Environmental Sustainability in Energy Delivery

Steve WallaceHead of Climate Change and Environment

Energy Sustainability

Affordability(fuel poverty)

Environment

Security of supply

Where does National Grid fit?

The environmental challenge

Leadership in energy policy

Environmental impact from goods and services that are provided to us

Providing the infrastructure to

decarbonise society

Environmental impact from

the goods and services we

provide

Reducingsociety’s emissions

Our role in decarbonising the economy

Impact from our services and how we and our supply

chain operate

Sustainable, low carbon business

Emissions and resource efficiency

5

Wind, nuclear & CCS dominant at ~25GW – 30GW each

~20GW other renewables

~15GW interconnection

~20GW embedded generation

LNG & continental imports

Bio-methane

Where will our energy come from in 2050?

Gas CCGT Coal CCS

Nuclear Wind Renewable

Interconnector CHP Other

Generation capacity mix

~115GW

~50% from electricityat ~15g CO2(e) / kWh

~35% from gasat ~185g CO2(e) / kWh

~15% from oilat ~245g CO2(e) / kWh

6

Why do we need gas?

~1,000 GWh / dayElectricity demand

(avg. November day)

~4,000 GWh / dayGas demand

(avg. November day)

Energy use is ‘peaky’…Full electrification of heat:what you have to believe…

~150 GW of heat electrified =

Nuclear? ~45 sites at 3.3GW / site

Renewables?~30,000 wind turbines at

5MW / turbine

CCS? ~75 sites at 2GW / site

Solar PV? ~40m homes at 17m2 / home

Inter-connectors?

~150 BritNed’s at 1GW each

…even after significant energy efficiency

0

1,000

2,000

3,000

4,000

1 62 122 182 242 303 363

2050 electricity (inc. electrified transport) 2050 heat

GWh

Days

Peak 30 days

3,400

3,600

3,800

4,000

7

The transmission delivery challenge (2020)

France

Netherlands

Belgium

Norway

Ireland

France

existing electricity network

potential wind farm sites

potential nuclear sites

interconnectors

Infrastructure challenge

10’s km of new cable tunnels100’s km new HV cable

10’s new Substations100’s new transformers

100’s km of new OHL circuits1000’s km full refurbishment

Nearly 1000km of new transmission pipe

new compressor stations new compressor units

2000 km gas distribution mains replacement per year

Biogas connections….

Right Footprint – The environmental sustainability challenge

Not exceeding the ability of the planet to deal with our emissions without reducing its capacity to do so in the future

Only using replaceable (organic) resources at less than the rate that they can be replaced and without damaging biodiversity

Only using irreplaceable resources in a way that retains their value and ensures that they remain available to future generations

Super sustainability: Put more back than we take out – add to natural capital and repair the damage done by previous generations

Guiding Principles

Operating as far as possible within closed loops, conserving and enhancing natural resources

Assigning a proper value to external impacts

Integrating the concepts and tools for environmental sustainability into decision making in an organisation-wide culture of sustainability

Assessing aspects and impacts to focus on those of greatest importance to business and stakeholders.

Openly reporting performance and being held accountable

Working with Government and civil society to create a regulatory and legal environment that rewards sustainable decisions

Priority – Greenhouse Gas Emissions

Climate Change Strategy

Reshaping energy markets

Agents for changeEnsure National Grid is a sustainable, low

carbon business

Adaptation‘greening’

the business2020 and

2050 targets

•EE programs and educating customers

•Fleet procurement, etc•Employee engagement

•Carbon Budgets•Executive Comp•Carbon price

•US and UK task forces

•Supporting Renewables•Promoting decoupling•Expanding energy efficiency

Valuing External Impacts (GHG)

Price need to deliver 80% reduction across

society £52/$83 per tonne

CO2(e)

Regulator supported price and incentives

Leadership information to inform debate based on lost opportunities

Investment appraisal assessment

Investment appraisal assessment and fund

Carbon price

Linear to Circular Assets

Manufacture Into products

Procure Stores

inventory Issue to site

Projectdelivery

Asset life

Consumption of resource

Raw Materials

£/$ value

Removal from service

RefurbishRecycleDisposal

(to be avoided)collect Reuse

Loss of valuable resource

Grey spares

Refurbishmentcentres

Valuepreservation

Commodityavailability

risk

Example – Meter Recycling

Community Investment in local industry / community Employment and development opportunities via REMPLOY and young offender programme Localised sub contracted activities

Reputation Best practice shared with industry players, energy suppliers and internal stakeholders Visible Environmental investment in support of National Grid PoliciesRealisation of commercial opportunities for National Grid Visible support of I&D agenda Internal recognition as centre of environmental best practice

Performance Elimination of hazardous materials to landfill Reduction in carbon emissions £k100’s PA Increased revenue from recycled material £m PA savings from meter refurbishment Savings of circa £k10’s PA from reuse of salvaged components

Resources Expanded scope of reclaimed materials Salvaged components reintroduced into supply chainAsset lifecycle optimisedReduction in supply side resourcesIncreased yield via meter refurbishmentEfficient use of existing National Grid estateDevelopment of employees

Virgin Aggregate

Approved Recycled Aggregate

Landfill

Recycling processExcavation

Reducing volume of excavation by no dig or low dig options

Residual waste

Recycled aggregate to

approved specifications

Example - Closing the loop in spoil

Ideal case is to stop doing the red and minimise the green per unit of main replaced

Current performance: 90% recycling road spoil, saving Ca. £6m in landfill tax

Striving for Better Regulation

Successful collaboration between Environment Agency and industry

Better regulation initiative

Delivered a solution not a problem

Delivered approximately £1m in savings

Environmental liability managed

Materials re-use of 66%

Partington(Hub)Runcorn

WarringtonPrescot

Employee Engagement