.pdf

13. Ghanadan. R. and Koomey. J. 2005. Using energy scenarios to explore

alternative energy pathways in California. Energy Policy 33 (9): 1117 – 1142. http://rael.berkeley.edu/files/2005/Ghanadan_Koomey_scenarios_2005.pdf

14. Tyndall Centre for Climate Change Research 2005. World Transport

Scenarios Project. Technical Report 25. http://www.tyndall.ac.uk/research/theme1/final_reports/t3_15.pdf

15. Long-Term Electricity Network Scenarios (LENS) – methodology, general

project update and second workshop - 273/07 http://www.ofgem.gov.uk/Pages/MoreInformation.aspx?file=LENS-Scenarios%20Methodology%20-%20v070926.pdf&refer=Networks/Trans/ElecTransPolicy/lens

16. Energy billing and metering: changing consumer behaviour. A

consultation on policies presented in the energy white paper – 07/1220. BERR August 2007. http://www.berr.gov.uk/files/file40456.pdf

17. Hodsworth. M. and Steedman. P. 2007. 16 pain-free ways to help save

the planet. http://www.ncc.org.uk/nccpdf/poldocs/NCC081_16_ways.pdf

18. Dutton, A. G., Bristow, A. L., Page, M. W., Kelly, C. E., Watson, J. and Tetteh, A. (2005) The Hydrogen energy economy: its long term role in greenhouse gas reduction, Tyndall Centre Technical Report 18 http://www.tyndall.ac.uk/research/theme2/final_reports/it1_26.pdf

19. Peters M., Powell J, (2004) Fuel cells for a sustainable future II: Tyndall

Working Paper 64 http://www.tyndall.webapp1.uea.ac.uk/publications/working_papers/wp64.pdf

20. Energy and Utility Skills. 2001. Employment and Skills Study. Skills

Intelligence for Electricity. http://www.euskills.co.uk/download.php?id=68

21. Final statements on the Strategic Review of Telecommunications, and undertakings in lieu of a reference under the Enterprise Act 2002. Sept 2005. Ofcom http://www.ofcom.org.uk/consult/condocs/statement_tsr/

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22. People and Connections. Global Scenarios to 2020. Shell 2002.

http://www.shell.com/static/aboutshell-en/downloads/our_strategy/shell_global_scenarios/people_and_connections.pdf

23. Scotland’s Renewable Energy Potential: realising the 2020 target. 2005.

Scottish Executive. http://www.scotland.gov.uk/Resource/Doc/54357/0013233.pdf

24. Technical Advice Note (TAN) 8: Renewable Energy (2005). Welsh

Assembly Government. http://new.wales.gov.uk/topics/planning/policy/tans/tan8?lang=en

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7 Appendix: LENS Consultation Response Letters As stated in section 3.1. this appendix represents the academic team’s interpretation of the written consultation responses to Ofgem’s open letter of 15 June 2007. It is independent from the separately published Ofgem summary of written responses to the 15 June open letter. In response to Ofgem’s open letter, several stakeholders responded with both comments on the scenarios process and to suggest issues to focus the scenarios development process. In this section, the issues raised by the respondents are captured and discussed. The issues are presented in no particular order. The issues are grouped under logical headings and are analysed for key outcomes and messages in the discussion section (Section 4).

7.1 Customer expectations, security and quality of supply, and network performance levels

• Providing enhanced network performance through more reliable network

components and designs, smart automation and distributed generation. • Supply interruptions and waveform quality may be more of an issue in

future with very different technologies in use and potential susceptibility to such network phenomena.

• Security standard P2/6, its future role, successor security standards and the possibility of designing part of the networks to exceed this standard level of security.

• Dependence on technology in future may make security of supply more valuable in future and there might be alternatives to security delivered by the network such as local use of batteries in appliances8.

• Service and network needs will be driven in large part by the use of technology with security of supply implications from these user technologies. Very high levels of security for major urban centres are viewed as essential to secure the use of technologies on which future living is likely to depend more.

7.2 Resources and skills requirements

• Uncertainty regarding future requirements for resources (human and materials) and skills is noted.

8 The work of the Energy Emergencies Executive - Electricity Task Force is cited.

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• Education and training policy are related to the human resource issues and especially important where high technological advancement is foreseen.

7.3 Technological development in networks and on the customer side

• Customer use of existing and new technology by 2050 could be a key

driver and one of the impacts of this would be on the pattern and overall level of use of electrical energy.

• Requirement for future targeted research and development activities in network technology is noted.

• Use of smart metering at both customer premises and within distribution networks to enable smart network management.

• Legacy network infrastructure is an important consideration of future developments as it somewhat constrains the starting point and the immediate years to come. Higher network investment is already foreseen for renewal of the ageing asset base.

• Role of emerging technologies such as fuel cells (with stationary power production and vehicle motive power potential) is cited as an example of radical technological developments with the potential to impact on networks.

• Moves towards more probabilistic methods for assessment of asset and system risk may emerge.

• Active networks seen as a solution to the expected growth in the levels of distributed energy resources with optimisation and aggregation of electricity production over a wide area with distribution network in a ‘system operator’ type role.

• Role for new technologies such as power electronics, superconducting devices and energy storage technologies.

• Convergence of transmission and distribution system architectures as both facilitate the transport, balancing and other services associated with diverse portfolios of generation and demand side offerings.

7.4 Planning frameworks

• The interface of generation developments to local authority planning frameworks is noted as a key area of influence over the generation portfolio that will emerge in future.

• Planning at national, regional and local levels is likely to have an effect on what energy developments occur. Energy efficiency standards for buildings, consents for domestic scale generation and consents for renewable power stations are cited as examples.

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• Transmission system planning frameworks (such as that laid out by the GB SQSS) drive the nature of system developments for given generation developments and outlooks.

7.5 Legislative framework

• Link is made between policy (through legislation and regulation) and the outcomes that will emerge in 2050.

• Extent to which networks will be expected to deliver national and international carbon reduction targets.

• Influence of devolved legislatures and regional government bodies on generation development (including targets and plans for devolved regions of GB).

7.6 Regulatory framework

• Pricing and incentives are cited as a possible output (of the implications stage) of the project but the influence they will have on network development is noted.

• Stranded assets are highlighted as potentially problematic issue in light of uncertainties over future direction and expected rapid changes.

• Regulatory policy will influence the type and timing of investments in electricity network infrastructure.

7.7 Demand growth and patterns of use

• Potential impacts from changing patterns of electricity usage and the drive for energy efficiency.

• The impact of transport on demand for electricity is noted as important as substantial growth in electrical drive transport is seen as a serious possibility in a timescale to 2050.

• Demand and generation projections from several sources (e.g. previous scenarios work) are recommended to give a sufficiently broad range of possible outcomes.

• Urban regeneration and demographic influences are important as drivers of demand.

• Summer peak loading likely to spread as public comfort level expectancy grows and warmer climate emerges.

• Access arrangements for demand developments.

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7.8 Generation development and fuel mix

• The importance of generation and the future mix of generation on network development is highlighted.

• The geographical location and technology mix of large-scale transmission connected generation is viewed as a key driver of network development.

• Renewable and distributed generation are both cited as drivers for network development.

• Approaches to aggregation of distributed energy resources (such as under investigation in the EU Fenix project) are viewed as important.

• Key role of networks to facilitate renewable generation development in terms of both large scale generation connections to transmission networks and smaller scale generation connections to distributions networks.

• Dependence on natural gas fuel source and gas transmission networks is viewed as an important consideration.

• Geographical issues are cited again in terms of the relative distance from energy source to demand and the substantial difference between different portfolios of transmission connected generation and major developments in decentralised power generation.

• Hydrogen economy with all of its requirements (hydrogen storage, grid transport network, etc.) would change the role and demands placed on electricity networks.

• Nuclear fusion is cited as potentially viable in the period to 2050 and with a preference for very large scale power generation this would drive network development in a very particular way.

• Network access for generation developers including possibility of more exploitation of distributed energy resources.

7.9 Network resilience

• Network resilience to increased incidence of more severe winds, flooding, lightning and blizzards.

• Resilience to physical damage such as from terrorist activity should be considered.

• Resilience against a background of ageing asset bases in the GB networks.

7.10 Health, safety and environmental pressures

• Public and power sector personnel safety in more complex environment with potentially more people in proximity to power plant.

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• Electric and electromagnetic fields impacts on health likely to remain a concern with or without conclusive scientific evidence as to their effects on human life and health.

• Environmental pressures constraining network development including issues such as insulating oil, SF6 and visual amenity of overhead lines.

• Aesthetic impact of overhead lines may grow in importance with more calls for under-grounding of more circuits.

7.11 Future role of power network businesses

• Requirement for sustainable networks with low losses, distributed generation and security. The role of distribution businesses in supporting these objectives could be substantially different from today’s role of supporting electricity demand.

• Local to regional balancing of supply and demand with potential to reduce duties on transmission network but increase duties on distribution system operators including organising the provision of balancing and ancillary services.

• Potential emergence of Energy Service Companies optimising energy usage and supply within a discrete area, arbitraging between different energy sources.

7.12 International context

• The development of interconnectors to neighbouring countries in the timeframe to 2050 is noted.

• Power plant and equipment markets are already internationalised and the continuation of this trend has implications for the development of power networks. The pace of development of other global regions will have an impact on the availability and price of core materials and products.

• Standards and specifications for international power equipment will also become important with less opportunity for ‘GB only’ products and pressure on GB standards (including health and safety) to align with international standards.

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