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©2014 Energy Technologies Institute LLP The information in this document is the property of Energy Technologies Institute LLP and may not be copied or communicated to a third party, or used for any purpose other than that for which it is supplied without the express written consent of Energy Technologies Institute LLP.This information is given in good faith based upon the latest information available to Energy Technologies Institute LLP, no warranty or representation is given concerning such information, which must not be taken as establishing any contractual or other commitment binding upon Energy Technologies Institute LLP or any of its subsidiary or associated companies.

Modelling the UK Energy System: Practical Insights for Technology Development & Policy MakingJo Coleman, Strategy Director

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Energy System Modelling Environment -overview

Power

Buildings

Transport

Industry

Infrastructure

Demand scenarios

Energy resources

Technologyprofiles

Global parameters

Energy systemblueprints

A national energy system design tool, integrating power, heat, transport and infrastructure

Modelling approachLeast cost optimisation (policy neutral)Back-casting from 2050Probabilistic treatment of uncertaintySpatial & temporal factors

Informed by ETI members/advisors

Internationally peer reviewed

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ESME: in use by the ETI, it’s members and partners

• ESME developed to inform technology development choices and targets

• ESME used to inform policy work by DECC and CCC on a range of issues

• Individual Members are developing own versions for specific countries of interest

• At Members request, ETI has developed an EU prototype

• Academic research projects ongoing (UCL)

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Informing policy to underpin market developments

UK and InternationalAdvisory boards with ETI staff members

Data as per October 2013

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0

100

200

300

400

500

600

No Targets Perfect lowcost route

Practicallow cost

route

No buildingefficiencypackages

No Nuclear No CCS No Bio No OffshoreWind

No CCSNo Bio

No nuclear

No building packages

No offshore wind

Some technologies appear more valuable than othersPoor system optimisation doubles the cost of a 2050 UK low carbon energy system

Additional cost of delivering 2050 -80% CO2 energy system NPV £ bn 2010-2050

1% of 2050 GDP

1% of 2050 GDP

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CCS is high value as it creates optionsapplication of the same infrastructure for power, industry, enabling bioenergy usage and H2 production

ETI energy system modelling points to ‘energy system-wide’ value of CCS extending beyond low carbon electricity generation

‘Negative emissions’

Enables continued use of fossil fuels where very expensive to replace

Low carbon electricity from fossil fuels(DECC Demos)

CCS with biomass(Drax programme)

Gasification applications(ETI demos)

Flexible low carbon fuels (hydrogen, syngas)

Low carbon energy diversity, portfolio of flexible low carbon energy vectors, option value & robustness in meeting carbon targets

CCS on industrial emissions (To follow)

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Infrastructure challenges predominantly mid and downstreamMean Reference Case 2050

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Removing a key option leads to very different infrastructure requirementsNo CCS Sensitivity 2050

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Preparedness – What is required?Innovation in business models, cost reduction and to build investor confidence

• Continue to drive efficiency measures – Homes, Cars, Industry

• Prove key business models at scale i.e.– Nuclear plants 1 and 2– 2 CCS full chain projects built, backbone for

further development– 2% of housing stock (500,000 houses) in whole

house retrofit, including heat supply– 2% of UK car sales (40,000) alternatively fuelled

cars sold per year– Bioenergy value chain

• Drive down costs– Offshore Wind, Tidal, Wave

• Develop knowledge base for choices i.e.

– Develop understanding of issues related to new energy vectors ie H2 infrastructure, transport, metering, safety regulations

– Bioenergy scientific evidence and regulation

– Gas grid repurposing /decommissioning

• Engage stakeholders– Consumers, voters, public

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Conclusions

• The transition is affordable but poor system optimisation easily doubles the cost• CCS and bioenergy are key enablers; national decisions by 2025 are central to the design

of the energy system• There is much to be done to prove the credibility of these choices• Preparedness involves developing options and understanding trade offs, proving the

technical operating business and regulatory models at scale• Today, a broad range of alternatives needs to continue to be developed but wide scale

rollout of multiple alternatives and their supporting infrastructure is unaffordable• By 2025 we need to have agreed these choices and have a plan for delivering the

required infrastructures– Plans for withdrawing from infrastructures that will not be required by 2050 are also

required

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For more information about the ETI visit www.eti.co.uk

For the latest ETI news and announcements email info@eti.co.uk

The ETI can also be followed on Twitter at twitter.com/the_ETI

Energy Technologies InstituteHolywell BuildingHolywell ParkLoughboroughLE11 3UZ

For all general enquiries telephone the ETI on 01509 202020.

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Electricity system fundamentally different with or without CCSUK electricity generation capacity doubles & increase is entirely renewables

Hydrogen

Renewables

CCS

With CCS No CCSUK electricity capacity

Gas

with CCS No CCS

NuclearCoal

Gas

NuclearRenewables

Interconnectors

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Electricity system fundamentally different with or without CCSTrajectories alter from mid 2020’s

Hydrogen

Renewables

Gas CCSCoal

UK electricity capacity

Gas

NuclearCoal

Gas

NuclearRenewables

Interconnectors

With CCS

No CCSfrom 2025 the UK is on a trajectory to 2050 …..

2030+ 20%

2040+ 80%

2050+ 100%

No CCS

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-20

-10

0

10

20

30

40

50

2030 2040 2050

Widespread CCS delivers £10-30bn p.a. UK system level cost saving from 2030

Net saving£13bn

Net saving£20bn

Net saving£32bn

£bn

Transport

Power and conversion

Infrastructure

Buildings and heat

Fuel and resources

Industry

CCS increases need forFuelSite spaceOperational resources

CCS reduces need for more expensive hybrid vehicles

Building retrofits

Alternative (intermittent) power generation capacity and associated transmission infrastructure

Annual cost saving

Annual cost penalty