Energy Security in an Uncertain World

Andy BostonTechnical Head, Business Modelling

September 2011

Slide 2Security of Supply Jan 09 Business Modelling

The TrilemmaCarbon

SecurityCost

There has, rightly, been a strong focus on reducing

CO2 emissions

Sustainable

Slide 3Security of Supply Jan 09 Business Modelling

The TrilemmaCarbon

SecurityCost

But security is put at risk by uncertainties at different timescales

Sustainable

Slide 4Security of Supply Jan 09 Business Modelling

Timescales of Threats to Security1 decade 1 year 1 month 1 day 1 hour 1 minute 1 second

DemandExisting demand growth

Insufficient planned build

Enforced closures

Fuel Supply Availability

HV Grid constraints

Long term breakdown

Delays to new build

Short term breakdown Unexpected unit trip

TV pick-upWeather forecast errors

Unexpected circuit loss

Network

Generation

Wind forecast errors

Insufficient flexible dependable plant

New loads

LV Grid constraints Circuit outages

Clim

ate

Change

Reduced inertia

Aging assets

Slide 5Security of Supply Jan 09 Business Modelling

Timescales of Mitigation Measures1 decade 1 year 1 month 1 day 1 hour 1 minute 1 second

Fuel diversity & renewables

Energy efficiency

Grid strengthening

Demand Side management

Automatic disconnectionDS Frequency

response

GeneratorFrequency responseDerogations Opt-outs

Buffer batteries

Legislation

Demand

Network

Generation

New storage

Balancing mechanism

Reserve

Grid warning:NISMs

Voltage reductions

Design improvements

Return mothballed

plant to service

New generationNuclear

CoalCCGT

OCGT

Price Signals

Smart Grids

Constrain Generation

Gre

en h

ouse

gas

em

issi

on re

ducti

ons

Uncertainty Timescale: seconds

Inertia is being removed from the system:Conventional generation has higher inertia than wind

Unit size could increase: EPR at 1600MW up from Sizewell at 1100MW.Need for greater inertia or fast acting response

Slide 6Security of Supply Jan 09 Business Modelling

Generator tripTV pickup

Uncertainty Timescale: minutes to hoursOutput can vary by up to 6% capacity in 10 minutesSo 30 GW wind will need +/-2GW capacity to actively balance in that

timescale

Slide 7Security of Supply Jan 09 Business Modelling

0

2

4

6

8

10

12

14

16 Simulated UK wind output over 1 day at 10 minute resolution

Standard deviation of 10 minute changes = 2.5%

Uncertainty Timescale: hours and daysThere’s a need for very flexible generation to meet sharp peaksThere are periods of over generation where storage can avoid spill

Slide 8Security of Supply Jan 09 Business Modelling

-10000

0

10000

20000

30000

40000

50000

60000

00:30 12:30 00:30 12:30 00:30 12:30 00:30 12:30

Wind

Nuclear

Flexible generation

Tidal (SB)

Spill

Slide 9Security of Supply Jan 09 Business Modelling

Onshore and Offshore output for two weeks in February 06

0

0.2

0.4

0.6

0.8

1

1.2

0

10000

20000

30000

40000

50000

60000

Onshore portoflio

Offshore Portfolio

Demand

Peak 2006Five day period with very little wind. Peak demand for

2006 occurs in middle of this period when output of combined portfolio was 6%

of capacity.

8TWh gap

Uncertainty Timescale: days and weeks

Slide 10Security of Supply Jan 09 Business Modelling

Uncertainty Timescale: Weeks and months

Weather events last a few days. UK wind output varies from <10% to >80% capacity on that timescale.

Note also weekend effect on demand and seasonal variation across the year

0

200

400

600

800

1000

1200

Jan

Feb

Mar

Apr

May Ju

n

Jul

Aug

Sep Oct

Nov

Dec

Fossil (no renewables)

Fossil (with 38% renewables)

RenewablesFirm backup

Dai

ly e

nerg

y (G

Wh)

Slide 11Security of Supply Jan 09 Business Modelling

Uncertainty Timescale: Years

Policy and markets influence generation mix over many years

-

50

100

150

200

250

300

350

400

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Biomass

Wind

Hydro

Gas

Oil

Coal

Nuclear

Wind

Bio

GasCoal

Oil NuclearCCS

Marine

Evolution to diverse energy supply with many technologies

20 years 20 years

10 years

10 years

Summary

There are uncertainties on all timescales from < 1 second to > 4 decadesUtilities have to: Understand the threats Undertake appropriate mitigation Consider the entire supply chain from energy source through conversion

and transmission to utilisation

And have to understand the effects of mitigation at one timescale may impact security of supply negatively at another timescale.

So the solutions are complex and diverse

Slide 12Uncertainty / MEGS Sep 11 Business Modelling