UK Future Energy Scenarios 2013

Richard Smith

Head of Energy Strategy & Policy

National Grid

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Political uncertainty

3

Economic uncertainty

4

Social uncertainty

5

Technology uncertainty

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There are many possiblefuture scenarios…

Stephen MarlandGas Demand

Marcus StewartEnergy Demand

Lauren MoodyPower Demand

Simon DurkGas Supply

Lilian MacleodPower Supply

Peter ParsonsEnergy Supply

Gary Dolphin

Market OutlookCraig DykeStrategy Dev.

Mark RipleyNG EMR

Phil SheppardNetwork Strategy

Emily BourneDECC EMR

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So how do we create our scenarios?

Your Views

Your views drive our

processes and inform

both our final published scenarios

and our consultation

processFuture

Energy Scenarios

The publication of the

Future Energy Scenarios document marks the

start of our annual

process

Modelling

Our axioms

underpin our

detailed modelling

that drive our scenarios

Axioms

An axiom is a premise

or starting point of

reasoning. The

axioms reflect

stakeholder feedback

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So how do we create our scenarios?

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Power Demand

Gas Demand

Gas Supply

Gas Demand

Power Supply

Power Demand

Power Supply

Power Demand

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What’s changed?

Accelerated Growth retired

Axioms updated & amended

Demand analysis improved

New case studies

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Slow Progressionwhere developments in renewable and low carbon energy are comparatively slow, and the renewable energy target for 2020 is not met. The carbon reduction target for 2020 is achieved but not the indicative target for 2030

Gone Greenhas been designed to meet the UK’s environmental targets; 15% of all energy from renewable sources by 2020, greenhouse gas emissions meeting the carbon budgets out to 2027, and an 80% reduction in greenhouse gas emissions by 2050

Our 2013 Future Energy Scenarios…

Gone Green SensitivitiesCase Study 1: High offshore wind

Case Study 2: High onshore wind

Slow Progression SensitivitiesCase Study 1: High CCGT, low CoalCase Study 2: High coal, low CCGT/biomass

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Gone Green

Our 2013 Future Energy Scenarios…

Slow Progression

PowerDemand

Improved methodology & lower 2012/13 outturn

Falls to early 2020’s; rises thereafter Falls gradually to 2035

PowerSupply

Coal closures (IED); new nuclear 2020’s; more interconnection; low gas utilisation

High wind; more biomass; CCS High gas capacity

Gas Demand

Improved methodology & lower 2012/13 outturn

Annual reduces to 2035; peaks ~ flat Falls to early 2020’s; power gen. pick-up

GasSupply

Important uncertainty: LNG v Continent; Norway remains prominent

Lower supply inc. UKCS & Norway Gas market confidence; shale potential

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0%

2%

4%

6%

8%

10%

12%

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

De

-ra

ted

ca

pa

cit

y m

arg

in (

%)

Challenges in the shorter term…

Gone Green 2013

Ofgem reference scenario 2013

Ofgem high demand sensitivity

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Confidence in the medium term…

Renewables deployment by 2020 (GW)

Gone Green 2013 vs EMR

0

10

20

30

40

50

Unabated thermal Other non-renewable Renewable

EMR analytical

report ranges

Gone Green 2013

modelled deployment

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Summary

Robust engagement – holistic, self consistent & transparent scenarios

Uncertainties & challenges remain

Tools to deliver are being deployed