A change in ambition from FES 2019: Upside’s view on National Grid’s Future Energy Scenarios 2020
Yesterday, National Grid published its Future Energy Scenarios, a report which outlines four different pathways for the decarbonisation of the UK electricity system to reach net zero by 2050.
This year the report includes three scenarios in which net zero is met, two by 2050 (Consumer Transformation & System Transformation) and one by 2048 (Leading the Way). The final scenario, Steady Progression results in a 68% emission reduction compared to 1990 baseline levels. By the mid-2030s, the net carbon intensity of electricity generated in GB has become negative in all net zero scenarios (Fig. 1) compared to 7gCO2/kWh in the FES 2019 Two Degrees scenario, the most ambitious 2019 scenario.
Reaching net zero requires immediate action across all key technologies and policy areas; much more so than in the 2019 scenarios. This is due to legislation passed by parliament in June 2019 which requires the government to reduce the UK’s net emissions of greenhouse gases by 100% relative to 1990 levels by 2050. Technologies that are needed to drive this change include hydrogen, Carbon Capture and Storage (CCS), renewable generation and a significant scaling up of flexibility such as Demand Side Response (DSR) and storage.
Figure 1. Average carbon intensity of the grid in each of the four scenarios.
The role of hydrogen
Hydrogen plays a crucial role in all scenarios that achieve net zero, with production reaching 600TWh in the System Transformation scenario. This compares to 312TWh in the most ambitious scenario in FES 2019 (Two Degrees).
Hydrogen is used in each FES for varying degrees of heat and transport decarbonisation, much more so than in the 2019 scenarios. This demonstrates how the new net-zero target brings the role of hydrogen to the fore, to help decarbonise the difficult-to-electrify sub-sectors within heat and transport, e.g., domestic heating and long-distance freight. But to do this at scale the challenges of zero carbon production must be met. For example, a minimum of 80TWh of hydrogen is required by 2050 to decarbonize shipping and HGV sectors. In the System Transformation scenario up to 65% of homes use hydrogen for heating.
It is notable also that greater hydrogen penetration offers other benefits in terms of energy storage and flexibility potential. Hydrogen production through electrolysis can facilitate increased market penetration of wind and solar generation by operating flexibly and even utilising hydrogen storage facilities to offer inter-seasonal storage, which may become important when there is a massive build-out of wind and solar.
Figure 2. GB hydrogen production for FES 2019 and FES 2020.
New low carbon generation capacity
In order to meet annual demand projections, at least 40 GW of new capacity will need to be connected to the electricity system in the next 10 years. This requires at least 3 GW of wind and 1.4 GW of solar to be built every year from now until 2050. However, this increase in renewable generation with relatively low load factors compared to traditional thermal technologies means significantly more capacity is required to meet demand. Leading the Way achieves 42 GW of offshore wind installed by 2030.
If there is too much renewable generation compared to demand such as on windy, sunny summer days, this excess will need to be met by flexible demand from DSR or electrolysis to produce hydrogen or be exported.
Figure 3. GB low carbon and renewable capacity (GW), including CCS, nuclear, solar, wind and other renewables for FES 2019 and FES 2020.
The electrification of transport and the scaling up of V2G
Whilst current levels of residential flexibility are low due to limited uptake and price signal incentives, both Consumer Transformation and Leading the Way illustrate a significant shift in consumer behaviour comprising high levels of DSR, domestic storage and V2G technologies.
Electrification is key to decarbonising transport, with at least 60% of all road transport electrified in the net-zero scenarios. For example, by 2050, the Leading the Way scenario, suggests that up to 5.5m vehicles with vehicle-to-grid capability could provide just under 40 GW of capacity. In Consumer Transformation, System Transformation, Steady Progression V2G uptake could be closer to 34 GW,15 GW and 7 GW respectively. The V2G capacity in the Steady Progression 2020 has been revised downwards by half the amount compared to Steady Progression 2019. This V2G functionality, as well as unidirectional smart charging capability, will need to be facilitated by tariffs which reflect wholesale prices throughout the day as opposed to flat rate tariffs. An assumption is made that once consumers have a clear price incentive for flexibility then other load shifting activities will follow and increase the take-up of smart appliances.
Figure 4. Vehicle-to-grid capacity for the FES 2019 and FES 2020.
Once again the NG FES have demonstrated the significant change we can expect in our energy system in coming years. One key difference between the 2020 scenarios (formulated in light of legislation to ensure the UK has net-zero emissions by 2050) and the 2019 scenarios (formulated when legislation was for an 80% emissions reduction on a 1990 base by 2050) is that all sectors must change. For some sectors this is harder than others and therefore we will need negative emissions well as using low carbon sources of energy and a significant scaling up of non-traditional sources of flexibility such as DSR and storage to meet these goals.