Jaspreet Singh
Senior Consultant - Energy, Decarbonisation Strategy and Deal Advisory
Future Energy Scenarios 2022: Key points
Earlier this week, National Grid ESO released the Future Energy Scenarios 2022 (FES 2022). We discuss some of the top highlights from the document.
Earlier this week, National Grid ESO released the Future Energy Scenarios 2022 (FES 2022).
The Future Energy Scenarios 2022 document has been highly anticipated. It follows the recently released British Energy Security Strategy and lands against the backdrop of the rising cost of living (including increasing energy costs), and climate change concerns (with UK temperatures hitting 400C during the week of its release).
FES 2022, as was the case with its predecessors, continues to set credible pathways for the UK to achieve Net Zero by 2050, along with the UK government’s commitment to decarbonising the electrical system by 2034. However, FES 2022 deviates by clearly re-naming the previously labelled “Steady Progression” scenario, which failed to reach net zero, to a newly named scenario: “Falling Short”. This clearly shows that National Grid ESO believes that failing to achieve net zero by 2050 would not be an acceptable outcome.
Highlights
- The forecasted 2050 electricity demands are higher than FES2021 - largely due to increased electrification of HGVs and higher fuel-switching expectations (towards electrification and hydrogen) in industrial & commercial sectors, as stated in the Industrial Decarbonisation Strategy (released in 2021).
- Data centres were modelled explicitly for the first time as their demand could grow tenfold by 2050.
- Coal-fired generation plants are assumed to come off the system by 2024 in all scenarios.
- The ‘Consumer Transformation’ scenario estimates a maximum capacity of just over 15 GW of nuclear. National Grid envisions this number could grow if the assets could provide energy more flexibly in response to an expected dynamic renewable and demand profile.
Renewables
- Solar PV: c.3 GW rise in installed capacity is assumed in the Leading the Way scenario (i.e., c.92 GW by 2050).
- Offshore wind: The speed of installation is assumed to increase, to reflect the government’s new target of 50 GW by 2030. However, ‘Leading the Way’ is the only scenario that reaches this ambition. In FES 2022, offshore wind sees a lower level of maximum installed capacity by 2050 (as projected under ‘Consumer Transformation’), when compared to FES 2021.
- Onshore wind: a c. 5 GW rise in installed capacity is forecasted in the ‘Leading the Way’ scenario in 2050 (i.e. 45 GW)
Additional takeaways
- ‘Leading the Way’ and ‘Consumer Transformation’ see the highest electricity interconnector capacity, c. 27 GW and c.22 GW respectively in 2050.
- 'Leading the Way' meets the target of 10 GW of hydrogen production by 2030 set out in the British Energy Security Strategy. All net-zero scenarios anticipate between c.18 – 22 GW of hydrogen installed capacity by 2050.
- Within the ‘Leading the Way’ scenario, demand side flexibility reduces unmanaged peak demand by over 40% by 2035. EV smart charging, residential thermal storage and industrial and commercial sectors are the largest providers of demand side response.
Electrical Energy Storage
- Technologies considered include pumped hydro storage (which today provides almost all our storage volumes), vehicle to Grid (V2G), Liquid Air Energy Storage (LAES), Compressed Air Energy Storage (CAES) and battery storage. All net-zero scenarios project a demand of more than 100 GWh of storage volume by 2050 (excluding V2G). ‘Leading the Way’ shows a potential demand that is just shy of 200 GWh. V2G could add another c.140 GWh of capacity if its full potential is considered, as demonstrated in the ‘Leading the Way’ scenario.
British Energy Security Strategy Comparison
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National Grid envisions a continued transformation of the current energy market to create a smart, flexible and green energy system. At RPS, we regularly challenge the status quo and work with all our clients to consider a number of whole systems energy solutions. The FES 2022 further helps RPS to continue our narrative on why our clients should consider transformative changes at scale to help reduce their climate impact. We continuously work with our clients to help them understand the technical and economic feasibility of future energy systems and to guide them in making green and profitable investment decisions.
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RPS supports clients with green energy investment, innovation and commercialisation.
With technical experience across the large-scale wind, solar, tidal and hydro, geothermal, energy storage, hydrogen and carbon capture and storage in addition to bespoke ‘behind the meter’ solutions, we’re committed to enhancing global energy security through clean infrastructure that is high yield and low-impact, at scale.
References
[1] Modelling for the FES 2022 scenarios was completed prior to the publication of the British Energy Security Strategy
[2] Data taken from the National Grid Future Energy Scenarios 2021 and 2022.
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