Post: National Grid ESO says more action is needed to reach net zero

National Grid ESO says more action is needed to reach net zero

National Grid ESO has published its Future Energy Scenarios (FES) 2023 report, which sets out credible ways we can achieve net zero by 2050, as well as the government’s target to a decarbonised electricity system by 2035.

Published on 10 July, the report notes that the UK could reach net-zero by 2046 – but only if measures are introduced to reduce investment uncertainty for net zero technologies such as Long Duration Energy Storage (LDES), transport and storage of hydrogen and CO2 , low-carbon dispatchable power and negative emissions technologies.

The report also noted that improved market signals and new distributed flexibility solutions are key to managing a secure, net zero whole energy system at lowest cost to the consumer. Delivery of the required growth in flexibility will depend on key enablers such as market reform, digitalisation and innovation.

The growth of distributed flexibility (flexible energy demand resources, such as storage, EVs, heat pumps and thermal storage, connected at distribution level) is a key enabler of net zero. A market-wide strategy, including government targets, policy support and market reform is required to facilitate the significant growth in distributed flexibility. This can also provide incentives for consumers to provide Demand Side Response, such as smart charging of EVs.

Under the Consumer Transformation pathway, 47GW of electricity storage must be operational and 18GW connected at distribution level. All the pathways suggested by the FSE also require increasing implementation of smart EV charging contributing as much as a 60% reduction in peak demand by 2050. ESO also highlighted the requirement of market reform to provide locational signals that can optimise decisions on the use of flexible energy sources.

Strategic coordination and “whole system energy thinking” is also required to accommodate the increasing levels of renewable energy required for a net zero energy market. To accommodate this the ESO suggested further work is required to: bolster strategic network investment; facilitate a quicker connections reform; and develop a coherent strategy to ensure large electricity demands are located where they can provide the biggest benefit. To achieve the best results under the Leading the Way pathway, a minimum of 119GW of wind and solar must be connected in 2030 (89GW under the other scenarios).

The ESO also recommend action on the large-scale deployment of carbon capture, usage and storage (CCUS) technology in the next ten years. It predicts that no large-scale negative-emissions technology will mature until 2030 at the earliest but said investment is needed now to give technologies like direct air capture the chance to scale post-2030. The ESO also wants the government to look beyond carbon capture and plan in a more joined-up fashion for transport and storage networks.

For industrial and commercial consumers the ESO expects high growth in energy demand in some sectors such as commercial data centres. This could represent up to 6% of GB electricity demand by 2030 from around 1% today, however there remains considerable uncertainty still in the range of the final energy demands for this sub-sector. But it highlights that high energy prices, inflation and low economic growth are likely to suppress energy demand in the short-term. Fuel switching to hydrogen may take place further and faster than previously thought, with take-up expected to accelerate from the late 2020s onwards as subsidised hydrogen supply projects are brought forward.

In the commercial sector, electrification of heat is frequently more cost-effective than use of hydrogen while energy efficiency improvements are important to help offset increasing electricity demand from electrification in the industrial and commercial sectors.