Results:

This document is a project report for the project 'A new approach to assessing the value of demand side management and storage in reducing costs for electricity system operation and investment.'

The UK is committed to responding to the climate change challenge and the energy sector, and in particular electricity, is expected to make a significant contribution to achieving this goal. Wind power, both on and offshore is presently the principal commercially available and scalable renewable energy technology and it is expected to deliver the majority of the required growth in renewable energy. However, the amount of electricity generated by wind is highly variable and therefore difficult to predict. One of the key challenges of this development is to ensure cost effective integration of these resources in the operation and development of the UK systems without compromising supply security.

The unpredictability of wind power makes it difficult to maintain the equilibrium between demand and generation. This increases the need for the use of technologies which help manage and control the level of demand, known as Demand Side Management. Demand Side Management, or DSM, works by shifting demand from peak to off-peak periods in order to reduce its variability.

This project investigated a new approach to assessing the benefits DSM could have to the UK. In this context, the proposed project will investigate a new approach to valuing DSM for alternative future development scenarios of the UK system. The methodology used was based on a radically new approach mixing modern financial modelling coupled with sophisticated mathematical and computational techniques. This investigation developed a novel mathematical framework aimed at valuing applications of DSM in increasing the utilisation and improving the efficiency of the operation of future UK electricity system. The project showed that it is possible to save around 30% of the generation cost to warm a typical household in winter using DSM.

• Light Vehicles in the UK
• Plug-in vehicle sales
• Vehicle life
• Vehicle usage
• Consumer attitudes to plug-in vehicles
• Where to support charging
• Meeting vehicle charging requirements
• Network reinforcement costs
• Consumers, Vehicles and Energy Integration (CVEI) project
  • Consumer adoption: understanding the mass-market
  • Outputs –Modelling capability
  • Interim findings
  • Roadmap for efficient ULEV uptake and use
  • Trials will deliver further robust evidence

• Energy balancing is critical and extends beyond the electricity system
• Numerous opportunities to achieve balancing include:
  • Energy storage
  • Demand side flexibility
  • Vector integration
• Key decisions that lead to new energy systems will affect how much and what type of flexibility is needed.
• There is a huge amount of potential that we do not currently understand about balancing within a whole energy system.
• It is possible to assess the requirements for future flexibility – tools and evidence are being developed to help with this.

The Faraday Institution and the Department for International Development (DfID) commissioned consultants Vivid Economics to perform a rapid market and technology assessment of storage in weak and off-grid contexts in developing countries, to which this Insight refers.

This briefing note summarises Great Britain’s local gas demand from the 2nd of April 2017 to the 6th of March 2018 and compares this to electrical supply. The data covers the UK cold weather event on the 1st March, providing insights into the scale of hourly energy flows through both networks.

A peak hourly local gas demand of 214 GW occurred at 6pm on the 1st of March, which compared to a peak electrical supply of 53 GW occurring at the same time.

The data highlights a critical challenge – managing the 3-hour difference in demand from 5am to 8am on the local gas network during the heating season. Whilst flexibility in the gas system is provided using a change in pressure to store extra energy in the network to meet increasing demand, the electrical system has no comparable intrinsic equivalent.

The findings add to previous work funded by UKERC on thermal energy storage , heat incumbency, and flexibility of electrical systems to provide insights into the decarbonisation of heat in Britain, helping to inform decision-making, modelling of future networks and highlighting key areas for future research and innovation.

A greater research and innovation focus to reduce the 5am-8am 3-hour difference in heat demand is necessary.

• Stage 1 aims to characterize market and policy frameworks, business propositions, and the integrated vehicle and energy infrastructure system and technologies best suited to enabling a cost-effective UK energy system for low-carbon vehicles, using the amalgamated analytical toolset.
•  Stage 2 aims to fill knowledge gaps and validate assumptions from Stage 1 through scientifically robust research, including real world trials with privatevehicle consumers and case studies with business fleets. A mainstream consumer uptake trial will be carried out to measure attitudes to PiVs after direct experience of them, and consumer charging trials will measure mainstream consumer PiV charging behaviours and responses to managed harging options

• Vehicle electrification
• The project requires a broad range of expertise
• Modelling capability
• Scenarios have been developed to test further factors
• Interim findings
• Roadmap for efficient ULEV uptake and use
• Trials will deliver further robust evidence

• The Consumers, Vehicles and Energy Integration project is seeking to address the challenges involved in transitioning to a secure and sustainable low carbon vehicle fleet
• An integrated modelling toolset has been developed able to examine the implications for energy supply, infrastructure, vehicles, users, policy and commercial models – and with it, it is possible to test a wide range of scenarios
• Findings from several areas are already available and have been incorporated into a roadmap for delivering efficient vehicle decarbonisation
• Upcoming trials will deliver further robust evidence on how consumers respond to different charging propositions and attitudes to ULEV adoption

• CVEI project overview
• Project structure
• Analytical framework
• Accounting for trends and developments elsewhere
• Consumer adoption: understanding the mass-market
• Interim findings
• Dissemination of outputs

• Stage 1 aims to characterize market and policy frameworks, business propositions, and the integrated vehicle and energy infrastructure system and technologies best suited to enabling a cost-effective UK energy system for low-carbon vehicles, using the amalgamated analytical toolset.
• �Stage 2 aims to fill knowledge gaps and validate assumptions from Stage 1 through scientifically robust research, including real world trials with privatevehicle consumers and case studies with business fleets. A mainstream consumer uptake trial will be carried out to measure attitudes to PiVs after direct experience of them, and consumer charging trials will measure mainstream consumer PiV charging behaviours and responses to managed harging options

This working Paper has been prompted by an inquiry into low carbon networks launched in September 2015 by the House of Commons Select Committee on Energy and Climate Change. A response on behalf of UKERC has been submitted to the Committee. This present paper expands on many of the themes included in that response and provides more detail and discussion

This insight was first published in November 2019, with minor updates made in May 2021.

• Hybridised ASHP with gas boilers for individual dwellings, optimised for the British conditions;
• High-density thermal storage for individual dwellings;
• Home Energy Management Systems (HEMS) and sensors for residential applications;
• Building Energy Management Systems (BEMS) and sensorsfor non-domestic applications.

• The current state of development of the technology
• The key areas of technical development required
• Non-technical market constraints for each technology assessed at a high-leve
• The timescales and key milestones in these development pathways
• The level of investment required to achieve the technical developments identified
• The opportunities for the ETI to accelerate technology development and commercialisation
• Impact of technology development on performance and costs
• Role of the technologies under different electrification scenarios

• Adapting and developing network designs to enable delivery of a cost effective and secure future low carbon energy system in the UK
• Developing new infrastructure approaches
• Demonstrating new infrastructure technologies
• What we have done to date

• What is the ETI?
• Our energy system evolves around our choices
• Change happens fast
• Why do we need to balance?
• The tools at our disposal
• How much storage is needed?
• Vector Flexibility
• Demand Flexibility

• Create new energy systems, adapt existing ones and integrate them together
• Users define the energy system’s evolution, not the other way around
• Understand the implications of different scenarios so that we are prepared to evolve

• Borehole Storage: Southampton, Sheffield, Nottingham, Leicester
• Aquifer Storage: Birmingham, Southampton, Manchester

• Representative hydrogen transmission model: transmission pipeline of different lengths required to transport hydrogen from production facilities to power generation sites and vehicle refuelling sites
  • Pipe lengths (NTS 32") modelled for connection to production sites were 5km and 10km without the need for a compression station; pipe lengths (LTS 16") for connection to refuelling sites were modelled at longer distances up to 200km, with a compression station required for anything over 100km
  • NPV/km for connecting to power stations was £5.4m for installation in 2025
  • NPV/km for connections to refuelling sites was in the range £3.0m to £3.5m depending on network length with the higher cost relating to the need to add in a compression station
  • The additional cost of the power station scenario was due to the need to use larger diameter and hence more expensive pipe
• Representative hydrogen distribution model: distribution pipelines (LP/MP) required to connect production facilities to vehicle refuelling stations at different capacities and contexts
  • Context is a strong influencer of costs, with first costs per km increasing from rural through to urban and London. This is due to the higher costs of installing pipework in more congested areas.
  • Pipe costs dominate the overall network cost, particularly for the longer network lengths.
  • There is a small increase in cost per km for the higher capacity scenarios
• Hydrogen transmission and the impact of including storage:
  • Connecting a single large storage site into the network is considerably less expensive than connecting multiple storage sites of the same capacity
  • As the pipe lengths modelled were relatively short (5-10km) the storage costs dominated the overall project cost
  • Costs per mcm are considerably higher for the multi-storage option
  • The main benefit of the storage options is the storage itself and not the first cost savings associated with it.
• Hydrogen transmission network and the impact of pipeline material change: comparison of stainless steel 316L pipe with conventional steel using same pipe diameter (32" NTS)
  • First costs per km are higher for the stainless steel innovation
  • There is a slight reduction in cost/km for the longer stainless steel pipe lengths

The paper examines demand for lithium and neodymium from the EV industry. Lithium is used in Li-Ion EV batteries and neodymium is used in permanent magnets in electric motors and wind turbine generators. Global demand scenarios for EVs vary widely, though all anticipate a considerable growth in the EV market over the coming decades, driven largely by decarbonisation goals.

The paper then examines wind turbines, another low carbon use of neodymium. Again global demand for wind turbines and estimates of future material intensity are key to understanding future demand. It is also important to estimate the number of turbines using permanent magnet designs, since generators without permanent magnets are in common use. Decarbonisation goals are predicted to drive demand for wind turbines in the future, with several studies agreeing that future manufacturing of turbines will increase significantly. Based on this analysis, demand for neodymium from wind turbines could be between 600 and 6,000 tonnes per year by 2050.

There is increasing concern that future supply of some lesser known critical metals will not be sufficient to meet rising demand in the low-carbon technology sector. A rising global population, significant economic growth in the developing world, and increasing technological sophistication have all contributed to a surge in demand for a broad range of metal resources. In the future, this trend is expected to continue as the growth in low-carbon technologies compounds these other drivers of demand. This report examines the issues surrounding future supply and demand for critical metals - including Cobalt, Gallium, Germanium, Indium, Lithium, Platinum, Selenium, Silver, Tellurium, and Rare earth Metals.

• The UK energy system
• Integrating networks to optimise across energy vectors
• Multi-Vector Integration project

• Energy networks are a core part of the energy system
• Overarching challenges for transitioning networks
• Integrating networks to optimiseacross energy vectors and deliver flexibility
• Decarbonising heat through single and multi-vector routes
• To what extent is energy storage needed?
• Using H₂ storage to maximise use of CCS investment in the power system
• How might storage be operated?
• Salt caverns for hydrogen storage in conjunction with flexible turbines
• Pumped Heat Electrical Storage

• Vehicle electrification
• Users and Vehicles
• Energy supply
• Project aims
• Project structure
• Modelling framework
• Narratives (scenarios)
• Stage 1 initial analysis
• Stage 1 research with consumers
• Stage 1 research with fleets
• Stage 2

• Substantial challenges associated with widespread roll-out of low carbon vehicles; shift from a “problem for the network” to an “opportunity through integration of vehicles as part of a wider system” can yield benefits for all actors in the system, including:
  • increased uptake of low-emission vehicles, managing charging and refuelling, and optimising the system design
• Analysis and solutions must be holistic (considering all parts of the system together, including users)
• Robust trials in Stage 2 will generate data to test solutions and inform analysis, and will add unique value:
• Trial with mass-market users (i.e. people from the majority of the vehicle user and fleet operator markets)
• Addressing widely-applicable plug-in vehicles (BEVsand PHEVs) suitable for wide range of users
• Holistic system design

This review takes stock of UK energy policy ahead of the Autumn Statement, Industrial Strategy and new Emissions Reduction Plan. Its main recommendations are:

1. An integrated, evidence based approach to the new Industrial Strategy and Emissions Reductions Plan. The Industrial Strategy should set out clear priorities and the mechanisms for realising benefits for the UK
2. A new White Paper on Heat and Energy Efficiency
3. A Gas by Design approach to the future of gas that is compatible with carbon budgets and targets
4. A new approach to CCS commercialisation and deployment, in response to the Oxburgh report
5. An extension of the Levy Control Framework beyond 2020, and plans for auctions that include most large-scale electricity technologies and demand reduction in a single auction
6. Reform of the Capacity Mechanism so it gives equal

Energy System Demonstrators are physical demonstrations testing new technologies for low-carbon energy infrastructure.

A review of energy systems demonstrator projects in the UK was undertaken for UKERC by the Energy Systems Research Unit (ESRU) at the University of Strathclyde. The review encompassed 119 demonstrators and consisted of two phases: 1) the identification of demonstrator projects and 2) an analysis of projects and their outcomes.

Energy demonstrators

The review defined an energy system demonstrator as "the deployment and testing of more than one technology type that could underpin the operation of a low-carbon energy infrastructure in the future". Only demonstrators that post-date the 2008 Climate Change Act were included and that included a physical demonstration at one or more UK sites. 119 projects were identified that met the search criteria.

There were two phases of review activity. Phase 1 involved identification and documentation of demonstration projects, involving a systematic search to identify and record the details of projects. Phase 2 was a review of project outcomes and outputs, particularly end-of-project evaluations, covering technical, economic and social outcomes where available.

The review outputs (available here) are a final report summarising the findings, 119 demonstrator project summaries (the Phase 1 reports), 119 demonstrator output analyses (the Phase 2 reports) and a GIS (Geographic Information System) map and database showing the locations and project details of the demonstrators.

The final report, attendant project summaries and GIS data are intended to provide policy makers and funding bodies with an overview of the existing demonstrator "landscape", enabling decisions on future demonstrator calls and the focus of those calls to be made with a clearer knowledge of what has already been done.

Project files

• Access the demonstrators GIS map here.
• Access the Phase 1 summaries here.
• Access the Phase 2 summaries here.

• Energy balancing is critical and extends beyond the electricity system
• Numerous opportunities to achieve balancing include:
  • Energy storage
  • Demand side flexibility
  • Vector integration
• Key decisions that lead to new energy systems will affect how much and what type of flexibility is needed.
• There is a huge amount of potential that we do not currently understand about balancing within a whole energy system.
• It is possible to assess the requirements for future flexibility - tools and evidence are being developed to help with this.

• D1.1 Energy storage mapping report - a first principles framework for mapping ;the system technical services and benefits that storage (heat, hydrogen, gas and;electricity) and competing flexibility options could provide.
• D1.2 Assessment of the near term market potential for energy storage, over the next 5-10 years given the current market structures, with a particular focus on electricity�
• D1.3 Approach for modelling long term role of energy storage (this report) - which defines the modelling approach to analysing the longer term role for storage and other relevant flexibility options in GB from a system operator perspective.

• Design Requirements
• Review of Literature
• Overview of Modelling Framework
• Modules
• Data Requirements
• Scenario Framework
• Techinical and Data Architecture
• Private Investment Perspective

• Scenario analysis using the modelling framework and data developed during the project
• Identification and assessment of 3 case-study examples of private sector storage investment and potential generic policy options
• Wider qualitative assessment of risks/opportunities for storage deployment associated with the analysis undertaken
• The report will also describe how the scenarios have been constructed and describe the underlying model framework insofar as it is necessary to support the interpretation of its outputs.

The aim of this workshop was to bring together a group of leading workers in the fields of energy technologies, combinatorial methods and computer simulation techniques, to define target performance for materials, and to explore the best methods to discover and develop materials capable of achieving these targets. We focussed mainly on electrochemical devices in order to reduce the scope of the meeting and to obtain a more focussed view, albeit in a rather reduced materials set. The final aim was not to produce a standard proceedings volume but rather to capture the important discussions that took place between the experts in the various fields both in the sessions and in the breakout sessions that followed from the main sessions.

This report aims to understand and quantify these impacts, and therefore addresses the question ‘What is the evidence on the impacts and costs of intermittent generation on the British electricity network, and how are these costs assigned?’ It is based on a review of over 200 international studies.

The aims of the work undertaken were:

• To characterise the main areas of heat use in the UK and the magnitude of the primaryenergy used
• To describe the main characteristics of the different technologies and approaches available for thermal energy storage and provide examples of their availability, deployment and demonstration
• To review current thermal energy storage system research to determine key characteristics, costs, maturity and additional research requirements
• To identify key application areas for thermal energy storage in the UK based on a national target for an 80% reduction in greenhouse gas emissions by 2050
• When combined with large scale deployment of electric air source heat pumps, to explore the potential for peak grid load balancing and the magnitude of thermal energy storage that could be achieved on a distributedbasis

Also released as Institute for Molecular Science and Engineering Briefing Paper No. 8

• Energy networks as a part of the energy system
• Energy system scenarios
• Network transition challenges
• Evidence base

This Working Paper has been motivated by the growth of distributed energy resources (DER) on the electricity system in Britain, i.e. generation, storage and flexible demand that is connected at distribution network voltages, and the consultation published by Ofgem and BEIS in November 2016 on the subject of electricity system flexibility. It aims to give a very basic and rapid introduction to some of the issues and their origins.

• The direct and immediate transfer of energy tothe point where it will be used via electricity networks or pipelines, i.e. transmission; or
• The generation and storage of energy in a mobile device that can be transported further down the supply chain where it can either be used continuously or intermittently as required, i.e. a transportable energy solution.

• hydrogen;
• hydrocarbons produced via the Fischer-Tropsch process;
• ammonia;
• zinc air batteries; and
• aluminium.

• Energy networks as a part of the energy system
• Energy system scenarios
• Network transition challenges
• Transitioning electricity networks
• Transitioning gas networks
• Transitioning heat networks
• Transitioning hydrogen networks
• Integrating networks to optimise across energy vectors
• Balancing supply and demand
• Policy and economic factors

This has been superseded by a new 2019 landscape

This UKERC Research Landscape provides an overview of the competencies and publicly funded activities in energy storage research, development and demonstration (RD&D) in the UK. It covers the main funding streams, research providers, infrastructure, networks and UK participation in international activities.

UKERC ENERGY RESEARCH LANDSCAPE: ENERGY STORAGE

• Section 1: An overview which includes a broad characterisation of research activity in the sector and the key research challenges
• Section 2: An assessment of UK capabilities in relation to wider international activities, in the context of market potential
• Section 3: Major funding streams and providers of basic research along with a brief commentary
• Section 4: Major funding streams and providers of applied research alongwith a brief commentary
• Section 5: Major funding streams for demonstration activity along with major projects and a brief commentary
• Section 6: Research infrastructure and other major research assets (e.g. databases, models)
• Section 7: Research networks, mainly in the UK, but also European networks not covered by the EU Framework Research and Technology Development (RTD) Programmes
• Section 8: UK participation in energy-related EU Framework Research and Technology Development (RTD) Programmes
• Section 9: UK participation in wider international initiatives, including those supported by the International Energy Agency

This UKERC Research Landscape provides an overview of the competencies and publicly funded activities in energy storage research, development and demonstration (RD&D) in the UK. It covers the main funding streams, research providers, infrastructure, networks and UK participation in international activities.

UKERC ENERGY RESEARCH LANDSCAPE: ENERGY STORAGE

• Section 1: An overview which includes a broad characterisation of research activity in the sector and the key research challenges
• Section 2: An assessment of UK capabilities in relation to wider international activities, in the context of market potential
• Section 3: Major funding streams and providers of basic research along with a brief commentary
• Section 4: Major funding streams and providers of applied research along with a brief commentary
• Section 5: Major funding streams for demonstration activity along with major projects and a brief commentary
• Section 6: Research infrastructure and other major research assets (e.g. databases, models)
• Section 7: Research networks, mainly in the UK, but also European networks not covered by the EU Framework Research and Technology Development (RTD) Programmes
• Section 8: UK participation in energy-related EU Framework Research and Technology Development (RTD) Programmes
• Section 9: UK participation in wider international initiatives, including those supported by the International Energy Agency

The UK power system experienced a period of significant and rapid expansion during the late 1980s and in the 1990s. Many power generation assets are now approaching the end of their useful life and need to be replaced as we decarbonise the overall energy system. Developments in distributed generation and other technologies open important questions as to whether the traditional approaches to development and operation of power systems are still adequate and whether the anticipated major re-investment in transmission and distribution networks could be avoided by adopting new technologies such as smart grids, smart meters and a greater emphasis on demand side participation.

High level research issues identified within the UKERC Energy Supply theme cover a number of areas, including:

• Aging infrastructure replacement strategies before failure - models and tools for condition monitoring - risk management of existing T&D infrastructure
• Energy security & system security
• Environmental sustainability reducing the impact of electricity production, transportation and use on the environment (strive to reduce greenhouse gases responsible for climate change) - need to incorporate climate change driven constraints into system planning and operation (EU renewables targets; 80% 2050 CO2 targets; Meeting UK carbon budgets will require large scale decarbonisation of the electricity sector by 2030)
• Integration of distributed generation including intermittent energy technologies & micro generation - what type of network architecture - reliability and power quality - communication and control aspects of networks - incorporation of demand response and demand side participation (impact of smart meters) - role of energy storage
• Incorporation of smart meters and smart grids (impact on demand and networks)
• Transmission (on- and offshore) and distribution network planning under uncertainty of intermittent renewable resources such as wind and the uncertainty of markets and regulatory policy
• Interaction between electricity and gas networks - Integrated network (multi energy vector) research and optimisation
• Encouraging network innovation and low carbon generation through regulation and market design
• Assessing the potential of heat networks
• Impact of greater European market/network integration (gas and electricity)

These projects are reviewed in this report and from these high level research issues, some of the key research challenges identified are summarised as follows:

• Identifying and quantifying the costsand benefits of community heating and energy systems
• Quantifying Costs and Benefits of Integrating UK and EU Energy Infrastructures
• Smart meters and demand side participation
• The role of gas in the UK energy system
• Resilience of gas systems
• Compatibility of energy market and climate objectives and risks in a post EMR world

Scope of the Call for Evidence and objectives in respect of flexibility

We welcome the attention being paid by Ofgem and BEIS to the need for flexibility in Britain’s electricity system. In our view the main reason to support electricity system flexibility is that it can help minimise the costs of meeting the UK’s statutory climate targets whilst ensuring that system security is not compromised. The electricity system’s ability to adapt to changing demand in timescales of years down to minutes and varying availability of power from different resources will be extremely important to meeting these policy goals. Furthermore, action is needed so that those consumers that are best able to adapt their patterns of use of electricity have sufficient incentives and rewards for doing so. One manifestation of the main goal in accommodating future generation and demand is an objective to maximise the utilisation (across each year of operation) of electricity system assets, i.e. generators, network components and storage facilities.

Whilst the title of the call for evidence focuses on ‘a smart, flexible energy system’, most of the raised relate to the electricity system. We have therefore focused most of our responses on electricity rather than the energy system as a whole. Our responses are selective. We have only answered those questions where we can offer relevant evidence, based on our research and expertise.

• Energy Storage
• Flexible Demand
• Pricing and tariffs
• Procurement of System Services
• Interactions between transmission and distribution
• Industry Leadership
• Roles in planning and operating the future power system
• Evidence and access to data

Scope of the Call for Evidence and objectives in respect of flexibility

We welcome the attention being paid by Ofgem and BEIS to the need for flexibility in Britain's electricity system. In our view the main reason to support electricity system flexibility is that it can help minimise the costs of meeting the UK's statutory climate targets whilst ensuring that system security is not compromised. The electricity system's ability to adapt to changing demand in timescales of years down to minutes and varying availability of power from different resources will be extremely important to meeting these policy goals. Furthermore, action is needed so that those consumers that are best able to adapt their patterns of use of electricity have sufficient incentives and rewards for doing so. One manifestation of the main goal in accommodating future generation and demand is an objective to maximise the utilisation (across each year of operation) of electricity system assets, i.e. generators, network components and storage facilities.

Whilst the title of the call for evidence focuses on 'a smart, flexible energy system', most of the raised relate to the electricity system. We have therefore focused most of our responses on electricity rather than the energy system as a whole. Our responses are selective. We have only answered those questions where we can offer relevant evidence, based on our research and expertise.

This document only answers questions 28 -32 inclusive. Another document is available http://ukerc.rl.ac.uk/UCAT/PUBLICATIONS/Response_to_Ofgem-BEIS_call_for_evidence-smart_flexible_energy_system.pdf which gives answers to other questions in the consultation.