Memorandum submitted by the Energy Technologies
Institute
The Energy Technologies Institute (ETI) is a
UK-based company formed from global industries and the UK Government.
The ETI brings together projects that create affordable, reliable,
clean energy for heat, power and transport.
The ETI demonstrates technologies, develops knowledge,
skills and supply-chains, informs the development of regulation,
standards and policy, and so accelerates the deployment of affordable,
secure low-carbon energy systems from 2020 to 2050.
By bringing together the efforts and investments
of both private and public sectors, and by focusing on key energy
challenges with a new level of scale and ambition, the ETI has
the potential to achieve step change advances in the demonstration
of low carbon technologies. Our Member companies' expertise, resources
and the potential route to commercialisation that they offer is
one of the strengths of the ETI. Current membership comprises
BP, Caterpillar, EDF Energy, E.ON UK, Rolls-Royce and Shell. The
public sector funding is provided by the Department for Innovation,
Universities and Skills (DIUS) via the Technology Strategy Board
(TSB) and the Engineering and Physical Sciences Research Council
(EPSRC).
Where the ETI feels able to offer evidence,
this is incorporated under the relevant Committee question below.
1. What should the Government's vision be
for Britain's electricity networks, if it is to meet the EU 2020
renewables target, and longer-term security of energy supply and
climate change goals?
The Energy Technologies Institute (ETI) is developing
a model for the UK energy system which complements other approaches
such as MARKAL and allows assessment of diverse technology options
for the UK. Based on this modelling work to date it is likely
that the achievement of the UK's longer-term security of supply
and climate change goals (in particular the 2050 objectives) will
be best met by the UK's electricity networks evolving as part
of an overall optimised UK energy system solution. This suggests
the need for an integrated approach in respect of infrastructure
development and behaviour across the UK's electricity, transport
and heat sectors. In view of this we believe that treating the
UK energy sector as a collection of independent sub-systems with
minimal interaction between sectors is unlikely to provide the
most optimal long-term solutions to delivering the UK's energy
objectives. Hence the vision for Britain's electricity networks
should actually be a constituent part of a broader vision for
the UK's energy system infrastructure.
2. How do we ensure the regulatory framework
is flexible enough to cope with uncertainty over the future generation
mix?
No ETI response.
3. What are the technical, commercial and
regulatory barriers that need to be overcome to ensure sufficient
network capacity is in place to connect a large increase in onshore
renewables, particularly wind power, as well as new nuclear build
in the future? For example issues may include the use of locational
pricing, or the availability of skills.
The ETI is focusing on major engineering challenges
for the UK energy system and hence is primarily addressing the
development and deployment of offshore rather than onshore renewable.
Nevertheless we believe that a key long-term issue to facilitate
the connection of a large increase in onshore renewables in particular
is the need for a planning and remuneration framework that permits
the strategic development of electricity transmission and distribution
infrastructure in order to position the network for greater renewables
build in the future. This would be a move away from the development
of electricity infrastructure on an incremental basis, and is
likely to require permitting network owners to construct new infrastructure
ahead of connection applications being received.
4. What are the issues the Government and
regulator must address to establish a cost-effective offshore
transmission regime?
No ETI response.
5. What are the benefits and risks associated
with greater interconnection with other countries, and the proposed
"supergrid"?
No ETI response.
6. What challenges will higher levels of
embedded and distributed generation create for Britain's electricity
networks?
The ETI recognises that a transition to a more distributed
electricity delivery model has the potential to offer benefits
in terms of carbon emissions reduction, cost effectiveness and
security of supply. However, it is also clear that such a transition
will most likely introduce technical and commercial challenges,
particularly as installation level of distributed generation technologies
increases. Many of these challenges are a result of the current
electricity network infrastructure and operational practices being
developed assuming a "centralised" energy delivery model;
this model is likely to require adaptation to accommodate a more
distributed approach. One example of is the need to manage increased
fault current levels within the distribution system as a consequence
of increasing numbers of power generation sources being connected
at distribution voltages.
Distributed generation is therefore likely to form
part of a more complex demand side, with an integration of heat
demand with electricity supply through combined heat and power
systems, the potential for significant local loads from electric
vehicles and consumer/producers making investment and operating
decisions which will be harder to forecast and manage than the
current familiar and more centralised system. If building scale
micro-CHP or solar PV were to be widely installed, there might
be millions of small power generators installed in the UK. The
seasonality of net heat requirements may increase as solar thermal
water heating is installed or reduce as existing buildings are
better insulated.
There will most likely need to be some adaptations
of the distribution system. Most significant will be a need to
adopt a radically different approach to network management based
on greater embedded intelligence (Smart Grids) and a more sophisticated
approach to retail tariff structures and charging mechanisms (Smart
Meters).
In this more complex investment environment,
higher returns on investment may be required to stimulate sufficient
installation of a combination of central and distributed generation.
Understanding the system drivers through the modelling described
in the answer to question (1) should help provide the insights
to enable market designs that avoid this uncertainty premium.
7. What are the estimated costs of upgrading
our electricity networks, and how will these be met?
No ETI response.
8. How can the regulatory framework ensure
adequate network investment in light of the current credit crunch
and recession?
No ETI response.
9. How can the regulatory framework encourage
network operators to innovate, and what is the potential of smart
grid technologies?
No ETI response.
10. Is there sufficient investment in R&D
and innovation for transmission and distribution technologies?
In general many of the transmission and distribution
(T&D) technologies currently deployed in the UK networks are
well proven and have good service experience in the current operational
environment. However, it is likely that the UK electricity system
of the future will need to be managed (and possibly designed)
in significantly different ways to that of the existing system
in order to manage the expected changing patterns and characteristics
of generation and demand, in particular for longer (2050) timeframes.
(See question 1 response).
Hence it is likely that T&D technologies will
be required to operate within different performance envelopes
to those currently, and significant additional R&D investment
may therefore be needed to deliver technologies compliant with
these new performance envelopes. In addition to investment in
R&D and innovation for specific transmission and distribution
technologies, there is also likely to be a significant requirement
for R&D effort into the more fundamental structural changes
that are likely to be needed within the UK energy system to deliver
the long-term UK energy targets.
11. What can the UK learn from the experience
of other countries' management of their electricity networks?
No ETI response.
March 2009
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