Utility Week

Money well spent How low regret "whole system" investments made now across electricity and hydrogen infrastructure will benefi t Great Britain in the long run. Expert view Mark Livingstone and Konstantinos Anagnostou, Guidehouse T he UK aims to hit its net-zero target by 2050, which is not too distant considering the ve-year invest- ment cycles for electricity and gas networks. The ENA de nes a whole energy system approach as the development of a range of options for clean energy in all its various uses (including electricity, transport and gas) and tting them together in the best combina- tions to deliver value for business and consumers, as well as keeping the energy € owing. Electricity and gas networks are currently developed in isolation, with little or no coordination stemming from di‚ erent investment timelines, planning and incen- tives, based on the existing regulatory framework. At the same time, ongoing work is mostly focused on single vector analysis (e.g., electricity only, or hydrogen only) for the next 10-12 years, rather than long-term whole system integration. The Department for Energy Security and Net Zero and Ofgem have recently agreed that a new body, the Future System Operator (FSO), would apply a whole systems approach to network planning across fuels and technologies in the energy sector. However, the role and responsibilities of the FSO in relation to strategic plan- ning and delivery of a decarbonised system have not yet been explicitly de ned. This becomes particularly sensi- tive when it concerns overall system planning and how this impacts national security of supply. For example, earlier this month, National Grid Electricity System Operator (ESO) put back-up coal plants into action for the rst time during a period of tight supplies as a cold snap swept the country. Fossil fuel generation amounted to 36.3% during that week, of which 35% and 1.3% was generated from natural gas and coal, respectively. The gures highlight the importance of dispatchable peak supply on the system at times when renewables cannot provide the required electricity, considering that fossil fuel generation would need to be drastically reduced for the country to meet its net-zero target. If we are facing such security of supply challenges today, we surely face a very serious peak sup- ply situation in 2040 or 2050? Guidehouse has recently completed a study that provides an optimised gas and electricity transmission infrastructure outlook for 2050, and demonstrates the value of a whole energy system approach to transmis- sion infrastructure planning in Great Britain. The study found that even in a highly electri ed, net-zero compli- ant scenario, hydrogen- red generation would play a key role in providing over 30GW of electricity to the system, on a limited wind, peak day in 2050. Hydrogen turbines would feature next to other € exibility options such as demand-side response, storage and imports, but su˜ cient peak power capacity will be a crucial design feature of a low-carbon energy system. Decarbonising electricity generation is only one area where a whole energy system approach can deliver tan- gible bene ts. The Guidehouse analysis also suggested that hydrogen storage would be critical in supporting system demand during peak and low wind days, deliver- ing up to 95GW of rm, dispatchable supply by 2050, supporting both electricity and gas systems. This form of storage would also strengthen energy security and sys- tem resilience, with salt caverns being one of the most mature options available in the country. All of this highlights that the government and the new FSO body will need to do more to ensure that the UK remains on track to meet its net-zero targets. A truly whole energy system approach would require the development of a long-term cross-sectoral infrastructure strategy across energy carriers, the emergence of new business models for (hydrogen) storage, as well as the promotion of low regret investments in energy genera- tion and transmission infrastructure that would support both electricity and hydrogen systems in the future. This may include the selection of optimal locations for hydro- gen production and storage, identi cation of incentives for low-carbon peaking plants, strategic reinforcement of the electricity network to address potential bottle- necks and more in-depth regional analyses with whole system focus. Ofgem is now consulting on the process for decid- ing the overarching framework design for the next RIIO price controls. Particular attention should be paid to coordination of future investments that would set us on the path for timely decarbonisation. The clock is tick- ing… For further information, visit: guidehouse.com Mark Livingstone, Director, Energy Consulting, Guidehouse; and Konstantinos Anagnostou, Managing Consultant, Guidehouse Electricity UTILITY WEEK | APRIL 2023 | 19

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