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Reference Number NIA2_NGESO007
Title Decarbonisation of Heat – Integrated Market Study
Status Completed
Energy Categories OTHER CROSS-CUTTING TECHNOLOGIES or RESEARCH(Energy Models) 90%;
OTHER POWER and STORAGE TECHNOLOGIES(Electricity transmission and distribution) 10%;
Research Types Applied Research and Development 100%
Science and Technology Fields ENGINEERING AND TECHNOLOGY (Electrical and Electronic Engineering) 100%
UKERC Cross Cutting Characterisation Systems Analysis related to energy R&D (Energy modelling) 100%
Principal Investigator Project Contact
No email address given
National Grid ESO
Award Type Network Innovation Allowance
Funding Source Ofgem
Start Date 01 December 2021
End Date 31 March 2022
Duration ENA months
Total Grant Value £450,000
Industrial Sectors Power
Region London
Programme Network Innovation Allowance
 
Investigators Principal Investigator Project Contact , National Grid ESO (100.000%)
  Industrial Collaborator Project Contact , National Grid plc (0.000%)
Web Site https://smarter.energynetworks.org/projects/NIA2_NGESO007
Objectives This project will look to undertake the following scope of work: Aurora will carry out the work in a multi-client study. Work programme comprise the following:Build up assumptions on heat demand and technology options and costsDevelop policy scenarios and define modelling assumptions across each marketCarry out power, gas and hydrogen market modelling plus technology deployment analysisAssess implications of each scenario for consumers and for generators, suppliers and networksDetermine policy implicationsIn line with the ENAs ENIP document, the risk rating is scored Low.TRL Steps = 1 (1 TRL step)Cost = 1 (£20k)Suppliers = 1 (1 supplier)Data Assumptions = 3 The project will produce insights on the following key questions:What trajectories for the development of the heating mix will arise economically under different cost assumptions and constraints?What are the consequences of different future mixes of heat technologies for power, gas and hydrogen markets?What policy options are available, and what effects are they likely to have for different market participants and for consumer costs?How will heating affect the profile and flexibility of electricity demand, and how will that affect revenues for renewables, thermal generation and storage?How will peak energy demand be met on extremely cold days, especially if power generation from wind is low?How could different global decarbonisation trajectories affect gas prices and the economics of the heating mix? We currently estimate about 2.5GW growth in new heat flexibility by 2030, that is electricity demand shifted away from peak which is equivalent to avoided capacity reservation worth £45million (based on £18/MWh auction clearing price on 10/03/2021). This project will produce insight and data to help reduce the current high levels of uncertainty around these estimates. It will help assess if more or less of these savings could be achieved and how network operability will need to evolve to maximise benefits to consumersThe final outputs will be: Forecast data for power, gas hydrogen markets and for heating technology deployment in a range of scenariosA detailed internal report and more concise external summary report with insights and implications for stakeholders, policy and regulationFollowing completion of the study:Outputs to be used (directly or indirectly) as input into the Spatial GB Clean Heat Model, the integrated tool for developing FES heat scenariosInsight from the project to be used to shape future FES scenario frameworks especially around heat decarbonisation but also in areas like system flexibility, industrial demand, and hydrogen supply and storage.
Abstract The newly developed spatial heat model (https://smarter.energynetworks.org/projects/nia_nggt0154) provides a powerful, peer reviewed platform for generating future GB building heat scenarios at high levels of granularity. The quality of outputs is however dependent on credible data about technology costs and fuel prices that account for whole energy market and policy interactions. Because theres little precedence for the kind of energy system architectures that net zero would require, the input assumptions that go into the existing model must continue to be revised and benchmarked against the latest available data and insight. The project will focus on the Decarbonisation of Heat, specifically heat demand, technology, markets, networks, and policy implications. 
Publications (none)
Final Report (none)
Added to Database 19/10/22