Bryt Insight July 2021

Bryt Energy
| 16th August 2021 | Bryt Insight
National Grid ESO releases Future Energy Scenarios
Government publishes Transport Decarbonisation Plan
Smart Systems and Flexibility plan updated for 2021
Government puts forward plans to replace National Grid as system operator

In recent weeks, we’ve seen a great deal of activity within the energy industry and the government. BEIS and Ofgem have been working together on the Smart Systems and Flexibility Plan and their plans to replace National Grid ESO as the electricity system operator. Meanwhile, National Grid ESO has released its annual Future Energy Scenarios report (which looks promising) and the government has published its Transportation Decarbonisation Plan. 

 

There’s a lot to cover, so here’s what you need to know… 

NATIONAL GRID ESO RELEASES FUTURE ENERGY SCENARIOS

Every year, National Grid’s Electricity System Operator (ESO) releases its Future Energy Scenarios (FES) report. It gives insights into how the energy market might evolve between now and 2050, and looks at the role that technology, consumers and policies will play in the journey to net zero. Encouragingly, three out of the four future scenarios they published in this year’s report see the UK reaching its net zero target by 2050 or earlier.

 

One of the key aims of this report was to determine which steps could be taken to enable the UK to meet the Sixth Carbon Budget, which requires an emissions reduction of 78% by 2035. The FES report highlights that we will only meet this goal – which has been enshrined into law – in the two most ambitious decarbonisation scenarios: ‘Leading the Way’ and ‘Consumer Transformation’. In both of these scenarios, there has been a huge shift in societal norms and energy infrastructure. For example, in ‘Leading the Way’ hydrogen is used to decarbonise some of the most challenging industrial processes, while the average home is heated by an electric heat pump in ‘Consumer Transformation’.

 

One thing that the report makes clear is that consumer engagement will make or break the UK’s net zero target. Within the two scenarios in which the UK meets its net zero and Carbon Budget targets, consumers have the support to change their behaviour by switching to electric vehicles, improving the energy efficiency of their buildings and participating in demand side response. Clearly, every business will need to play its part in helping the UK to reach net zero, and they need to take action today if we’re going to meet the Sixth Carbon Budget’s 2035 deadline.

 

If your business could use some support in becoming more sustainable, whether that’s by switching to zero carbon, 100% renewable electricity, or optimising your energy usage, our team is here to help – click here to find out more. You can also read the full FES report here.

GOVERNMENT PUBLISHES TRANSPORT DECARBONISATION PLAN

If the UK is going to meet its net zero target, reducing transport-related emissions will be key. Now that the Government has published its Transport Decarbonisation Plan, we can see how it plans to decarbonise this sector and uncover what this means for businesses.

 

Within the plan, the Government has outlined several strategic priorities for reducing transportation emissions, such as accelerating the shift to public transport. It has pledged £12bn investment for local transport systems to help prioritise low carbon forms of transportation and reiterated its goal for half of all journeys in towns and cities to be walked or cycled by 2030.

 

One of the key elements of the plan – the 2030 ban on the sale of new petrol and diesel vehicles and the 2035 ban on new hybrid vehicles – had already been announced prior to its publication. However, the Department for Transport will also be consulting on proposals to phase out polluting vehicles weighing 3.5-26 tonnes from 2035, and those over 26 tonnes from 2040. Although currently in the consultation stage, it’s important for businesses with HGV fleets (or HGVs in use in their supply chain) to be aware of these dates and begin to consider how they could plan ahead in this area. Those that offer company car schemes will also need to put a plan in place for switching to electric vehicles in light of the 2030 deadline for new petrol and diesel vehicles.

 

The plan also contains key insight into the Government’s strategies for air, rail and shipping decarbonisation that you may be interested in – you can read the full plan here.

SMART SYSTEMS AND FLEXIBILITY PLAN UPDATED FOR 2021

BEIS and Ofgem have been working together on an updated Smart Systems and Flexibility Plan, which was launched last month. Within the plan, they set out how we will transition to a smart, flexible and decarbonised energy system.

 

The plan states that a ‘flexibility first’ approach could reduce the annual costs of managing our energy networks by £10bn by 2050 and create up to 24,000 jobs in fields including engineering, system installation and data science. They believe that we will need around 30GW of low carbon flexible energy capacity by 2030 and 60GW by 2050, in order to maintain our energy security and integrate high levels of renewable generation cost-effectively.

 

Their vision is for electricity consumers of all sizes to be able to provide flexibility to the system by the mid-2020s, although the plan emphasises that this will need to be supported by the right infrastructure and regulatory framework. At this point, it’s also envisioned that business customers will have a greater choice of innovative flexibility products, as even the smallest businesses will have smart meters. By 2030, they believe that consumers will be providing significant flexibility to the system and that energy consumers will be in charge of and able to choose how dynamic their participation in the flexible energy market will be.

 

If your business is interested in optimising its energy usage, you don’t have to wait years for smarter solutions to come along. With Bryt Energy’s optimisation solutions, you can find flexibility while staying in total control of your consumption – to find out more, click here.

GOVERNMENT PUTS FORWARD PLANS TO REPLACE NATIONAL GRID AS SYSTEM OPERATOR

The government has proposed a plan for replacing National Grid, which has been the electricity system operator for England, Scotland and Wales for over 30 years, with an independent ‘future system operator’.

 

National Grid’s Electricity System Operator (ESO) became a legally separate business within the National Grid Group in 2019. However, in January 2021 Ofgem raised concerns that the Group could face a ‘conflict of interest’ when advising on our future electricity system because it also owns energy networks and transmission assets that may benefit financially from future investment plans. This could make it more difficult for National Grid ESO to impartially choose between building a bigger and higher capacity network or creating a smarter, more efficient system that is overall cheaper for customers. Therefore, Ofgem claimed that an independent body would be better placed to deliver net zero at the lowest cost to customers.

 

It appears the government agrees, as on 20th July 2021, Ofgem and the Department for Business, Energy and Industrial Strategy (BEIS) launched a consultation on the management of energy systems operations in England, Scotland and Wales. Ofgem and BEIS have proposed that in addition to managing our electricity system, the independent operator should also take responsibility for strategic network planning, long-term forecasting and market strategy for the gas system. They also refer to ‘new or enhanced roles’ for the operator, which include overseeing the UK’s hydrogen and carbon capture and storage (CCS) sectors. To read the full consultation document and have your say on the proposal, click here.

TALK TO OUR TEAM

If you have any questions about the changes discussed above or how they might affect your business, our team of experts is on hand to answer them. Simply call us on 0121 726 7575 or email us at solutions@brytenergy.co.uk.

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