Regen has conducted an innovation project with Western Power Distribution (WPD) and Wales & West Utilities to develop an integrated approach to electricity and gas scenario planning, funded by the Network Innovation Allowance. In this insight piece, we highlight some of the cross-vector thinking in Regen’s future energy scenarios work, identifying some of the interfaces between electricity and gas distribution networks.
Regen launched the results of a unique study, working with Western Power Distribution and Wales & West Utilities, to develop scenario pathways to show how the South Wales gas and electricity distribution networks could reach Net Zero by 2050.
The analysis produced a set of joint electricity and gas net zero 2050 scenarios covering WPD and Wales & West Utilities' shared distribution network region in South Wales, and explores a range of possible futures for our electricity and gas distribution networks. The analysis also worked to better understand the technologies that impact both gas and electricity distribution networks such as hydrogen electrolysis, gas fired power and hybrid heating. The main output of the project is a dataset of scenario projections provided to inform network planning and investment for WPD and Wales & West Utilities.
A summary report accompanies the dataset and describes key insights from the process, the approach taken in the analysis and the key assumptions and methodologies used for each technology and sector, as well as an overview and commentary of the results. A separate learning report has been produced focusing on the learnings from developing an integrated approach to DFES and recommendations for further development.
The results suggest that South Wales can expect significant evolution on both networks in the coming decades, and that decentralised energy supply of both gas and electricity is expected to meet an increasing proportion of annual demand.
Our energy networks are the backbone to our energy system, delivering energy from where it is generated to where it is consumed. In order to meet our net zero obligations, the UK’s network operators will need to understand what transformational changes in both energy supply and use will happen in the future, when these changes might happen and how they will impact their local networks. At its heart, an efficient and effective net zero energy system will turn to sources of flexibility, adapting to the more dynamic end use and decentralised supply of energy that we will see in the future. Our energy networks will need to work together to develop a shared understanding of this future energy system, coordinating long term investment planning and exploiting the potentially significant benefits of whole energy system approaches.
Regen has mapped what a whole energy system view of supply and demand might look like, from the perspective of the electricity and gas distribution networks. Showing the various supply and demand elements and technologies on both networks and demonstrates how and where these may interface:
This enabled the various elements of the analysis (e.g. sources of energy demand, supply technologies etc.) to be grouped into four key categories: electricity-specific demand/supply sources, gas-specific demand/supply sources, cross-over demand/supply technologies and cross-network demand/supply technologies. Understanding these different categories of energy elements highlights that electricity and gas distribution networks already interact in some areas under all net zero future scenarios. There will also likely be more instances of cross-over and cross-network interfacing between the two networks. This is only one aspect of whole energy system thinking that Regen is seeking to explore with the networks and other key actors in the wider energy system.
The scenarios developed for this project were focused on how South Wales might decarbonise heat, in a future where no unabated fossil fuel is burnt: High Electrification, where heat demand is mainly electrified, Core Hydrogen, where hydrogen for heat is available only in urban areas and High Hydrogen, plus a hybrid heat sensitivity, where hydrogen is available to all existing gas customers.
Each pathway presented very different futures for the gas and electricity distribution networks and has profound implications for energy system investment. ‘Business as usual’ network investment timetables already stretch out decades ahead. What this revealed was that, although it is valuable for networks to understand the range of outcomes, more certainty will be needed before networks can invest effectively to support net zero heat.
Switching off analogue signals was legislated in 2001 and the whole telecoms industry got behind the ‘ambitious’ timetable. The switch off took 6 years to plan and then five years to complete the transition. Taking 11 years in all. That was just for our TVs.
Our analysis assumed that an equivalent ‘switch over’ to hydrogen or ‘switch off’ of fossil gas starts in 2035, giving a 10-15 year transition period by 2050. A transition that starts in 2035 would need heat pathway decisions to be made well before that date.
2035 is 15 years away. This is the lifetime of a good boiler.
Planning for the heat transition will be easiest if it focuses on a single solution, either all electrification or hydrogen. This would mean that policies can be applied to the vast majority of homes and businesses and the networks can make blanket decisions about investment.
However, another option is that heat decarbonisation will involve a patchwork of different approaches depending on where you are located, allowing use of local resources, reflecting different housing types or other social factors. This was explored in the Core Hydrogen scenario and it would require heat pathways to be decided at a local and regional level. Importantly for the networks, this means they would need to make specific investments in specific locations.
What is clear, however, is that net zero heat is something we need to start planning for now. This should start with a national heat strategy involving both distribution networks in a consultation process that that feeds into local heat decision making.
In the absence of the former, local areas and the distribution networks (and integrated DFES analyses) can start by helping people understand the options for decarbonised heat locally. It is important also to start work on the ‘no regret’ actions such as new building standards, supporting energy efficiency and transitioning existing off-gas areas, as explored in Regen’s decarbonising heat paper launched this year.
Decarbonisation of heat will be a logistical exercise of huge complexity, which is likely to require as much time to plan and prepare as it will to transition. We may think of net zero as the (relatively) distant future, but in reality, it is not so far away.
"The UK's commitment to net zero by 2050 means that in 30 years’ time, we will need to have stopped burning unabated fossil fuels, and this truly seismic change will reinvent our relationship with energy. The energy networks, both electricity and gas, will be fundamental to supporting this transition. This net zero scenario analysis helps them understand and plan for how this transformational change could impact their operations in the short, medium, and longer term.”
Poppy Maltby, senior project manager, Regen
"Although all regions will contribute to the net zero target, it is clear that each part of the UK will have different priorities, opportunities, and pathways. This integrated scenarios process for our South Wales licence area allows us to understand how the decarbonisation pathways might progress in South Wales and how the distribution energy networks may be interacting in the future.”
Ben Godfrey, network strategy manager, Western Power Distribution
"This project explores a range of options for decarbonising heat in South Wales. Our view is clear: making use of our existing safe and reliable local gas networks is key to decarbonising not only home heating, but heavy industry too. Green gases like hydrogen and biomethane, alongside Smart Hybrid Heating Systems, will help Wales and the UK meet our Net Zero targets, while delivering what people want and need: energy that is safe, reliable and sustainable.”
Chris Clarke, energy strategy director, Wales & West Utilities
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