Issues for GB Energy Policy

and the IPCC

Lecture to DTI Energy

Engineering Catherine.mitchell@exeter.ac.uk

23 October 2018

2

Overview

• IPCC and targets

• What should a Government think about when it puts

in place a target?

• CCC assessment of GB energy policy relative to CC

Budgets

• GB energy policy: smart and flexible

• GB energy policy issues

• Whole System energy policy is essential

• Obvious differences between GB and Denmark

3

The Globe

has to

reach net

zero CO2

emissions

by 2050 –

IPCC

Special

Report http://report.ipcc.ch/

sr15/pdf/sr15_spm_fi

g1.pdf

IPCC AR6

will be

2019-2021

4

Reaching Net

Zero by 2050 is a

major challenge.

The Globe has to

‘step up’

immediately.http://report.ipcc.ch/sr15/pdf/sr15_spm_fi

g1.pdf

5

There are multiple technological ways to meet GHG

reductions – models do not tend to take notice of whether

people will accept them or not http://www.ipcc.ch/report/sr15/

6

Energy policy is just

one aspect of public

policy goals. Different

technological

pathways will lead to

different societal

trade-offs and

synergies. Decision-

makers have to think

in terms of overall

society good rather

than one ‘best’ energy

policy. This is an

example of

Sustainable

Development Goals

(SDGs). http://report.ipcc.ch/sr15/pdf/sr15_spm_fig4.pdf

7

UK CCC Carbon Budgets via the 2008

CC Act (this is for 2 degrees)

8

How is Britain doing ? https://www.theccc.org.uk/wp-

content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

9

CCC argues

for 4 basic

policy

messages:

Support simple low cost

options

End the chopping and

changing of policies

Commit to effective

regulation and enforcement

Act now

https://www.theccc.org.uk/wp-

content/uploads/2018/06/CCC-

2018-Progress-Report-to-

Parliament.pdf

10

CCC also highlights the Policy Gap https://www.theccc.org.uk/wp-content/uploads/2018/06/CCC-2018-Progress-Report-to-Parliament.pdf

11

http://projects.exeter.ac.uk/igov/wp-content/uploads/2018/10/Direction-setting-for-energy-system-transformation-

Matthew-Lockwood.pdf

12

In many ways,

GB Government

has a clear

energy policy:

‘smart and

flexible’

13

There is a shift towards distributed generation http://projects.exeter.ac.uk/igov/wp-content/uploads/2018/05/Lockwood-Innovation-and-govenance-in-the-GB-energy-system-

Karlsruhe.pdf

Year DG capacity (GW)

Peak demand (GW)

GB 2016 28 61

Germany 2015 89 86

California 2016 10 61

Rep. of Ireland 2017 1.9 5

14

British direction-setting in practice http://projects.exeter.ac.uk/igov/wp-

content/uploads/2018/05/Lockwood-Innovation-and-govenance-in-the-GB-energy-system-Karlsruhe.pdf

• Strong backing for carbon pricing (EU

ETS, Carbon Price Support under

EMR)

• Support for renewables under pressure

from EU

• Mechanism reformed to allow support

for new nuclear (CfD FiT via EMR)

• Capacity Market (for CCGT)

• 2016: support rates for solar PV cut by

64-85% and onshore wind removed

from support framework; small scale

FiT about to go for solar

• CfD FiT now solely for offshore wind

and nuclear

• ‘Subsidy free’ renewables not yet

materialised

• Ineffective energy efficiency measures

15

Direction-setting: case study of flexibilityhttp://projects.exeter.ac.uk/igov/wp-content/uploads/2018/05/Lockwood-Innovation-and-govenance-in-the-GB-energy-

system-Karlsruhe.pdf

• No agreed pathway for heat decarbonisation

• No targets for new flexibility resources (EVs,

grid-scale storage, DSM, heat pumps/storage)

• ‘…we think there is significant scope for these

and other system requirements to be addressed

through market-based approaches. In

particular, we see value in transparent and

integrated markets. We expect to see such

approaches used wherever it is most efficient to

do so.’ (BEIS/Ofgem 2016: 76-77)

• Policies in some areas (grants for EVs (just

cut), RHI support scheme for heat pumps)

defined by budgetary input not outcomes

• Plan but no detailed vision with timelines

• Government role is enabling or facilitating

change rather than delivering

16

Is support for nuclear long-term & sustainable? http://projects.exeter.ac.uk/igov/wp-content/uploads/2018/05/Lockwood-Innovation-and-govenance-in-the-GB-energy-system-Karlsruhe.pdf

• System compatibility of nuclear and renewables (max. summer

demand ~36GW, renewable capacity 35.7GW in 2016)?

• Cost?

• Societal support?

0

10

20

30

40

50

60

70

80

90

100

%

On-shore wind Solar PV Nuclear

Source: BEIS Public Attitude Tracker

Percentage supporting technology

17

Lots of activity around economic regulation – fits

market approach http://projects.exeter.ac.uk/igov/wp-content/uploads/2018/10/Direction-setting-

for-energy-system-transformation-Matthew-Lockwood.pdf

RIIO2 (inc.ED2)

Access and forward charging review

Half hourly settlement

Targeted Charging Review

Open Networks project (TDI, DSO…)

Smart Flexible Energy reforms (storage, DSR aggregation)

ESO reforms

Supplier hub consultation Unlocking the

capacity of electricity networks

Sandbox, Innovation Link, NIA/NIC etc.

Smart charging standards (AEV Act 2018)

NG System Needs and Product Strategy

NG Power Responsive

Next day switching

18

…so ensuring coordination and consistency is

a huge task…, and does not happen http://projects.exeter.ac.uk/igov/wp-content/uploads/2018/10/Direction-setting-for-energy-system-transformation-Matthew-

Lockwood.pdf

RIIO2 (inc.ED2)

Access and forward charging review

Half hourly settlement

Targeted Charging Review

Open Networks project (TDI, DSO…)

Smart Flexible Energy reforms (storage, DSR aggregation)

ESO reforms

Supplier hub consultation

Unlocking the capacity of electricity networks

Sandbox, Innovation Link, NIA/NIC etc.

Smart charging standards (AEV Act 2018)

NG System Needs and Product Strategy

NG Power Responsive

Next day switching

19

Clear vision of future system• Required functions, linked

to policy goals• Institutional arrangements

19

Would be made easier if there is clarity and agreement

on where we are trying to get to http://projects.exeter.ac.uk/igov/wp-

content/uploads/2018/10/Direction-setting-for-energy-system-transformation-Matthew-Lockwood.pdf

RIIO2 (inc.ED2)

Access and forward charging review

Half hourly settlement

Targeted Charging Review

Open Networks project (TDI, DSO…)

Smart Flexible Energy reforms (storage, DSR aggregation)

ESO reforms

Supplier hub consultation Unlocking the

capacity of electricity networks

Sandbox, Innovation Link, NIA/NIC etc.

Smart charging standards (AEV Act 2018)

NG System Needs and Product Strategy

NG Power Responsive

Next day switching

20

Example of an outcome without coordination

and coherence – solar pvhttp://projects.exeter.ac.uk/igov/wp-content/uploads/2018/10/Direction-setting-for-energy-system-transformation-

Matthew-Lockwood.pdf

21

Differences between Denmark and UK Matthew Lockwood (2015) http://projects.exeter.ac.uk/igov/wp-content/uploads/2015/06/ML-Danish-model-of-

regulation1.pdf

• Geography is different

– Easier to be interconnected

– Well developed regional pool market design

• Different culture / history / resources

• Political and decision-making process much more

consensus - based

22

IPCC issues (if have time) Jan C. Minx, et al (2017) Environmental Science and

Policy 77 (2017) 252-259, Learning about climate change solutions in the IPCC and beyond.

23

Publications assessed versus proportion

in IPCC reports Jan C. Minx, et al (2017) Environmental Science and Policy 77 (2017) 252-259,

Learning about climate change solutions in the IPCC and beyond.

24

References

• BEIS/Ofgem (2016) A Smart, Flexible Energy System: A call for evidence,

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/

576367/Smart_Flexibility_Energy_-_Call_for_Evidence1.pdf

• BEIS/Ofgem (2017) Upgrading our Energy System: Smart Systems and Flexibility Plan,

https://www.ofgem.gov.uk/system/files/docs/2017/07/upgrading_our_energy_system_-

_smart_systems_and_flexibility_plan.pdf

• Digest of UK Energy Statistics (DUKES) (2017)

• Energy UK (2016) Pathways for the GB Electricity Sector to 2030 https://www.energy-

uk.org.uk/publication.html?task=file.download&id=5722

• Institute for Engineering and Technology (IET)/Energy Systems Catapult (2017) Future Power

System Architecture Project 2: Synthesis Report

https://www.theiet.org/sectors/energy/resources/fpsa/fpsa-future-system-challenges.cfm

• Regen (2017) Energy Storage: The next wave – Growth prospects and market outlook for energy

storage

• Regen (2018) Market insight series: Harnessing the electric revolution

• Matthew Lockwood (2015) http://projects.exeter.ac.uk/igov/wp-content/uploads/2015/06/ML-

Danish-model-of-regulation1.pdf

• Jan C. Minx, et al (2017) Environmental Science and Policy 77 (2017) 252-259, Learning about

climate change solutions in the IPCC and beyond.

25

Annex

• IGov Governance Framework in process of being

updated

– http://projects.exeter.ac.uk/igov/

– Our 2016 fit-for-purpose governance framework

document: http://projects.exeter.ac.uk/igov/paper-gb-

energy-governance-for-innovation-sustainability-and-

affordability-2/

26

Current GB Governance System – ‘value’ suits

‘old’ fossil-based – incumbency and inertia

are barriers to change

27

IGov Fit-for-Purpose GB Energy Governance Framework http://projects.exeter.ac.uk/igov/wp-content/uploads/2017/10/SYS-Copenhagen-27-October-2017.pdf

28

Overview Findings of IGov1 – 4 central dimensions

required for energy system transformation

Transfo

rmatio

n

Flexible, coordinated

operation & design

ReformingRegulation

Customer Focused

Transparent & legitimate

policymaking / institutions

29

Customer Focused

• Customer wishes at center, and policies built around customer proposition

• Meaningful consent• Engagement• Trust, equity, legitimacy and

democracy• Tariffs, prices and bills• PSO

30

Transparent & legitimate policymaking/institutions

• Coherent, legitimate , coordinated decision making (including incorporating CCC Advice via institutions)

• Less BEIS delegation, more SoS Direction (ie IISO v Ofgem)

• Consensus Building Body (or a body which coordinates intellectual, political and social debate)

• Market Monitor and Data Body

31

Flexible, coordinated operation & design

32

Flexible, coordinated operation & design

• Service should be able to sell to whom they want (national or local)

• Customer should be able to buy from whom they want (national or local)

• IISO has responsibility to develop / balance infrastructure and markets to meet CCC targets, and to coordinate and integrate across heat and electricity

• DSP are coordinators, balancers and integrators of local areas and markets, regulated through PBR

• Bottom-up / Area system optimisation with TO increasingly balancer

• IISO DSP coordination• Governance dimensions all need to encourage this, not

least for cost benefits

33

Reforming Regulation

• New Ofgem duty to meet CCC carbon budgets; stripped back to economic regulator

• More performance based regulation (ie more output focused)

• DNO to DSP; SO to IISO• Restructured RIIO2, enabling decarb of

electricity by 2030 and progressive ISSO• Closer link between network operation,

market design, data and public policy goals• Access to, and transparency of, data

34

Distribution Service Providers should be at the

heart of regulatory reform and electricity

decarbonisation: ‘active’ ; RIIO way behind

DNO DSO DSP

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