Posted: 27 February 2018
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Looking ahead to FES 2018

Stakeholder feedback plays a vital role in shaping the Future Energy Scenarios that National Grid publishes each year. So, how will the scenarios evolve for 2018 and what are the key themes that are emerging? Head of Energy Insights, Marcus Stewart takes up the story.

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Looking ahead to FES 2018

Looking ahead to FES 2018

Engaging with stakeholders from right across the energy sector and beyond helps us to plot a range of credible futures.

“To reflect the changes in the energy landscape, we’ve increased our dialogue with new players in the sector. These include electricity storage providers and renewable gas projects.”

Marcus Stewart, Head of Energy Insights.

Insight:

In the past year we have engaged with more than 650 stakeholders from the UK and abroad.

Source: National Grid.

As we look ahead to the launch of the 2018 Future Energy Scenarios (FES) in July,), it’s worth reflecting on a year of ‘firsts’. 2017 was the greenest year on record for the UK’s energy system. Between June and September low-carbon sources met more than 50% of our electricity generation. We also witnessed a day when we operated the system with zero coal power.

These are just two examples of significant changes in Britain’s energy system. But what does this rapid evolution mean for the future?

Engaging with stakeholders from right across the energy sector and beyond helps us to plot a range of credible futures. The fantastic support throughout our stakeholder engagement programme in 2017 means we can draw on a broad range of insights and expert opinion as we create the 2018 scenarios.

In January we provided Ofgem with our FES Stakeholder Feedback Document. It sets out our approach to this year’s scenarios and the insights we’ve gathered through stakeholder engagement. We are now working to develop the detail behind each scenario. The formal launch of the FES 2018 will take place on 12 July.

How we work with stakeholders

In the past year we have engaged with more than 650 stakeholders from the UK and abroad. In total, 430 organisations took part in our engagement activities, up from 391 in 2016.

To reflect the changes in the energy landscape, we’ve increased our dialogue with new players in the sector. These include electricity storage providers and renewable gas projects. We have also engaged with the electric vehicle sector and car charging providers as the growth of the electric vehicle market continues.

We are acting on feedback from previous years too. Stakeholders requested more regular communication away from the main FES events. With this in mind, we launched our Future of Energy newsletter to keep people up to date with developments during the year. We published nine editions in 2017, reaching more than 6,700 subscribers. People also tell us that they value our insight and opinion on hot topics, so we published seven articles during 2017, which were viewed more than 10,000 times on our website.

At our FES conference in July 2017 we were joined by almost 400 stakeholders, with others following the event through live streaming. Meanwhile, more than 200 stakeholders took part in our workshops in Cardiff, Edinburgh, London and Warwick in October.

What’s changing this year

We continually look to evolve our scenarios to make sure they remain current. There are some common themes behind the 2018 scenarios.

A consistent approach: There is general agreement that four scenarios in a 2 x 2 matrix is the right structure to use. Stakeholders also tell us they value consistency and being able to compare with previous year’s analysis. The 2018 scenarios reflect this with progressive rather than radical changes.

An evolving picture: The relationship between green ambition and prosperity is changing. For example, the cost of some renewable technologies is falling significantly.

Decentralisation an important factor: The physical location of energy solutions – for example whether they are on the transmission or the distribution network – is a key variable in future energy pathways.

Achieving carbon targets: How many scenarios should meet the 80% reduction in carbon emissions against 1990 levels by 2050? The majority view was that there should be more than one pathway to 2050 but that not all scenarios should meet the target.

Our scenarios for 2018

Our four scenarios will be structured against two axes of speed of decarbonisation and level of decentralisation as shown here. Each scenario will consider the broad themes of power demand, transport, heat and energy supply.

The 2018 scenarios are:

Community Renewables: For this scenario we explore how the 2050 target can be met through a more decentralised energy system. It is based on the Consumer Renewables sensitivity from FES 2017.

Two Degrees: The decarbonisation target is met with less focus on decentralised energy. This scenario builds on Two Degrees from FES 2017.

Steady Progression: This is a more centralised pathway that makes progress towards but does not meet the 2050 target. It combines elements from last year’s Steady State and Slow Progression scenarios.

Consumer Evolution: In this scenario there is progress towards the decarbonisation target, but it is not met by 2050. This is also a world with greater decentralisation, building on a blend of Consumer Power and Slow Progression from FES 2017.

What happens next?

Between now and July we will continue with the detailed modelling and analysis to create the scenarios. We will share early insights from this work via our Future of Energy newsletter and the dedicated FES website.

We look forward to sharing and discussing our analysis with stakeholders when FES is launched in July. In the meantime, you can contact us via box.fes@nationalgrid.com. We welcome your thoughts and ideas, so please get in touch.

Looking ahead to FES 2018