Utility Week

14 | 20TH - 26TH JULY 2018 | UTILITY WEEK Policy & Regulation to be as many as 10.6 million in 2030 and 36 million in 2050. The previous estimates were 9.3 million and 17 million. National Grid said they could add up to 8.1GW to peak demand by 2030 and 12.7GW by 2050, but could also provide a substantial amount of storage – up to 1.1GW by 2030 and 20.6GW by 2050. For context, total storage capacity is projected to reach up to 10GW by 2030 and 50GW by 2050. The report again noted the importance of smart charging to reducing the impact of EVs on peak demand. All of the scenarios assume widespread adoption, although at varying speeds and differing levels of engagement. Heat While there is now a relatively clear route for- ward for the decarbonisation of transport, there is far more uncertainty over the future of heat. In the two scenarios in which the UK fails to meet its climate change commitments – Steady Progression and Consumer Evolution – there is remarkably little change in homes. By a wide margin, conventional gas boilers remain the dominant form of heating all the way out to 2050, with only slight growth in the number of heat pumps and hybrid boilers. Major changes only take place in the Two Degrees and Community Renewables scenarios. The Two Degrees scenario portrays a future in which decarbonisation is primarily driven by the rollout of hydrogen gas grids. Heat pumps still play a significant part, espe- cially earlier on. But by 2050 hydrogen has taken the lead, providing heat to just under a third of households. There is also substantial growth in district heating, which meets the needs of one in ten. The Community Renewables scenario represents an alternate vision of an electri- fied future. By 2050, heat pumps of various types have been installed in almost 60 per cent of homes. The growth of district heating is much more limited and, as with the Steady Progression and Consumer Evolution scenar- ios, there is no residential role for hydrogen whatsoever. Demand The electrification of transport means annual and peak electricity demand rise in all four scenarios. In terms of annual demand, the largest increase is in the Community Renewables scenario, as a result of the mass adoption of heat pumps. By 2050, it has reached 441TWh, up from 297TWh today. The smallest increase is seen in the Steady Progression scenario, which sees annual demand grow to 386TWh. The accelerated uptake of EVs means peak demand initially surges fastest in the Two Degrees and Community Renewables scenarios. However, smart and vehicle-to- grid charging are also adopted quicker and with more enthusiasm, meaning by 2040 peak demand is greater in the Steady Pro- gression and Consumer Evolution scenarios. In both of these scenarios peak demand exceeds 86.5GW by 2050, compared with 59.4GW today. It is lowest in the Two Degrees scenario, at 78.5GW. Despite rising demand for electricity, overall demand for energy – both gas and electricity – falls across all scenarios over the long run. This is most noticeable in the Community Renewables scenario. Annual energy demand nearly halves from 1,107TWh now to 685TWh in 2050. Annual gas demand plunges almost three-quarters from 810TWh to 244TWh as a result of the electrification of heating. Annual energy demand is highest in the Steady Progression scenario. By 2050 it stands at 1,024 TWh, with gas accounting for 638TWh. See analysis on the government's Road to Zero strategy, p10 "With their ability to store and supply electricity back to the grid it's striking that, even with potentially 36 million EVs on the road by 2040, National Grid predicts the extra peak demand could be as little as 8GW if managed appropriately. "A projected doubling of installed capacity by 2050 underlines the case for a stable policy framework that enables the necessary investment to be made at the least cost to customers... "The transition to low-carbon energy could happen without increasing bills if we make the correct decisions now, and mapping out the future, as this report does, will play an important role in getting those decisions right." Lawrence Slade, chief executive, Energy UK "National Grid's forecast shows that consumer demand will rapidly make petrol and diesel emissions obsolete. We are on a road to zero emissions transport. "We now need local leaders to support public demand and government ambition and create their own regional road to zero plans. Electrifying buses, taxis and light transport fleets are all easy wins. "We are ready to support them with the infrastructure they need to Reaction: 'FES underlines the case for a stable policy framework' realise that vision. By making it easy to switch to electric vehicles, we can help them clean up air pollution, promote low-carbon policies and develop a sustainable economy with better services for local people." Matt Allen, chief executive, Pivot Power "In several areas, National Grid is suggesting a rationale for going further and faster than either the Road to Zero transport strategy or the National Infrastructure Commission laid out in the last few days. According to Grid, 70 per cent of homes ought to be at EPC class C insulation standards by 2030 – currently we're under 30 per cent. Half of electric vehicle chargers should be smart by 2024. And shale gas development works against, not for, achieving carbon targets. "And under all scenarios, there's a significant build-out of small- scale distributed renewable generation – something that currently government policy is working against. "So, there are some key milestones here that ministers could usefully be internalising as they develop new policies to get back on track for the 2025 and 2030 carbon targets, for which currently, largely through inaction in the transport and housing sectors, government is off track." Richard Black, director, Energy and Climate Intelligence Unit ELECTRICITY PEAK DEMAND (INCLUDING LOSSES) source: National Grid History Community Renewables Two Degrees Steady Progression Consumer Evolution 85 80 75 70 65 60 55 50 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Electricity peak demand (GW) In non-2050 compliant scenarios take-up of EVs is slower and consumers less likely to participate in off-peak charging Faster EV take-up in 2050 complaint scenarios reaching saturation in 2040 Growth of population and industrial demand continues to rise but at a slower rate. More use of heat pumps in Community Renewables

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