Years Active: 2014-2019

What are the roles and interdependencies of energy systems at different scales?

This programme focuses on the roles of – and interactions between – local, national and European energy systems. Particular attention to local energy systems has become important in the UK recently due to the rise of generation embedded in distribution networks, community energy and Local Authority initiatives. Similarly, the different natural resources and devolution within the UK has led to more distinctive approaches to energy policy in Scotland, Wales and Northern Ireland. Interactions within Europe are likely to shape UK energy markets and policies to an increasing extent with opportunities for more technical, market and policy integration to meet EU policy goals. However, the tensions and trade-offs between EU policy goals and Member State priorities need to be investigated and understood. These trends, if they continue, will have important technical, economic and governance implications.

There are engineering challenges relating to the volume of energy converted into convenient forms, the location of conversion facilities relative to users’ locations and, taking into account available energy storage, balancing the rate of conversion and transfer with that of use. Developments to help to meet these challenges include:

  • greater use of demand side management and storage for system balancing over varying timescales;
  • expansion of continental networks, e.g. to allow the spatial diversity of renewable electricity resources to be exploited;
  • and sharing of reserve facilities between a greater number of users.

Alongside these are economic, policy and political challenges such as the development and implementation of incentives for demand side management, storage capacity (in both electricity and gas) and interconnectors; and interactions between policy incentives, frameworks and political drivers at different governance levels. There are also tensions between aspirations for economic and technical ‘optimisation’ of system developments and the complex realities of energy systems that are driven by a wide range of societal and political factors.

This programme will address a number of the above challenges through a coherent programme of projects that builds on engineering and social science research carried out in UKERC phase 2. It investigates energy systems at local, regional, national and international scales along with temporal issues that are critical to deliverability and the impacts on costs and reliability. The programme’s engineering analysis will be complemented by research on regulatory frameworks, market design and the politics of policy interactions between EU and UK levels.

It will include particular collaborations with other programmes (Future Energy System Pathways, Resources and Vectors and Decision Making) addressing the influences of policy decisions at different scales in analysis of energy system performance and costs.

Sub-Programme 1: the energy system in the UK

Within the practical limits of computational complexity and data management, whole energy system analyses can only provide realistic results if the relevant factors and constraints are included. As has been noted under the Future Energy Systems Pathways programme, potential energy pathways for the UK depend on a range of factors. Notably, these include the impacts on energy system operation of temporal issues such as variability of renewables and the availability and cost of demand side management, and spatial factors such as limits to energy transfers across the UK and the resource potential and cost of development in each region. In respect of offshore resources, not least wind power, the extent to which investment to exploit them will take place depends on technical, environmental, economic and regulatory issues.

This sub-programme focuses on developing methods and data to allow coherent analyses to be carried out to inform policy and business decision making. In addition to the priority projects under this sub-programme, it will include research on GB energy trading arrangements to better facilitate system balancing involving a larger number of energy system actors (linked to the Demand side response decisions project within the Decision Making programme). It will also help to inform (and be informed by) research on UK-EU interactions in sub-programme 3.

Sub-Programme 2: local energy systems

There has been significant research on the potential contributions that electrification of heat and transport, distributed generation and demand side management might make. The extent and rate of development of these are highly uncertain and depend, to a large degree, on behavioural issues explored in the Decision Making programme as well new engineering opportunities facilitated by ‘smart grids’. It also depends on the way in which disparate actors’ priorities and available capital can be mobilised to exploit these opportunities and the extent to which policy incentives are in place to facilitate more local energy development. Experience to date suggests that this requires coordination through local institutions, not least Local Authorities. An initial project is proposed that will consider the technical, organisational and governance dimensions of local energy developments. Further research in this sub-theme could address new arrangements for operation of electricity, gas or heat distribution networks that better facilitate distributed generation, demand side management and storage.

Sub-Programme 3: the UK within the European energy system

Developments in the UK energy system have been increasingly shaped by interactions with neighbouring countries, European policies and regulations, and by powerful actors such as large energy firms. The result of the 2016 referendum throws the future nature of these interactions into doubt.

While the 2020 EU climate and energy package, together with moves towards liberalisation and market integration, have already had important impacts for Member State energy policies, they have also been controversial. Debates about the next set of targets for 2030 have exposed tensions within the EU (most notably about a further EU renewable energy target). Against this background, this sub-theme is concerned with understanding the tensions and trade-offs in European energy policies, with a particular emphasis on the interaction between policies and politics at the UK and EU27 levels.

While the original intention of this work was to address issues of market and regulatory co-ordination and the extent to which greater co-ordination and harmonization could help meet EU and UK policy goals more effectively, it has been refocused to study the impact of Brexit and the risk of reduced coordination. For example, development of greater interconnector capacity could give the UK access to hydroelectricity in northern Europe or to gas storage facilities in other Member States, but might be impeded by trading frictions or a lack of political will to develop new projects.