ETI PUBLISHES INDUSTRY PERSPECTIVES ON HOW TO DELIVER EFFICIENT NETWORKS FOR A LOW CARBON FUTURE ENERGY SYSTEM.
The Energy Technologies Institute (ETI) has just published a number of perspectives on the issues that can be
anticipated in moving the UK to a future low carbon energy system. The authors
are Robert Hull of KPMG and formerly OFGEM, Keith Maclean Chair of UKERC, Co-Chair
of the Energy Research Partnership and formerly Policy Director of SSE, Jorge
Vasconcelos, Chair of New Energy
Solutions, formerly Chair of the Portuguese energy regulator and founder and
Chair of the Council of European Energy Regulators, and myself.
This stemmed from an ETI project to build understanding of
options for reforming governance, market and regulatory arrangements to enable
efficient investment in low carbon energy network infrastructures. The
perspectives were all, in broad terms at least, built around the ETI’s
projections of how, in terms of the technically possible, the UK might meet its
ambitious targets for reducing carbon emissions. The intention was to identify the
non-technological issues faced in transforming the energy sector from long established
fossil fuel dependency to a complex mix of interrelated low carbon
technologies.
The complex choices are discussed both in the ETI scenarios
and in the perspectives. Inter alia they include the multiple links between:
·
A power sector struggling to accommodate its
own mix of low carbon technologies – nuclear, renewables and carbon capture.
·
A heat sector looking to the development of
district heating networks.
·
A transport sector looking at a future of
electric vehicles or possibly hydrogen.
·
Possible options for energy storage, in
electro-chemical form, as heat, or in other forms of chemical storage.
·
A combination of centralised and decentralised
production, storage and decision making and markets
This formidable challenge is not just about trying to find
workable combinations of the above. It is about creating the environment that
can make it happen, in terms of market structures, regulation and the wider
institutional arrangements that govern the conduct of the energy sector and the
application of energy policy. In the widest sense this is something that we can
describe as the institutional
architecture. Ultimately this determines how decisions are made at all
levels.
Particular questions that need to be addressed include:
·
Finding structures that make the necessary
investments financeable at a reasonable cost.
·
Dealing with the very different technical
characteristics of low carbon generation.
·
Implications of major changes in the heat
sector for matters of consumer choice.
·
Finding the right balance between markets, as instruments
for decentralised decision making, and policy interventions.
The ETI perspective make an interesting first shot at
different aspects of this key task.
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