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. The event looked at the challenges and the possible solutions we face in the coming years in an effort to meet the UK’s energy demand.
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Our seminar took place at Westminster City Hall with ECA’s Bill Wright acting as Chair. Bill started the event with an overview of the topic in hand referring to the recent ‘Bang goes the theory’ episode which looked at the recent storms and the effect they had on the energy in our homes but also focused on the bigger picture of what we can do to secure our power. The power cuts at Christmas showed how unprepared we are as a nation to deal with long outages and lack an understanding of the bigger picture. Bill introduced the morning speakers; Julian Roberts of Ofgem and Richard Smith of National Grid to discuss the facts about our electricity supply and their opinion of what might happen in the future.
Setting the scene
Julian Roberts of Ofgem 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 being the increasing costs to 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, this includes environmental legislation which tackles 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 and with wind growth there is always more risk.
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. Julian 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.
Something that Richard Smith from National Grid agreed with. As Richard argued, our industry is a long term industry; it’s not an industry that is looking for a quick fix but rather 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 users lack the understanding about how much energy they require and demand. 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 feeding tariffs and heat pumps to name but a few; potentials which should enable us to level the current trajectory we are on.
Richard did highlight that blackouts are not something new, although we suffered dramatically in the 2013 Christmas period, blackouts happen all over the world and can be resolved. He emphasised that in the case of the UK it tends to be weather and falling trees that drives them but that the storms of this winter have enabled them to see a higher frequency and duration and the impacts this can have. Although these issues were dealt with in the best way possible, there are lessons that can be learnt from it but despite this the future is still uncertain. Politically energy is not consistent and polarisation is expected to continue until the next general election. Economically we’re uncertain as well, although growth is expected for 2014 is it a sustainable growth we need to enable us to implement plans for electricity generation.
A key issue that is rarely considered with electricity supply is water. Tim White from Marquis and Lord highlighted the dependency water supply has on electricity generation and the fact that it’s not something we have to prepare for but it’s an issue happening now, an issue we need to work on resolving.
But how does electricity affect our water supply? As Tim explained 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 various areas of the UK, incidents that will no doubt increase in the future. With microbiological zone incidents ranging from 8-9 per blackout the risks are high and need to be prepared for, as do the societal impacts that come with a lack of water supply: not only does the pressure of bottled water supply increase but there are severe hygiene issues due to the reliance of water for toilets, food preparation and personal hygiene. Tim did highlight that although the Government can put in measures such as the Water Safety Plan, he encourages 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 also consider the risks of water storage, without electricity water runs the risk of stagnation and bacterial contamination. Tim encourages users to understand the systems employed in water storage as well as looking beyond L8 legislation. And above all he reminded the audience 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 our electricity generation. It is clear something has to be done to prevent the possibility of power shortages in the future and several possibilities 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 it incorporates much more than buildings but rather 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 being to keep it simple, add value but to be realistic and to take advantage of current compliance. This is something that DECC have taken into consideration during development and have 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 in its pilot stage. Charlie looked at where the industry is at the moment, looking 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’s 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 implemented fully. 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 occur within 9 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 Ltd had a different approach to keeping the lights on than either of the DECC solutions. Rather than looking at it from a national perspective, Tim looked at it on a much smaller scale, what individuals can do at a local level. As Tim highlighted 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 if the grid goes down’ the building still has access to electricity; ensuring power cuts are more manageable. Voltage optimisation is also another option that can prevent the lights from going out, although at grid level it’s not effective but 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 our 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 to, rather than rely 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 the smart solutions to the lights going out. Jeremy started his presentation by looking at the five ways in which we can store energy including electrically and mechanically which we are most familiar with but also electro-chemically as well. Jeremy looked at 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 on the national grid. With the risks the grid faces in the future the benefits of this energy storage means less of society will feel the effects of the lights going out. Jeremy also spoke about micro-grids and their benefits; he described them as an island solution due to their autonomy, suited to power disruption management and the support for renewables which going forward needs to be the focus as coal and gas supply declines.
He looked at how Japan has dealt with power shortages after their nuclear power plants were closed due to earthquakes. Although they’ve faced a huge risk due to a loss of 25% power supply they have worked hard to avoid disruption with a $700bn investment in renewables and the uptake of smart meters in all buildings by 2025. Jeremy’s use of Japan shows that when facing huge risks Japan reacted with well thought out plans and a view to becoming a more sustainable future to avoid such risks in the future. Although total solutions for smart cities aren’t completely successful in the current time Japan is perhaps a country we need to watch to better understand how we can save ourselves from such disruption.
The event concluded with Andrew Eastwell, CEO of BSRIA (September 1998 - April 2014), speaking at his last BSRIA event before stepping down at the end of April. Andrew summarised the event by discussing its origins, in 2009 at a BSRIA Council meeting the future of the UK’s energy market was one of concern and many problems were mentioned that 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. But one thing that Andrew did stress about solutions is that the industry has an opportunity to provide the solution or to help other sectors understand the need for change. All businesses are committed to I.T and therefore rely heavily on electricity supply. If the lights go out so do our businesses and therefore so does the UK’s GDP. BSRIA has a contingency plan, we rely on laptops so our power can continue for some time after a power cut and we have a UPS that will safely shutdown our systems. But BSRIA are a company in the know, others aren’t that fortunate. As an industry we should be educating and offering strategy plans for the worst case scenario. Andrew also highlighted that it’s not just businesses that are at risk either, its individuals at home using generators without proper understanding therefore risking their lives. As an industry with valuable knowledge and experience we should be sharing it and preparing other sectors for the possibility of the lights going out. Preparation can be a step towards prevention.