Monday, September 26, 2016

A LOW CARBON FUTURE. MAKING IT HAPPEN.



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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