A new study from the Carbon Trust suggests a fully flexible energy system could cut the cost of reaching net zero by up to £16.7 billion ($23.6 billion) a year in 2050.
The study, believed to be among the first of its type, was aimed to assess the system level value of deploying flexibility in the energy sector and the other key areas of heat, transport and industry.
While flexibility is well understood to be key in a net zero system and that it can lead to deferral or avoidance of investments in the networks and generation, pressures to reach net zero by 2050 are forcing a closer look at its delivery and potential with both current technologies such as batteries and emerging sources such as hydrogen.
The new study addresses the topic through different heating decarbonisation pathways under low and high flexibility scenarios, with heating selected as having the greatest uncertainty but also the most impact on the shape and form of the energy system. These are electric heating, hybrid predominantly heat pump heating and hydrogen heating, with the reality likely to be a mix of these.
The analysis found that across the scenarios, flexibility always delivers a net saving ranging between £9.6-16.7 billion/year ($13.6-$23.6 billion/year) and supports a cost-effective decarbonisation of the energy system.
This value is delivered by a portfolio of flexibility technologies including battery storage, thermal storage in homes and integrated with heat networks, interconnectors to Ireland and continental Europe and a range of demand-side response technologies across domestic, non-domestic and electric vehicle (EV) demands.
The savings predominantly come from avoidance of gas generation, reduced reliance on carbon negative technologies such as carbon capture and storage and reduced network reinforcement.
High levels of flexibility deployment are required from different sources to help deliver the scale of savings in a net zero system. The scenarios envisage up to around 48GW of flexibility from EVs, 12GW from domestic smart appliances, 11GW from non-domestic demand side response, 83GW of battery storage and 900GWh of thermal storage.
“Flexibility is vital to unlock value and it is the most important ‘no regrets’ action that can be taken as the UK moves to decarbonise heat, transport and industry, saving billions in investment and operating costs,” said Tom Delay, Chief Executive of the Carbon Trust, of the findings.
“It’s critically important that industry, business, consumers and the public sector understand the value of flexibility and the benefits that flexibility brings to the British economy. Flexibility always delivers – we should invest in it now.”
Opportunities and barriers
A key outcome of the study is the importance of sector coupling or smart sector integration as it is also termed, with the need to embed flexibility across all energy sectors, power, heat and transport.
There are, however, various barriers to delivering flexibility, particularly around domestic and non-domestic demand-side response. In both cases, the main ones are stakeholder acceptance and willingness to pay with issues around technology such as smart meters and the benefits versus the risk.
EVs and electricity storage broadly don’t face significant barriers or those that have been identified are likely to be overcome in time. However, thermal and hydrogen storage still face numerous barriers to deployment, particularly around enabling infrastructures and their financial performance.
Obviously, the analysis is applicable only to the UK and will be markedly different for other markets, particularly those without high heating requirements. Nevertheless, for any countries looking towards net zero, investment in flexibility needs to be stepped up without delay.
The analysis was undertaken by Imperial College with support from utilities and other sector stakeholders.