There has been much media speculation on the continuity of the UK’s electricity supply with the possibility of usage getting to within 2% of capacity, meaning the very real prospect of power outages and ensuing consequences. BSRIA and ECA set out to find answers, by bringing together some of the industry’s most knowledgeable experts in an industry seminar. The event looked at the challenges and the possible solutions faced in the coming years in an effort to meet the UK’s energy demand.

The seminar took place at Westminster City Hall, with ECA’s Bill Wright acting as chair. Bill started the event with an overview and referred to a recent episode of the BBC’s ‘Bang goes the theory’ programme. It looked at the recent storms and the effect they had on the energy in people’s homes, but also focused on the bigger picture of what we can do to secure power. The power cuts at Christmas showed how unprepared the nation is to deal with long outages and also highlighted a lack of understanding of the wider picture. Bill introduced the morning speakers; Julian Roberts of Ofgem and Richard Smith of National Grid, to discuss the facts about electricity supply and offer their opinions on what might happen in the future.

Setting the scene

Julian Roberts presented the security of supply, which is currently at considerable risk. In 2010 Ofgem’s Project Discovery highlighted a number of challenges facing the UK’s energy. One of the key challenges is increasing costs for consumers. Some of the fundamental objectives to come from this were affordability and decarbonisation. As analysis in 2012 confirmed, it was clear something had to be done and this includes environmental legislation tackling high polluting plants and investment in wind. Wind generation is growing but there is still not enough to replace coal or to compete with nuclear power. In addition, there is always more risk with wind growth.

Julian did emphasise that the media’s prediction of impending shortages is just one scenario and that there is actually a range of sensitivities that make up several scenarios of the future. He made it clear that though there is uncertainty for future electricity generation there are a number of preventative developments such as the Capacity Market and new investment in renewables. Although the future is unclear, it is not on a set trajectory that the media is currently portraying.

This is something that Richard Smith from National Grid agreed with. As he argued, our industry is a long term one. It is not about looking for a quick fix but rather focusing on developments that are there to make sustainable changes. The biggest objective to protect the supply side is decarbonisation, which is incredibly difficult when electricity is the dirtiest fuel. Another challenge with decarbonisation is that users lack the understanding about how much energy they require. National Grid, like Ofgem, looks at a number of possible scenarios to try to cover all eventualities, such as meeting all Government targets. The scenarios try to track potentials of energy saving technology such as feed-in tariffs and heat pumps; which should make it possible to level the current trajectory.

Richard also highlighted the fact that blackouts are not a new phenomenon. Although the UK suffered dramatically during the 2013 Christmas period, blackouts happen all over the world and can be resolved. He emphasised that in the case of the UK blackouts tend to be caused by bad weather and falling trees. However, the storms of the last winter increased the number of blackouts and drew attention to the impact they can have. Lessons can be learned from this. Politically energy is not consistent and polarisation is expected to continue until the next general election. Although economic growth is predicted for 2014, the presentation questioned whether this will be the sustainable growth needed to enable plans to be implemented for electricity generation.

A key issue that is rarely considered with electricity supply is water. Tim White from Marquis and Lord highlighted the dependency that water supply has on electricity generation and said that it is an issue that needs to be resolved. How does electricity affect water supply? Tim explained that there are two types of impact: volumetric and storage and disinfection. In late 2013 and early 2014 there have already been serious cases reported in parts of the UK. With microbiological zone incidents ranging from eight to nine per blackout, the risks are high. Measures need to be taken to prepare for this. Tim said that although the Government can put in measures such as the Water Safety Plan, he encouraged companies to prepare an emergency plan based on the users of the building and make sure it is stress tested to account for as many eventualities as possible. When considering emergency plans, the risks of water storage should also be considered. Without electricity water runs the risk of stagnation and bacterial contamination. Tim encouraged users to understand the systems employed in water storage as well as looking beyond L8 legislation. Above all he reminded delegates that current government contingency plans do not protect commercial properties, it is up to individuals to prepare for the risks to water when power cuts occur.

Solutions

There are a multitude of possible solutions to the impending problem of electricity generation. It is clear something has to be done to prevent the possibility of power shortages in the future and several possibilities were discussed.

Philip Douglas from DECC introduced the Energy Savings Opportunities Scheme. This is a European Directive which obligates large enterprises to perform energy audits to establish where they are able to save and the measures that can be implemented to allow them to do that. One of the key benefits of ESOS is that it incorporates much more than buildings and also looks at transport and industrial processes.

The consultation for the scheme received a positive response from industry with a wide range of interested parties. The key findings were to keep it simple, add value but to be realistic and to take advantage of current compliance. This is something that DECC has taken into consideration during development and has enabled existing auditors to carry out assessments to minimise costs and allow discretion. Other decisions to be confirmed are to allow disaggregation to enable flexibility and to allow franchises to opt into a group report rather than go through individual audits. A key benefit to the ESOS is that it allows enterprises to really understand their energy usage and to be able to do something about it. Consumer understanding goes some way to keeping the lights on.

Charlie Lewis presented an alternative from DECC, the Energy Demand Reduction which is at pilot stage. He looked at the Capacity Market which is providing financial incentives for companies to save energy, emphasising that companies should be paid to save energy rather than paid to waste it. The pilot scheme of EDR is similar to the Capacity Market in that it is in an auction format providing subsidiaries for lasting reductions, primarily looking at efficiency projects. The pilot is due to start in June 2014 and last for two years. If successful the Energy Act 2013 has the scope to allow the scheme to be fully implemented. Currently £20m is available for eligible companies. To be eligible the company’s bid must be interested in lasting savings and must be relevant to Winter Peak as this is the highest stress period of the year. Installation of the scheme must take place within nine months of project funding and must not be off grid supply or destroying demand. As a pilot DECC wants to be sure that the system works and understand how it can be implemented to a greater extent in the future. The benefits of the pilot for keeping the lights on are ensuring that sustainability is the key to safeguarding security of supply for the future rather than just right now.

Tim Oldershaw of J Brand had a different approach to keeping the lights on than either of the DECC solutions. Rather than looking at it from a national perspective, he viewed it on a much smaller scale and considered what individuals can do at a local level. He pointed out that energy reduction or efficiency doesn’t have to be centrally governed. Options like photovoltaic are available to home owners as well as big companies. Developments have also been made to allow such systems to work off and on grid; meaning that if the grid goes down the building still has access to electricity; ensuring power cuts are more manageable. Voltage optimisation is another option that can prevent the lights from going out. Although at grid level it’s not effective, at local level it works well and can create savings of up to 20%. Other options are available such as intelligent controls to monitor building energy usage and to better control buildings, as well as the use of generators to allow business continuity and safe controlled shut down. Tim’s presentation was an emphasis of what companies can do, rather than relying on government support. Individual planning can’t dramatically influence the national grid but it can better prepare businesses for the worst case scenario.

Jeremy Towler of BSRIA picked up on the intelligent controls aspect of Tim’s presentation and continued with smart solutions to the lights going out. He started his presentation by looking at the five ways in which we can store energy, including electrically and mechanically, but also electro-chemically. He discussed how fast the energy storage market is set to grow as new technology emerges. By 2040 forecasts predict that the proportion of energy stored by these emerging technologies will be proportionate to that of the national grid. With the risks the grid faces in the future the benefits of this energy storage means fewer people will feel the effects of the lights going out. Jeremy also spoke about micro-grids and their benefits, describing them as an island solution due to their autonomy, suited to power disruption management. He also spoke about the support for renewables which needs to be the focus as coal and gas supplies decline.

He looked at how Japan has dealt with power shortages following the closure of nuclear power plants due to earthquakes. He showed that Japan reacted with well thought out plans and a view to becoming more sustainable in the future.

The event concluded with BSRIA ceo Andrew Eastwell speaking at his last event before he leaves his role at the end of April. He said that the future of the UK’s energy market was a concern raised at a BSRIA Council meeting in 2009. He pointed out that many of the issues discussed then still remain today. Solutions were suggested and although some, like smart metering, have taken off, others, like super grids from the Sahara desert, have not. However, he stressed that the industry has an opportunity to provide the solution or to help other sectors understand the need for change. He said that this industry should be educating and offering strategy plans for the worst case scenario. As an industry with valuable knowledge and experience he said that it should be shared and used to help other sectors to prepare for the possibility of the lights going out. Preparation can be a step towards prevention, he concluded.

BSRIA  www.bsria.co.uk