Findings from a new, groundbreaking analysis of the future net zero energy system in Great Britain are expected to have profound implications for policymakers, households and the wider energy sector across Great Britain. 

For the first time, the system-level value of deploying flexibility across heat, transport, industry and power sectors in Great Britain, and the sensitivity of this value to different scenarios, has been assessed. The analysis delivers a robust and up-to-date evidence-base on the role and value of flexibility in a net zero system, to drive decision making across the energy sector and government to create technology, policies and business models to realise this vision.

Reaching net zero by 2050 will require an unprecedented expansion of the country’s energy system, with electricity demand forecast to treble from 2019 levels. 

The conventional approach to energy system development has been to follow trends in demand and have production and network (transmission and distribution) capacity ready to meet demand peaks. The net zero challenge will require a much larger electricity sector, given the increasing electrification of transport demand and heating, and the gas network will also undergo fundamental changes – potentially transitioning large portions to hydrogen, and/or acting as a back-up source of energy during extreme weather events. The operation of both networks will become increasingly interlinked to deliver a secure energy system and meet carbon targets.

Understanding the role and value of flexibility in meeting demand cost-effectively is therefore vital and the analysis comes at a time when BEIS is developing a follow-up to its Smart Systems and Flexibility Plan and Ofgem is considering future investment for Great Britain’s electricity networks.

The analysis was led by the Carbon Trust and Professor Goran Strbac from Imperial College London, supported by a cross-sector group comprising: Bryt Energy, EDF, Greater London Authority, IGEM, Kiwi Power, Low Carbon Contracts Company, SBM Offshore, SP Energy Networks, Statera Energy, Scottish and Southern Electricity Networks (SSEN), UK Power Networks and Western Power Distribution. BEIS, Ofgem, the Climate Change Committee, Innovate UK, National Infrastructure Commission (NIC) and National Grid ESO were also consulted.

The objective of the project was to understand how flexibility can help deliver a net zero transition under three heat decarbonisation scenarios – electric heating, hydrogen heating and hybrid (electric with back-up gas boiler) – rather than recommend an optimal energy system for 2050. 

The scenarios were chosen to represent the potential extremes as there is significant uncertainty around how Great Britain decarbonises heating, and these choices will have a significant impact on the size and make-up of the energy system.  

Key findings

The project found that there is a need to embed flexibility across all energy sectors – power, heat and transport – to cut the cost of decarbonisation. Embedding flexibility in low carbon heat and transport solutions now will help to reduce their system impact and costs, making the decarbonisation of these sectors more economically feasible. 

Investing in flexibility is a no-regrets decision as it has the potential to deliver material net savings of up to £16.7bn per annum across all scenarios analysed in 2050. 

Flexibility will also enable the development of a safe and secure net zero energy system that can operate cost-effectively in diverse situations such as, cold, still winter periods (when variable wind and solar generation can’t run) and summer solar excesses, while reducing Great Britain’s reliance on back-up gas-fired generation.

The analysis confirms the benefit of taking a whole-systems approach to energy. The value of flexibility to the energy system as a whole is many times its value to the electricity sector alone, because it allows for interactions at all levels in an integrated system, between vectors, and at the different timescales – from seconds to seasons, that are required to maintain a secure system. To achieve this, however, digitalisation is needed across the energy system to allow information sharing, monitoring and coordination between assets and organisations.

This project showcases the significant benefits of households and businesses playing an active role in the development and operation of the country’s future energy system as transport, heat and energy use become more integrated. Positive public engagement with flexibility will be crucial for the successful implementation of a flexible energy system. 

The importance of local action was reinforced by the analysis, which found that distributed flexibility assets deliver significant value locally. Although, even more value is realised when coordinated at a national level – a critical finding at a time when there is increased interest in local energy system planning.

The analysis also considered the use of hydrogen across the energy system. It found that the development of hydrogen uses and associated infrastructure (electrolysers, natural gas reformers, biomass gasifiers, CCS infrastructure, hydrogen turbines and storage) for 2050 has significant system benefits if coordinated effectively.

Driving this value is the ability of the system to optimise production from electrolysers to coincide with high energy supply times, store hydrogen and then use it for heating, power production and other applications across transport and industry. However, there is a need to diversify hydrogen production routes (from electricity and water, gas and biomass) and develop CCS infrastructure at scale to deliver a hydrogen future cost effectively. 

Significant challenges

The report also identifies the key challenges that could delay, or prevent, the development of a smart flexible net zero system. 

The report authors call for flexibility to be treated as a core infrastructure challenge and to be integrated into low carbon generation, network planning and heat and transport decarbonisation strategies. Policymakers should try to preserve existing flexibility options (e.g. hot water tanks) and act now to maximise future flexibility, such as by building it into ‘smart’ appliances or building standards.

Consumer engagement and confidence building is also critical to scaling up the deployment of flexibility technologies. For flexibility to be rolled out successfully, it is crucial to develop business models which capture its value and to overcome consumer acceptance challenges when delivering new mobility, heating and smart appliance solutions. An evolving regulatory environment, combined with potentially low financial gains in the long term, will create challenges for developing these new business models. But by improving cost-effective data access, some of the cost burden can be alleviated.

Tom Delay, Chief Executive, the Carbon Trust, said: 

“Flexibility is vital to unlock value and it is the most important ‘no regrets’ action that can be taken as the UK moves to decarbonise heat, transport and industry, saving billions in investment and operating costs.

“It's critically important that industry, business, consumers and the public sector understand the value of flexibility and the benefits that flexibility brings to the British economy. Flexibility always delivers – we should invest in it now.”

Baroness Brown of Cambridge, Chair of the Carbon Trust said: 

“This in-depth analysis examines the different uncertainties the net zero transition throws up and offers a comprehensive evidence base on the role and value of energy system flexibility under different energy system futures. 

“The report demonstrates that energy flexibility can reduce the cost of meeting net zero and mitigate the impact of wider changes in the energy system, ensuring we reach net zero efficiently, effectively and at lowest cost.”

Findings from the analysis are published in the Flexibility in Great Britain report, which was launched at the Carbon Trust’s Net Zero Energy Transition Week. 
 

Flexibility in Great Britain report

Ends

NOTES FOR EDITORS

1. Flexibility is defined by Ofgem as: ’modifying generation and/or consumption patterns in reaction to an external signal (such as a change in price) to provide a service within the energy system’. To date, the energy industry has typically provided flexibility on the ‘supply-side’. 
   
   For example, to make sure supply always matches demand, electricity power stations have changed how much they produce whilst network operators have also installed enough cables to make sure electricity can always be transported to consumers. Gas networks and storage are also increasingly required to meet end user demand in real time, with the historic popularity of combination (combi) boilers removing the requirement for hot water tanks in properties. [Source: https://www.gov.uk/government/statistics/english-housing-survey-2018-energy-report (Annex Table 2.8: 57.3% of properties meet hot water demand from central heating – no hot water tanks)]
   
   For more information on flexibility see: Briefing: Flexible Energy Systems.
    
2. The Flexibility in Great Britain project group comprised: Bryt Energy, EDF, Greater London Authority, IGEM, Kiwi Power, Low Carbon Contracts Company, SBM Offshore, SP Energy Networks, Statera Energy, Scottish and Southern Electricity Networks (SSEN), UK Power Networks and Western Power Distribution.
    
3. The external stakeholder group comprised: BEIS, the Climate Change Committee, Innovate UK, National Grid ESO, National Infrastructure Commission and Ofgem.
    
4. Professor Goran Strbac of Imperial College London was commissioned to provide independent analysis on the project via Imperial Consultants.
    
5. The analysis focused on the energy system in Great Britain but it also modelled interactions with interconnected energy systems in Europe.
    
6. The project builds on previous analysis by the Carbon Trust and researchers from Imperial College London focused solely on the power sector – Energy Storage Report - Can Storage Help Reduce The Cost Of A Future UK Electricity System and An analysis of electricity system flexibility for Great Britain which found that the UK could save £17-40bn across the electricity system from now to 2050 by deploying flexibility technologies.
    
7. Full details of the analysis and its findings are published in the Flexibility in Great Britain report.
    
8. The report was launched at the opening event in the Carbon Trust’s Net Zero Energy Transition Week on 18 May. The series of virtual events explores the crucial steps necessary to deliver a smart and flexible net zero energy transition. Please register here to attend any of the events.
    
9. For interviews, images and further information please contact the Carbon Trust press office: +44 (0)207 170 7050, or press@carbontrust.com.

About the Carbon Trust

Established in 2001, the Carbon Trust works with businesses, governments and institutions around the world, helping them contribute to, and benefit from, a more sustainable future through carbon reduction, resource efficiency strategies, and commercialising low carbon businesses, systems and technologies.

The Carbon Trust:

• works with corporates and governments, helping them to align their strategies with climate science and meet the goals of the Paris Agreement
• provides expert advice and assurance, giving investors and financial institutions the confidence that green finance will have genuinely green outcomes
•  supports the development of low carbon technologies and solutions, building the foundations for the energy system of the future.

Headquartered in London, the Carbon Trust has a global team of over 200 staff, representing over 30 nationalities based across five continents.