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Appendix 6: Energy Sector Detailed Report What This Area of Work

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Appendix 6: Energy Sector Detailed Report What This Area of Work Appendix 6: Energy Sector Detailed Report What This Area of Work Covers The focus of this area of work is: • Energy conservation and energy efficiency; • Increasing levels of low carbon and renewable energy generation and storage; • Facilitating the transition to a smart, flexible energy system. A zero-carbon world is predominantly electric. Power generation from clean renewable and low carbon sources will need to accelerate to support the increase in electrical demand resulting from the electrification and decarbonisation of heat and transport. Due to the increased role of electricity, the existing capacity issues on the distribution network will need to be addressed. A whole systems approach to energy is required, integrating energy conservation, efficiency, heat, power and transport supported by a smart, resilient and flexible grid network with greater participation from consumers. The transition to a zero-carbon economy can address the energy trilemma (security of supply, affordability and environmental sustainability), making the UK’s energy system: • Integrated: The energy system needs to be smart, resilient and secure, • Affordable: The energy system will be affordable, to alleviate fuel poverty and allow businesses to be competitive, • Zero carbon: The energy system needs to decarbonise by 2050 to meet legally binding targets. Local authorities are in a key position to enable the transition and to demonstrate leadership and we have the following recommended outcomes for Somerset: Page 1 of 30 • DEVELOP AND DELIVER AN ENERGY PLAN FOR SOMERSET- ROADMAP TO DECARBONISING THE ENERGY SYSTEM IN SOMERSET. WHOLE SYSTEMS APPROACH (BUILDINGS, HEAT, TRANSPORT AND POWER GENERATION). • LOCAL AUTHORITY ENERGY PERFORMANCE IS SMARTER, MORE EFFICIENT AND ELIMINATES THE USE OF FOSSIL FUELS FOR HEATING AND TRANSPORT BY 2030 (ESTATE AND OPERATIONS) • 100% OF LOCAL AUTHORITY ENERGY DEMAND IS MET THROUGH LOCALLY GENERATED AND LOCALLY OWNED LOW CARBON AND RENEWABLE ENERGY BY 2030 (ESTATE AND OPERATIONS). • SOMERSET AUTHORITIES WILL LEAD BY EXAMPLE THROUGH OPTIMISING THE ENERGY PERFORMANCE OF THEIR ESTATES AND OPERATIONS THROUGH INVESTMENT IN ENERGY CONSERVATION, EFFICIENCY, RENEWABLE ENERGY GENERATION AND SMART ENERGY INITIATIVES. • LOW CARBON & RENEWABLE ENERGY GENERATION, STORAGE AND SCHEMES SUPPORTING SMARTER GRID FLEXIBILITY ARE DELIVERED ON LOCAL AUTHORITY LAND AND ASSETS. • SOMERSET WILL SUPPORT COMMUNITY ENERGY INITIATIVES AND EXPLORE WHAT PRACTICAL MEASURES CAN BE OFFERED TO SUPPORT THESE ORGANISATIONS. ENERGY • THE ELECTRICITY GRID IS SMARTER, MORE FLEXIBLE AND PEAK DEMAND IS MET THROUGH LOW CARBON AND RENEWABLE ENERGY, ENERGY STORAGE AND IMPROVED DEMAND SIDE RESPONSE. • ENERGY INFRASTRUCTURE IN SOMERSET IS ADAPTED AND RESILIENT TO THE PROJECTED IMPACTS OF CLIMATE CHANGE. • A SIGNIFICANT PROPORTION OF ELECTRICITY DEMAND ACROSS SOMERSET IS MET BY LOCALLY GENERATED AND LOCALLY OWNED LOW CARBON AND RENEWABLE ENERGY BY 2030, MOVING TOWARDS 100% AND THEN BECOMING A NET EXPORTER BY 2050. • OUR PLANNING POLICIES AND STRATEGIES CREATE A POSITIVE AND PROACTIVE ENVIRONMENT TO ENABLE RENEWABLE GENERATION. • HEAT DEMAND IS REDUCED AND DECARBONISED AS FAR AS POSSIBLE BY 2030 AND FULLY BY 2050. • THE CONSTRUCTION OF THE HINKLEY POWER STATION CREATES A POSITIVE DEMONSTRABLE LASTING LEGACY IN TERMS OF THE LOCAL ECONOMIC BENEFITS AND SKILLS AND SUPPLY CHAIN GROWTH THAT CAN DIRECTLY CONTRIBUTE TO THE OUTCOMES OF THIS STRATEGY. Page 2 of 30 Introduction “The energy sector is transforming to a future system that will be unrecognisable from what we know today” (1). The energy system of the future will be smart and flexible. It will keep energy costs to the consumer low; keep the costs of energy infrastructure investment down; ensure better use of existing assets through smarter management and integration; use innovative smart technology; and meet our decarbonisation obligations (2). A whole systems approach to transforming the energy system is required, integrating energy conservation, efficiency, heat, power and transport supported by a smart, resilient and flexible grid network with greater participation from consumers. Each of the topics analysed in this Strategy could be considered individually, with projects arising from each taken forward in isolation, but there are major inter-dependencies and opportunities that would be missed by taking this approach. A whole systems approach would enable these opportunities to be better exploited and potentially reducing delivery costs and improving efficiency through a strategic, rather than piecemeal, approach. Energy Systems Catapult has developed the concept of Local Area Energy Plans which are co-produced by the key energy stakeholders and local authorities in a local area (3) .A key outcome will be to develop and deliver an Energy Plan with the aim of providing a detailed roadmap to decarbonising the energy system within Somerset, taking a whole systems approach to energy (buildings, heat, transport and power generation), working with key stakeholders to develop and deliver the plan and most importantly linking local planning policy to the energy network’s strategic planning process (4). In light of the Covid-19 crisis, the accompanying recession and the economic stimulus that will be necessary to recover, there is an opportunity for Somerset to re-prioritise and stimulate the economy through investment in renewable energy and energy efficiency to deliver our carbon neutral goals. Within the region we have major players in the energy sector who we should work closely with to develop projects and proposals further through to delivery to address some of the challenges this paper presents to deliver an optimal outcome for Somerset. Close working relationships with Western Power Distribution (WPD), Scottish and Southern Electricity Networks (SSEN), Somerset Community Energy (SCE), community energy groups, the University of Exeter Centre for Energy and the Environment, Regen, The Centre for Sustainable Energy (CSE), the South West Energy Hub, and others will be vital to achieving success. In addition, the HotSW Local Enterprise Partnership (LEP) has reframed its Local Industrial Strategy in relation to delivering clean growth(5)and it will be important for us to engage closely with the LEP Page 3 of 30 in how it turns this ambition and the Joint LEP Energy Strategy (6) into on the ground delivery through its emerging Energy Strategy Action Plan. Workstreams Decentralisation and the Transition to a Smart Energy System Analysis of the Current Situation Historically, electricity generation has been delivered through coal, gas, oil and nuclear power stations located in key locations around the country, connected to the transmission network. Generation was very rarely connected to the distribution networks which were traditionally designed for the optimal delivery of power from the transmission network to end users. Figure 1 Traditional topology of the UK electricity network, with power delivered from transmission-connected generation to customers. (7) Many large transmission connected power stations have closed with more expected to close in the coming years. This generation capacity has been replaced with smaller and in some cases renewable forms of electricity generation. Many of these new generators have been connected to the distribution network. (8) Page 4 of 30 Figure 2 Changing topology of the UK electricity network, with more low carbon technologies and distributed generation, leading to bi-directional power-flow. (9) What Do We Need To Plan For? To meet the UK’s Net Zero 2050 target, it is critical to decarbonise heat and transport. This will include the electrification of transport and heating, with the energy to support this generated from renewable sources. This will create additional demand and the need for greater flexibility on the distribution network. Because of the changes in how energy is produced and consumed, the result is a less centralised and more complex network.(10) Distribution Network Operators (DNO) have a greater need to forecast and actively manage energy flows across the network. The national electricity transmission system has traditionally had this level of active management coordinated by the Transmission System Operator, National Grid. The principles of how a DNO can do this at distribution level therefore have some foundation. This shift in DNO roles and responsibilities will require a transition to Distribution System Operator (DSO).(11) A smart grid network is the vision for a modernised electricity system where information and communications technology is utilised by DSO’s to monitor and actively control generation in near real time, powered by local clean energy sources. Within a smart grid, consumers will play a more active role in balancing demand, for example reducing usage through the use of smart devices, energy efficiency, generating electricity through roof top solar, discharge electricity from batteries, increasing renewable power capacity connected to the grid and reducing energy during peak hours. Smart grids will enhance energy security and integration of low carbon technologies and take the UK a step further towards an affordable, low carbon energy system and reduce the overall costs for consumers. Page 5 of 30 “Anyone who pays an electricity bill contributes to the cost of running the network, so a more efficient and flexible network will provide better value for money. The alternative would be to spend millions on upgrading the network infrastructure to
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