Environment and Climate Change Committee
Wednesday 21st October 2026
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10:00
Speaker 1
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Speaker 1
It's technology developers such as Infinity Off Grid Energy Labs and Store Electric, who are working on novel battery technologies and compressed air energy storage, which we'll touch on in the session. We work with academics at Durham and Keele University, and another a number of other organisations, such as the British Geological Society. So a broad church of members focused on progressing the agenda for long duration energy storage. And lastly, in terms of that introduction, it would be it would be remiss of me not to acknowledge the relationship we have with the Long Duration Energy Storage Council.
And it's through their kind introduction that we are joining you today with this opportunity to, to, to offer evidence to the committee.
And it's through their kind introduction that we are joining you today with this opportunity to, to, to offer evidence to the committee.
10:00
10:01
Speaker 2
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Speaker 2
Good morning chair. Good morning Committee. Thank you for inviting me. I'm Nick Smales, I'm director of special projects at the Faraday Institution. The Faraday Institution is the UK's leading battery science research organisation. We fund research into batteries in academia. We also have an early stage commercialisation capability, where we take the discoveries from our science and seek to accelerate them to market. We are funded through the Department of Business, Innovation, Science and Technology. We started in 2017 out of industrial strategy. We've done three years analysis into ultra long duration energy storage requirements for batteries. And I look forward to sharing more of that with you during the session.
10:01
Baroness Sheehan
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Baroness Sheehan
Excellent. Thank you both very much. The evidence we've received so far has emphasized the need for a diverse portfolio of low carbon storage and dispatchable power solutions beyond 2030 to address risks. What is the added value of long duration energy storage technologies such as pumped hydro, compressed air, or ultra long duration batteries compared to low carbon dispatchable power? Andrew, would you like to make a start on that one?
10:02
Speaker 1
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Speaker 1
Yeah, sure. Sure. Happy to. And apologies in advance if I keep looking at my looking at my notes. There's a there's obviously it's quite a broad subject. So I'm keen to, to, to try and make sure I don't miss, you know, kind of miss the opportunity to, to, to, to share our perspective. I think, I think I'd like to focus on two elements in relation to this question. One is, is, is a kind of an obvious one. And I'm, I'm sure it's, it's well known to the committee, but also I mentioned it briefly, that is around security of supply and energy security.
So particularly with low carbon dispatchable generation in particular, that that is fuelled by fossil fuels, you know, with domestic production in decline. You know, notwithstanding this morning's announcement, I see around around the green light for jackdaw to progress. You know, we are on a one way street to increasing import dependence, you know, for fossil fuels. And I think by the middle of the next decade, you know, kind of I'll talk kind of periodically about 2035 as a, as a sort of a, an anchor point. I appreciate that everyone else has different anchor points. The reason I choose that one is that's kind of the end of the system operators current ten year forecast.
And it's also happens to be the time frame within which we can realistically think about making changes to the outcome when it comes to capital intensive storage storage development. So by that, by the middle of next decade, I think we're estimated to be around 80% dependent on fossil fuel imports, natural gas. So that that, you know, given the challenges we're living through today and did you know back in 2022, I think everything we can do to try and break that dependence on imported primary energy is, is, is valuable. I appreciate low carbon dispatchable power has other, you know, has other technologies in its in its armoury, including for example, hydrogen to power will maybe touch more touch briefly on hydrogen to power.
And it's it's kind of relative merits as we go through the technology, you know, kind of section of the the conversation. But I think the main point in terms of adding value, I think I wanted to just bring to the committee's attention, again, apologies to those who already kind of already see this. If we look again at the mid 2030s, you know, we we sort of give or take , the current forecasts are are anticipating that we would require around 29, 30 terawatt hours of generation output from unabated at the moment, gas fired generation. So that's not a massive amount, you know, kind of against a backcloth of.
You know, by that point in time, over 300 terawatt hours. So it's still a marginal supply. But but the point I kind of want to make in relation to that is at the same time, we're forecasting to be curtailing increasing quantities of renewable generation. So to, to again, to use the system operator's numbers, most recent numbers by mid by 2035 curtailment. And they forecast what's called economic curtailment. And for the committee's benefit, that's when the system is long is we're generating more electricity than we can consume. It's not a locational issue. It's just a it's just an energy balance issue.
So that economic curtailment is forecast to rise from not very much today, you know, a couple hundred megawatts, a couple hundred gigawatt hours today. Sorry to something approaching 50 terawatt hours. So that is yes. Yeah. Sorry, chair.
So particularly with low carbon dispatchable generation in particular, that that is fuelled by fossil fuels, you know, with domestic production in decline. You know, notwithstanding this morning's announcement, I see around around the green light for jackdaw to progress. You know, we are on a one way street to increasing import dependence, you know, for fossil fuels. And I think by the middle of the next decade, you know, kind of I'll talk kind of periodically about 2035 as a, as a sort of a, an anchor point. I appreciate that everyone else has different anchor points. The reason I choose that one is that's kind of the end of the system operators current ten year forecast.
And it's also happens to be the time frame within which we can realistically think about making changes to the outcome when it comes to capital intensive storage storage development. So by that, by the middle of next decade, I think we're estimated to be around 80% dependent on fossil fuel imports, natural gas. So that that, you know, given the challenges we're living through today and did you know back in 2022, I think everything we can do to try and break that dependence on imported primary energy is, is, is valuable. I appreciate low carbon dispatchable power has other, you know, has other technologies in its in its armoury, including for example, hydrogen to power will maybe touch more touch briefly on hydrogen to power.
And it's it's kind of relative merits as we go through the technology, you know, kind of section of the the conversation. But I think the main point in terms of adding value, I think I wanted to just bring to the committee's attention, again, apologies to those who already kind of already see this. If we look again at the mid 2030s, you know, we we sort of give or take , the current forecasts are are anticipating that we would require around 29, 30 terawatt hours of generation output from unabated at the moment, gas fired generation. So that's not a massive amount, you know, kind of against a backcloth of.
You know, by that point in time, over 300 terawatt hours. So it's still a marginal supply. But but the point I kind of want to make in relation to that is at the same time, we're forecasting to be curtailing increasing quantities of renewable generation. So to, to again, to use the system operator's numbers, most recent numbers by mid by 2035 curtailment. And they forecast what's called economic curtailment. And for the committee's benefit, that's when the system is long is we're generating more electricity than we can consume. It's not a locational issue. It's just a it's just an energy balance issue.
So that economic curtailment is forecast to rise from not very much today, you know, a couple hundred megawatts, a couple hundred gigawatt hours today. Sorry to something approaching 50 terawatt hours. So that is yes. Yeah. Sorry, chair.
10:06
Speaker 1
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Speaker 1
It increases primarily because of the increasing penetration of intermittent renewable generation onto the grid. So as we you know, as we deliver the, you know, the already committed and potentially likely future committed offshore wind, onshore wind and solar. So you just simply you're the installed capacity grows so much greater than the average.
10:07
Speaker 1
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Speaker 1
Sorry. Grid. No, not no not in this instance. I'll come back to it. So curtailment has two limbs. And they're both important because the solutions are different. So I'll very briefly close on on economic curtailment. So first nearly 50 terawatt hours. So that's electricity that could be made available to the consumer and to the market, but isn't because there isn't enough demand at that point in time. Now just to finish to take your point, chair, then on what's called congestion related curtailment. So that's when there is demand on the system. But we can't get the electricity from A to B.
So that's what we're experiencing primarily today. And the committee will be aware that in 2025, almost ten terawatt hours of electricity was curtailed due to congestion. Now, you know, in in kind of simple terms, that's about the same, the equivalent to the output from our largest operating nuclear plant for the whole year. We basically turned that off for a whole year because we couldn't get electricity from A to B. That will in part be resolved by the great grid upgrade, but at extraordinary cost. I think the recent Nao report suggested that by the end of the next decade, we could be spending well over £150 billion on grid upgrades if we follow the current trajectory.
But it isn't. It will never, never be fully resolved. So although Nestle themselves don't forecast congestion related curtailment, there are well known and well renowned industry experts out there who do. And again, they're they're they're forecasting that congestion related curtailment could also be up to around 50 terawatt hours by the middle of the next decade. So you could be looking at 100 terawatt hours of electricity generation lost to the system. It could have been generated. The assets were there, they were installed and operating, but they just couldn't, you know, the the turbine blades were locked or the breakers were, you know, the breakers were open.
The reason that that I think that that talks to, you know, as, you know, kind of as as yet underexplored value of long duration energy storage is if we can. So if we can store that energy and not even all of it, in theory, we could displace all of that unabated gas from the system in 2035. So the system on an annualized basis is long in energy. The problem we have is a temporal one. You know, where we we can't put the we can't supply the electrons at the time that the customer needs them. That's obviously where storage comes in.
Now I'm not this is a this is a gross simplification. And I'm not trying to suggest that the answer is retire all the gas generators and and replace them all with storage assets. Because there are challenges, particularly in the context of this inquiry, around those extended duration events where the there may be a significant call on those assets. But the point is.
So that's what we're experiencing primarily today. And the committee will be aware that in 2025, almost ten terawatt hours of electricity was curtailed due to congestion. Now, you know, in in kind of simple terms, that's about the same, the equivalent to the output from our largest operating nuclear plant for the whole year. We basically turned that off for a whole year because we couldn't get electricity from A to B. That will in part be resolved by the great grid upgrade, but at extraordinary cost. I think the recent Nao report suggested that by the end of the next decade, we could be spending well over £150 billion on grid upgrades if we follow the current trajectory.
But it isn't. It will never, never be fully resolved. So although Nestle themselves don't forecast congestion related curtailment, there are well known and well renowned industry experts out there who do. And again, they're they're they're forecasting that congestion related curtailment could also be up to around 50 terawatt hours by the middle of the next decade. So you could be looking at 100 terawatt hours of electricity generation lost to the system. It could have been generated. The assets were there, they were installed and operating, but they just couldn't, you know, the the turbine blades were locked or the breakers were, you know, the breakers were open.
The reason that that I think that that talks to, you know, as, you know, kind of as as yet underexplored value of long duration energy storage is if we can. So if we can store that energy and not even all of it, in theory, we could displace all of that unabated gas from the system in 2035. So the system on an annualized basis is long in energy. The problem we have is a temporal one. You know, where we we can't put the we can't supply the electrons at the time that the customer needs them. That's obviously where storage comes in.
Now I'm not this is a this is a gross simplification. And I'm not trying to suggest that the answer is retire all the gas generators and and replace them all with storage assets. Because there are challenges, particularly in the context of this inquiry, around those extended duration events where the there may be a significant call on those assets. But the point is.
10:10
10:10
Speaker 1
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Speaker 1
Yeah. The the point is that there is an asset, you know, that actually at the moment is being viewed increasingly in the public domain as a problem, which is curtailment, you know, and, and I might say personally concerned that that will be become a poison pill, which , which affects the continued progression of progressive implementation of renewable electricity generation, because there will be too much emphasis on, well, why are we paying, you know, wind farm operators not to operate?
10:10
10:11
Speaker 1
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Speaker 1
It's exactly I mean, I think that's the and when we talk about, you know, cost competitiveness, we'll come back to that a little bit later on. But if you if you take a simplified view of the world and say that those those electrons are free at the point of supply, now, that is overly simplified because there could be other use cases for them, you know, industrial growth, so on and so forth. But most, most energy storage technologies would actually compete reasonably well with unabated gas. If you if they're being supplied by electricity that otherwise would not have been, you know, not have been produced.
So it changes the I think it does change the dynamic and the energy system. And it makes it really, you know, obviously very important that we get after harvesting those, you know, removing that opportunity cost. Yeah.
So it changes the I think it does change the dynamic and the energy system. And it makes it really, you know, obviously very important that we get after harvesting those, you know, removing that opportunity cost. Yeah.
10:12
Speaker 2
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Speaker 2
Well, I was going to talk about batteries in particular. So no, we agree with you that a diverse portfolio will be required from 2030. But we think that batteries over 100 hours of storage can play a very significant role. So unlike combined cycle gas turbines with carbon capture and storage, so three terawatt hours of ultra long duration energy storage could absorb and use the surplus energy that you've just been discussing with.
10:12
Baroness Sheehan
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Baroness Sheehan
10:13
Speaker 2
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Speaker 2
We are funding research now. We've started research programs in novel technologies. So there's aluminium and iron in particular. We think they can reach very low costs, which could compete very much with unabated gas and all the low carbon technologies. Your next question is about timing, but we think the research will take another 5 to 7 years. We think the scale and that will get us to a large scale demonstrator in megawatt hours. We think the scale up to gigawatt hours would then take 2 to 3 years, so these things would be available in the second half of the 2030s, and then they're much easier to make than lithium ion and sodium ion.
And we think we could mass make them in the UK , design and manufacture in the UK. And we believe they could be deployed in terawatt hours by 2050.
And we think we could mass make them in the UK , design and manufacture in the UK. And we believe they could be deployed in terawatt hours by 2050.
10:14
Baroness Sheehan
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Baroness Sheehan
Time is already slipping away. I would be very interested. I'm sure the committee would be very interested to hear more about the state of readiness and the time frames involved in some of these technologies. We talked about compressed air, liquid air, also, these mechanical sources of energy would be of real interest to us as opposed to stuff that we have to burn. So, Baroness. Lord trees indeed.
10:14
10:14
Lord Trees
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Lord Trees
To some extent you've asked and you've answered the question due to us really. I mean, we the government, we understand, is launch funding scheme for ultra duration storage projects in September 2026, which is quite late, but could we just could you put a bit more flesh on what you've indicated? I mean, particularly , to what extent does battery technology a question of just scaling up the technology we have currently, a lot of which is on lithium and so on. Or to what extent are these new, newer technologies? The only way to satisfy the scale we're going to need?
And to what extent then, are they likely to be deliverable within the time course we have?
And to what extent then, are they likely to be deliverable within the time course we have?
10:15
Speaker 2
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Speaker 2
Oh excuse me, lithium ion and sodium ion will not deliver the economics for ultra long duration energy storage because ultra long duration energy storage assets will be cycled very infrequently. Our modelling is 8 to 10 times a year, so they have to be very cheap. So our target is £11 per kilowatt hour to £15 per kilowatt hour installed. And the only chemistries or technologies that will do that are aluminium and iron. And we've done a lot of research on that. And the electrolyte has to be aqueous. So it has to be water to to reach those costs.
The research into aluminium and iron, there's been a significant amount of research globally, but nothing like lithium ion and sodium ion because they've been driven by the electric vehicle market. And aluminium and iron are not going to be inside a car ever, because you can't get the power out of them. But they are, in theory, much simpler chemistries to scale than lithium and sodium, because things don't have to be exact. You don't need dry rooms, you don't need gigafactories anything like what you see in China. Aqueous aluminium, we think, can be manufactured very similarly to lead acid, which we already manufacture at scale in this country, and aqueous ion er we think will look more like a chemical plant.
And we have been manufacturing chemical plants in this country for decades and are quite good at it. So we think we can scale this and we think we can reach mass market within ten years.
The research into aluminium and iron, there's been a significant amount of research globally, but nothing like lithium ion and sodium ion because they've been driven by the electric vehicle market. And aluminium and iron are not going to be inside a car ever, because you can't get the power out of them. But they are, in theory, much simpler chemistries to scale than lithium and sodium, because things don't have to be exact. You don't need dry rooms, you don't need gigafactories anything like what you see in China. Aqueous aluminium, we think, can be manufactured very similarly to lead acid, which we already manufacture at scale in this country, and aqueous ion er we think will look more like a chemical plant.
And we have been manufacturing chemical plants in this country for decades and are quite good at it. So we think we can scale this and we think we can reach mass market within ten years.
10:17
10:17
Speaker 1
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Speaker 1
If it would be okay just before, if we're good before we move on from from the the second question around around battery technology and absolutely defer to Nick in regards to the art of the possible and, and the, the efforts towards that. I think from a, from an energy storage perspective, perspective and that of our members, we have a we've obviously got much more of a view on the here and now. And what can alternative battery chemistries do to help your transition the system in. In the period. Whilst we are pursuing transformational breakthroughs in in in technology, in terms of cost and scalability, the issue here is not really one around.
We don't have technology to store energy. We can store as much energy as we want. It's a question of cost. And it's a question to second extent. It's a question of land use. And how much land do you need to host those to, to kind of host the infrastructure. But but the point I just wanted to, to kind of briefly make here is so there are there are , there are mature technologies today, available technologies such as flow batteries, what are called redox flow batteries, including those kind of using vanadium and other electrolytes. And other alternative battery technologies such as zinc and zinc gel.
We have members who are working in both of those areas. They're available now to the market and ability to scale. Now they're unlikely to they are unlikely to achieve ultra long duration, but every every megawatt hour, a gigawatt hour you put on the front end of an event because a Dunkel floater doesn't start as a Dunkel floater, it starts as a supply demand gap. It's just how long is it going to run for? So the more you reserve your ultra long duration technologies for those low frequency, high impact use cases, the better. So if we can be harvesting that otherwise curtailed electricity in the short term, storing it in technologies that are that are ready, then we should be looking at we should be doing that now.
Obviously, we're we are doing that. The UK is doing that. It's got an internationally distinctive cap and floor scheme for long duration energy storage. But the decisions to the decisions that have been made around the technology that have been awarded or are minded to be awarded licences in that scheme, it's very narrow. It's all pumped storage hydro, well, it's 99% pumped storage, hydro and lithium ion batteries so that the to come to bring the point to conclusion that that that has sent a bit of a chilling effect through the alternative battery sector, inasmuch as is the UK actually interested in this type of technology to the point where, you know, we're talking to members who are concerned about who are concerned about whether they should continue with manufacturing activities in the UK, where they are manufacturing already in the UK , and other companies who are are declining the opportunity or the option to enter the UK market because they're concerned that actually what the UK is looking for is lithium and pumped storage hydro.
So it's it's a it's an issue, obviously, that we're discussing with regulators and with government. But I think the point, the point I wanted to make is there are technologies, battery technologies available in the interim, whilst, you know, Nick and the people working with them are working hard on delivering, you know, kind of a step change in cost and performance for the future.
We don't have technology to store energy. We can store as much energy as we want. It's a question of cost. And it's a question to second extent. It's a question of land use. And how much land do you need to host those to, to kind of host the infrastructure. But but the point I just wanted to, to kind of briefly make here is so there are there are , there are mature technologies today, available technologies such as flow batteries, what are called redox flow batteries, including those kind of using vanadium and other electrolytes. And other alternative battery technologies such as zinc and zinc gel.
We have members who are working in both of those areas. They're available now to the market and ability to scale. Now they're unlikely to they are unlikely to achieve ultra long duration, but every every megawatt hour, a gigawatt hour you put on the front end of an event because a Dunkel floater doesn't start as a Dunkel floater, it starts as a supply demand gap. It's just how long is it going to run for? So the more you reserve your ultra long duration technologies for those low frequency, high impact use cases, the better. So if we can be harvesting that otherwise curtailed electricity in the short term, storing it in technologies that are that are ready, then we should be looking at we should be doing that now.
Obviously, we're we are doing that. The UK is doing that. It's got an internationally distinctive cap and floor scheme for long duration energy storage. But the decisions to the decisions that have been made around the technology that have been awarded or are minded to be awarded licences in that scheme, it's very narrow. It's all pumped storage hydro, well, it's 99% pumped storage, hydro and lithium ion batteries so that the to come to bring the point to conclusion that that that has sent a bit of a chilling effect through the alternative battery sector, inasmuch as is the UK actually interested in this type of technology to the point where, you know, we're talking to members who are concerned about who are concerned about whether they should continue with manufacturing activities in the UK, where they are manufacturing already in the UK , and other companies who are are declining the opportunity or the option to enter the UK market because they're concerned that actually what the UK is looking for is lithium and pumped storage hydro.
So it's it's a it's an issue, obviously, that we're discussing with regulators and with government. But I think the point, the point I wanted to make is there are technologies, battery technologies available in the interim, whilst, you know, Nick and the people working with them are working hard on delivering, you know, kind of a step change in cost and performance for the future.
10:21
10:21
Speaker 1
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Speaker 1
I well, so I guess in principle there aren't any, you know, there's enough land in the UK to, to, to host the battery storage technologies we need. But there is competition for that land, whether it's agriculture, you know, whether it's residential. So we can't you know, we already we're already we're already obviously taking land out of rural use for the purposes of renewable generation. We have to kind of be mindful about how much pressure we put on, we put on, put on sort of relative, particularly relatively scarce high quality farmland and so on and so forth.
And the natural.
And the natural.
10:22
10:22
Speaker 1
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Speaker 1
Yeah. So we'll maybe come to that in, in, in the balance of the conversation. So there are some technologies, obviously things that store energy in bulk kind of and are sure storing energy vector in bulk. So compressed air, natural gas and compressed air being kind of the most obvious examples. They will go underground. Most of the other technologies are likely to be located on the surface.
10:22
10:22
10:22
10:23
Speaker 2
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Speaker 2
So the iron and aluminium batteries, we're talking about the target of £11 to £15 per kilowatt hour installed. That's a capital cost. And that's everything. That includes the land, the service roads, the concrete, all the electrics. It does not include the grid connection. And the energy density. So the amount of energy you can put per square meter on a side is ever so important to the overall cost. And at that cost they compete with unabated gas. A vanadium battery, I'm afraid, has a very low energy density. You just can't get very much energy because you've got a great big store.
But the store takes up a lot of space and their cost is well north of £100 per kilowatt hour installed. And unfortunately, there's not enough vanadium in the world to to deliver all the stories we're talking about in terawatt hours. So zinc is, is, is, is possible, but it's still, we don't believe can reach the 11 to £15 per kilowatt hour. And the last thing I would say is on, on the ultra long duration storage batteries, we are trying to deliver security of supply to the system. So we're trying to say for the unabated or the gas that currently delivers security supply, we're trying to replace that at the same or lower cost.
And then the fact that you can store energy and make it available to the system , store very cheap energy, free energy, effectively or possibly and make it available to the system gives you multiple savings for the UK. So it's 3 billion a year we're talking about in our modelling. So but it's replacing security. Sorry.
But the store takes up a lot of space and their cost is well north of £100 per kilowatt hour installed. And unfortunately, there's not enough vanadium in the world to to deliver all the stories we're talking about in terawatt hours. So zinc is, is, is, is possible, but it's still, we don't believe can reach the 11 to £15 per kilowatt hour. And the last thing I would say is on, on the ultra long duration storage batteries, we are trying to deliver security of supply to the system. So we're trying to say for the unabated or the gas that currently delivers security supply, we're trying to replace that at the same or lower cost.
And then the fact that you can store energy and make it available to the system , store very cheap energy, free energy, effectively or possibly and make it available to the system gives you multiple savings for the UK. So it's 3 billion a year we're talking about in our modelling. So but it's replacing security. Sorry.
10:25
Baroness McIntosh of Pickering
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Baroness McIntosh of Pickering
The land use framework said that 10% of agricultural land. Prime agricultural land potentially could be taken out of use. A much bigger issue is there's a revolt in the countryside against these, and particularly the battery storage units that are being built on the back of people's homes. There have been told that obviously, they've got sort of to evacuate in the event of a fire. Why can these not be built adjacent to factories? Why are they being built on? I honestly believe there is going to be a riot in the countryside if this persists.
10:25
Speaker 2
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Speaker 2
I live in the countryside and I don't want to see batteries built beside my house. So we believe that these batteries firstly need to be built very close to where the offshore wind makes landfall, because this is really firming up wind generation, so it's turning wind into something closer to baseload.
10:26
10:26
10:26
10:26
Speaker 2
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Speaker 2
The mega sites we call them would be, and they would potentially sit on sites that are currently marked for gas turbines for combined cycle. Thank you. So the other thing, can I can I just say there you might have heard me say aqueous. So the safety of iron air and aqueous aluminium, we believe will be they will be significantly safer and not prone to thermal runaway like lithium ion.
10:26
10:26
10:26
10:26
Baroness Coffey
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Baroness Coffey
Hello. Mr. MacNeil, I know Mr. Smith. You've been working on this for some time. Energy systems, capital, and we've heard about the length of time it will take to get the solution that everybody is aiming for. There's another. And you've started going into this about compressed air and liquid air energy storage in the UK. I remember being a brand new MP 15 years ago or whatever, telling me it was the future then, and it's I just wanted to get a sense of how much storage capacity these technologies expected to contribute, the briefing says, by 2040, but I'd like to know by 2030 and 2040.
10:27
Speaker 1
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Speaker 1
Should I take that? So so if we if we talk specifically about compressed and and and liquid air. So these are these are effectively proven technologies. So there's not a lot of technology risk left. And we know how to compress air. We know how to liquefy it. You know, the. So they're kind of ready and available for use in terms of the their footprint on the UK currently is pretty modest. So one very positive thing, despite my, my sort of critical remarks in, in relation to the technology diversity or lack of it in the cap and floor window, one, you know, kind of minded to list is there is one compressed air storage project and there it's relatively modest in terms of its scale, 15MW generation, but it has a 30 hour, sorry, in terms of capacity, but it's a 30 hour duration.
So it's a it's starting to it's demonstrating that you can quite readily scale that technology to deliver over, over longer, over longer durations. So, so there is, there is some sign of progress in relation to compressed air. Compressed air works in two contexts. You either put it in tanks on the ground, and then it's a little bit like any other form of surface storage, a battery or whatever. Or you in the case of this project, which is with Store Electric on Teesside, you put it in a salt cavern. Now these happen to Even though these happen to be existing salt caverns, but where you have a much bigger tank that you can, you can kind of operate.
So they have a compressed air in particular has a potential to scale under the, you know, kind of .
So it's a it's starting to it's demonstrating that you can quite readily scale that technology to deliver over, over longer, over longer durations. So, so there is, there is some sign of progress in relation to compressed air. Compressed air works in two contexts. You either put it in tanks on the ground, and then it's a little bit like any other form of surface storage, a battery or whatever. Or you in the case of this project, which is with Store Electric on Teesside, you put it in a salt cavern. Now these happen to Even though these happen to be existing salt caverns, but where you have a much bigger tank that you can, you can kind of operate.
So they have a compressed air in particular has a potential to scale under the, you know, kind of .
10:47
Speaker 1
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Speaker 1
What do you think will happen though, and liquid air as well. So, so on liquid air, there were projects that bid into the cap and floor window. One, they were not successful. The company many of you may be aware of Highview who are who are currently building, you know, outside of the cap and floor scheme, a commercial scale facility at Carrington in Manchester that will actually hopefully come online. relatively imminent, you know, kind of. They're not a member of our. So I can't speak authoritatively, but they're making progress so that we will have we will have I think that's a.
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Speaker 1
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Speaker 1
But they are still forecast to be peripheral technologies. Okay. I would just if you bear with me, sorry, very, very briefly on compressed air, I think the the. distinguishing or the distinctive fact factor around compressed air is its ability to utilize underground storage. We are currently using a fraction of the salt carbon storage potential that the UK has. Salt caverns are very good for storing energy,
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Speaker 1
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Speaker 1
And Dorset are the two well, but we also they are available in shallow water offshore, but that obviously. complicates complicates development. But we should I think we should increasingly be looking at our salt cavern capability as a strategic asset, and then deciding what would be the best use of that between .
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Speaker 1
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Speaker 1
Less energy dense than in terms of hydrogen. Yeah. Because than hydrogen, because you're not combusting, you're not releasing chemical energy. You're just. releasing potential energy in the, in the form of pressure. So give or take some somewhere in the region of. 10 to 15 times less energy dense than the equivalent amount of hydrogen. So that might lead you to say, well, why don't we put hydrogen in these tanks? The challenge is you have to look beyond that and look at, you know, largely look at first round trip efficiency. How much electricity do you have to use to generate the hydrogen to generate the power?
And with the best will in the world, you know, the sort of the current round trip efficiency for hydrogen is high.
And with the best will in the world, you know, the sort of the current round trip efficiency for hydrogen is high.
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Lord Ashcombe
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Lord Ashcombe
My question. Thank you very much, Lord Ashcombe. Thank you. Chair. I'd like to turn to to to water and what have you. What is the. potential for the new pumped. hydro and the pump. thermoelectric storage in the UK, and what are the barriers and delivery timescales? And I'm very interested in the amount of land these are going to take up because as you mentioned earlier, there's a lot of pressure on on space, particularly in the South.
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Speaker 1
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Speaker 1
So so I mean, I think obviously the UK has got relatively proud history in pumped storage hydro and but we haven't built any for 40 years. So, so as I said, the, the big. success story from the cap and floor window, one which is intended to facilitate the next the next wave of long duration energy storage.
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Speaker 1
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Speaker 1
You can only build conventional pumped storage hydro where you have enough of a height difference, and you can have fresh water storage at at the sort of the top and the bottom. So those projects are all reasonably mature. We don't we don't we don't have a follow the, the pumped hydro storage sector closely because there's another trade association there, the British Hydropower Association, who do a very good job there. So so the potential is there you know, we're we're banking on it, you know, so in order to deliver, you know, long duration energy storage requirements for the middle of the next decade, those projects need to be delivered.
There are obviously will be risks associated with delivering any large capital project. I would hazard a guess that those three projects .
There are obviously will be risks associated with delivering any large capital project. I would hazard a guess that those three projects .
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Speaker 1
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Speaker 1
And when would they when are they going to be so they are currently slated to come on. I think one is. 2030 and the other two are 2033. But typically the lead time from final investment decision to commissioning on a pumped storage hydro project could be anywhere. between 5 and 10 years. Then obviously, the civil engineering projects on a colossal scale. So but the developers are committed to, you know, kind of to, to delivering those. And some of those are quite obviously some quite serious companies such as SSE, you know, who I think have the largest of those projects.
And Corey Glass, I would I would like to just very briefly, you know, kind of you you mention other forms of pumped storage hydro.
And Corey Glass, I would I would like to just very briefly, you know, kind of you you mention other forms of pumped storage hydro.
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Lord Ashcombe
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Lord Ashcombe
So you may be familiar with high density pumped storage hydro. Sorry, will you do? It seems from the notes that in the briefing we've got that still the long the the amount of power it's going to produce over any length of time is pretty modest. And we're spending huge amounts of money and it's still ten years away, which seems to be the magic .
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Speaker 1
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Speaker 1
It seems we're some distance away. The bar. The reason that that that the reason that that timeline has kept moving out is, has largely been not to do with, you know, project. pipeline or project definition that's been to do with revenue certainty. So in a, in a, in a rapidly changing energy market, without the cap and floor scheme, there were not the, you know, there were not the, the, there wasn't a policy .
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Speaker 1
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Speaker 1
Projects were made any sense commercially. Definitely a key barrier to. So that was a key. That was a key barrier. The cap and floor scheme has been designed and implemented. I have to say, obviously it hasn't yet been proven because it will be proven when projects take final investment decision, which is likely to be, I think the earliest realistically will be the middle of next year for projects in window one taking final investment decision. But they are. The quantities are modest in the grand scheme of things. Pumped storage hydro is not the solution to Dunkel floater, but it's part of the armoury that reduces the.
Reduces the load on ultra long duration. technologies by managing those higher frequency, lower impact events at the front end of the the supply demand gap district. distribution curve. It's also.
Reduces the load on ultra long duration. technologies by managing those higher frequency, lower impact events at the front end of the the supply demand gap district. distribution curve. It's also.
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Speaker 1
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Speaker 1
You know, because it's a mature technology, reasonably energy efficient. So you're looking at typically around 80% round trip efficiency. The reason I wanted to very briefly. mention a high density pumped storage hydro, because it's a slightly different prospect. It's an area where the UK government has. invested in through its low dose scheme, you know, with a company called.
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Speaker 1
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Speaker 1
Down on the Dorset coast, who have got a. demonstrator running now successfully. The key, the key benefit of of high density pumped storage hydro is it uses a high density fluid. So the fluid is two and a half times the density of water. So you need. 40% of the height difference to get the same amount of energy output. So it opens up a much .
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Speaker 1
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Speaker 1
Can you just comment a little bit on pump thermal? Yes. Sorry. So sorry. So pump, pump, thermal I would say is in its infancy in the UK in particular. And in fact, I'd say I'd say perhaps globally. It's a really exciting. technology because of its ability to scale and its ability to generate efficiency. But we've had limited traction in the in the UK, there is one, the one company, again, who was supported by the Loads scheme, which is synchro Store, who appeared to have done some great work on de-risking some of the the core technology at the middle of the project in the middle of the.
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Speaker 1
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Speaker 1
There are ten years is. probably well out there. In this case, I, I, yes, yes and no. So it all comes down to application of effort. You know, if the if the incentives are there, if the drivers are there to drive the level of, you know, kind of technology, technological innovation and development and stuff can be done very quickly. Again, the science and engineering is .
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Speaker 4
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Speaker 4
Let me order. What are the things that need to be addressed in terms of the batteries? The said they will not be allowed to generate or to optimise their revenues from participating in the market, because they are going to be used. primarily to, or in a way that is. consistent with. optimizing system security. And that has two implications. One, that that asset is going to have to be controlled by the system.
operator because it's a national asset, it needs to be there for.
operator because it's a national asset, it needs to be there for.
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Speaker 4
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Speaker 4
Will find, because this asset is not necessarily being used to. maximize revenue and return on investment, because the regime will be about security of supply rather than optimizing profit, they will find this a very risky asset. And therefore , there will need to be. payments to to make that to eliminate that risk, much as we do with nuclear and reserve generation today. So those would be the two for ultra long duration energy storage batteries.
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Speaker 1
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Speaker 1
Thanks for giving me a break. So I'll just kind of give the highlights of them. And if there's any, if there's any additional information you're kind of around, what's the details behind them? I'm happy to cover that. I think the first one I mentioned, it kind of briefly already is, is to improve demand signaling for, for long duration and ultra long duration energy storage. So everyone at the moment is trying to answer the question for themselves. And Nick and his team have spent an extraordinary amount of time and work trying to do this. There are consultants, there are bodies around.
I think we'd like to see a centralized view on what the actual demand, you know, the demand is for for energy, long duration and ultra long duration energy, energy storage, you know, and those, those that type of asset that will best serve the system. So that's one, I think. Second one links to my point around, you know, in your. introductory remarks, you said we need diversity, we need everything. I think we need to be encouraging diversity. It's too early to really to be picking winners in this space because we haven't done this for so long.
So if I look at the cap and floor scheme and the capacity market that currently exists, we should be further developing those to to make sure that we don't squeeze out promising technologies before they've had a chance to, you know, kind of develop and mature at the moment. It does feel like we're falling back on the, the trusted or trusted or proven technologies around hydro.
I think we'd like to see a centralized view on what the actual demand, you know, the demand is for for energy, long duration and ultra long duration energy, energy storage, you know, and those, those that type of asset that will best serve the system. So that's one, I think. Second one links to my point around, you know, in your. introductory remarks, you said we need diversity, we need everything. I think we need to be encouraging diversity. It's too early to really to be picking winners in this space because we haven't done this for so long.
So if I look at the cap and floor scheme and the capacity market that currently exists, we should be further developing those to to make sure that we don't squeeze out promising technologies before they've had a chance to, you know, kind of develop and mature at the moment. It does feel like we're falling back on the, the trusted or trusted or proven technologies around hydro.
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Speaker 1
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Speaker 1
Getting to the point where they could actually bid at a commercial scale for something like a cap and floor license. There's a there's a big difference when you're looking at grid scale development. There's a big difference between having a technology demonstrator and having a commercial project. That difference is, you know, kind of obviously in implementation is hundreds of millions of pounds, but even in speculative capital, it's tens of millions of pounds to get to the point where you can actually compete. So that would be a sort of related point, the sort of maybe the bigger.
policy ask would be. around better. integrating public. procurement across four key areas. So obviously long duration energy storage. We've spoken about that a lot, but linked to that are related processes around the allocation round process for renewable energy generation. So at the moment energy storage is the tail end. Charlie. We're trying to mop up after the, you know, after the the renewable generation has come on the system.
We need to get ahead of that. So we don't have this curtailment challenge. The , the transmission and.
policy ask would be. around better. integrating public. procurement across four key areas. So obviously long duration energy storage. We've spoken about that a lot, but linked to that are related processes around the allocation round process for renewable energy generation. So at the moment energy storage is the tail end. Charlie. We're trying to mop up after the, you know, after the the renewable generation has come on the system.
We need to get ahead of that. So we don't have this curtailment challenge. The , the transmission and.
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Speaker 1
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Speaker 1
Investment plan process. So at the moment, there's too much emphasis on grid. reinforcement to move peak volumes around the system with pylons and cables. If we're smarter with the way we use storage, we can minimise the need so that. £150 billion to the end of the next decade maybe doesn't need to be as much. If we are smarter about how and where we deploy those storage assets.
And the last part of that is the capacity market. But I think that's the you know, in terms of.
And the last part of that is the capacity market. But I think that's the you know, in terms of.
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Speaker 1
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Speaker 1
I mean. That was a great set up. Thank you for that question. That lets me kind of make another point very briefly, which is I think the contract for difference. process has now matured. So we've been running for many years. I think perhaps it's time to put a little bit more challenge back onto the, the developer side of that equation. And linking it to storage would be to, to ask them to take. responsibility for shaping or firming some of their delivery. At the moment, the developer just simply. generates whatever they generate. And then the system operators trying to work out how to balance it.
If we can get to a place where we start shaping some of that, as Nick was describing at the point of generation. So perhaps evolving the, the, the CFD. process to introduce an element of shaping requirements. So you don't as a developer, you then have to put some emphasis on storage. I don't mean to just turn it all on immediately, but that could be a sort of a ratchet mechanism over time that actually, as the generation technology matures and the market matures, we look in order to get the revenue certainty that they get from a CFD,
If we can get to a place where we start shaping some of that, as Nick was describing at the point of generation. So perhaps evolving the, the, the CFD. process to introduce an element of shaping requirements. So you don't as a developer, you then have to put some emphasis on storage. I don't mean to just turn it all on immediately, but that could be a sort of a ratchet mechanism over time that actually, as the generation technology matures and the market matures, we look in order to get the revenue certainty that they get from a CFD,
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Lord Trees
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Lord Trees
I mean presumably our current pumped storage, we we are operating from time to time, all the time to help balance the grid. And yet we only I live in Highland, Scotland and you know, we've got dams. everywhere and we only get something like. 5% of our. electricity from current hydro. So I can't believe that the.
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Speaker 1
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Speaker 1
Is that a fair point? I it's a point I wouldn't. necessarily agree with it, but I also I also I also live in the Highlands. I don't live too far from Cruachan, where one of the original pumped storage hydro schemes was. I think I think it comes back to we need, we need, we need everything. We genuinely do need everything. And, and, and I do agree with the point that when you look at the, the, so the, the total.
capacity that those three.
capacity that those three.
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Speaker 1
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Speaker 1
You know, three projects will deliver is about. 88 gigawatt hours in terms of storage capacity. So if you're looking at gigawatt, terawatt or terawatt hours, I appreciate that feels like a drop in the ocean. But I go back to my earlier point. We need everything you need to address. You need technologies that are better suited to addressing the front end of the. distribution of supply demand gaps, so that you can minimize the amount of investment you need to put into that break glass in case of.
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Lord Jay of Ewelme
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Lord Jay of Ewelme
So for the first question, Lord Jay, thank you. Thank you very much. Thank you very much for being with us today. We've we've heard, not least in the last session, that different technologies are on a different state of readiness for responding to rare events, weather lasting days or, or lasting weeks. You might want to say a little bit about that, but in particular, could you say something about the relative cost. effectiveness of different technologies? I think that's an issue on which we want to particularly wanted to, to, to focus.
And and.
And and.
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Speaker 8
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Speaker 8
Who who'd like to go first on that? You both look eager. Let's have a look. It was more like. framing point. Opening statement, if I may. And just before we start, because I do think is the right place to start, because we are building a system that is quite wind heavy, but also reflecting the fact that it's probably the wrong place to stop. Weather affects all technologies on the system, not just wind and solar. And we know that gas plants lose output in hot weather. This happened like this summer during the heat wave and nuclear rates when cooling water warms, interconnector fails.
And also one event that came quite close to breaking Britain in the last decade was during the beast from the East, when a cold snap essentially stressed the gas network. And so that was not a wind drought. So we would encourage the committee to ask for a resilience assessment across all types of weather like heat, cold, drought, storm, not just wind, drought. especially as our climate is changing and therefore the risk might differ tomorrow compared to today. And maybe then therefore addressing the the first question. So we've run a whole system comparison of kind of two.
And also one event that came quite close to breaking Britain in the last decade was during the beast from the East, when a cold snap essentially stressed the gas network. And so that was not a wind drought. So we would encourage the committee to ask for a resilience assessment across all types of weather like heat, cold, drought, storm, not just wind, drought. especially as our climate is changing and therefore the risk might differ tomorrow compared to today. And maybe then therefore addressing the the first question. So we've run a whole system comparison of kind of two.
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Speaker 8
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Speaker 8
One, where we honor the firm low carbon capacity. commitment from 2021. So investing a lot in CSE, in additional nuclear in packs and hydrogen, etc., and one which is more like cost conscious. scenario to understand like what the impact was on both knowing that that cost conscious scenario still does include obviously some nuclear, some CSE, but also has like a bit more like long duration energy storage, as we just mentioned in the previous panel, also like more.
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Speaker 8
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Speaker 8
But also maintains I think that's quite important, a large unabated gas fleet and also adds some like gas and diesel peakers as well, to ensure that we can address scarcity events appropriately. And the difference between the two is about. £80 billion over the. 2040s in terms of total system costs. So that's a reduction of average system cost by about. 10% in the 2040s. So the downside to having like a lower cost system is obviously a bit more emissions. We're talking about an extra. 6.1 million tonnes of carbon dioxide a year during the 2040s. And so put the two together, removing that that last.
slice of emissions from the power system costs roughly. £1,300 a tonne. So the question is whether. decarbonising the last. percentage of the power system is the best available use of money. And just to add a little bit, a little point on that, the reason I'm saying that is also this money problem is important, because the deeper problem is that by. decarbonising peaking capacity, we are risking adding enormous system.
slice of emissions from the power system costs roughly. £1,300 a tonne. So the question is whether. decarbonising the last. percentage of the power system is the best available use of money. And just to add a little bit, a little point on that, the reason I'm saying that is also this money problem is important, because the deeper problem is that by. decarbonising peaking capacity, we are risking adding enormous system.
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Speaker 8
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Speaker 8
Which would in turn slow down the pace of electrification. And it makes the electricity. We want people to switch to more expensive relative to gas and petrol. So it. disincentivizes exactly the sort of fuel switching and uptake of EVs, electric vehicles and heat pumps that we would like. And this is particularly important because. electrification of. society is. materially more meaningful to.
decarbonising the British economy than decarbonising the last few. percentage of power generation. So electrification probably brings more value for money when thinking .
decarbonising the British economy than decarbonising the last few. percentage of power generation. So electrification probably brings more value for money when thinking .
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Lord Krebs
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Lord Krebs
Miss, please. Yes, I was just going to I mean, I agree very much with everything you've just said. And we have very similar, similar results in our kind of core cost effective scenario. It's also around 6 million tonnes of carbon dioxide emissions per year in the in the 2040s from the power system, which is, as you said, actually, you know, that is a that is a relatively small proportion of the overall emissions in the economy at the time. And I think that point around the, you know, looking the broader point I was going to make, is it really you need to look at the whole energy system not focusing too narrow on the electricity system in terms of decarbonisation.
The other just on the kind of specific point around different technologies. I think the same applies when you look at technology. You need to look at the technology in the context of the system that it's deployed in. So there isn't a single silver bullet technology here, which is better than all others. You know, all.
The other just on the kind of specific point around different technologies. I think the same applies when you look at technology. You need to look at the technology in the context of the system that it's deployed in. So there isn't a single silver bullet technology here, which is better than all others. You know, all.
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Lord Krebs
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Lord Krebs
Their marginal value decreases as you deploy more of them. That's true of gas, of nuclear, of wind or solar of storage, because when you add an extra megawatt of a technology that is already widely deployed in the system, it is essentially largely competing with the other units of the same technology. So it's really a kind of a layered approach is what you what you need and what we what we have, where you, you know, at the moment, a lot of short duration storage is the most cost effective thing to be adding to the system because we have, you know, there is still a huge , there's still a lot of short term price spreads within day, which can be captured by short duration batteries.
And that helps reduce the amount of gas turn up that's needed on a short term basis. You know, as we build out more intermittent renewable generation, we will need to, you know, we will need to add longer duration storage, which is what you are already seeing happening with more for our batteries, for example, and longer duration batteries coming forwards and the, the need for ultra long duration storage arises only really when you get to very high penetration of renewables and you're really trying to, to drive out those last, last few tonnes of carbon emissions. So whilst it's definitely that those technologies have a role to play, it is in that kind of tail scenario rather than something that is, is would be .
And that helps reduce the amount of gas turn up that's needed on a short term basis. You know, as we build out more intermittent renewable generation, we will need to, you know, we will need to add longer duration storage, which is what you are already seeing happening with more for our batteries, for example, and longer duration batteries coming forwards and the, the need for ultra long duration storage arises only really when you get to very high penetration of renewables and you're really trying to, to drive out those last, last few tonnes of carbon emissions. So whilst it's definitely that those technologies have a role to play, it is in that kind of tail scenario rather than something that is, is would be .
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Lord Jay of Ewelme
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Lord Jay of Ewelme
Cost effective to deploy at scale today. The just one other question. The in the last session, one of our witnesses said that we need all we need to follow up on all technologies. I mean, do you do you think that's right or do you think there are some technologies which really are so unlikely to be part of the final mix .
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Speaker 8
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Speaker 8
That we need to. continue with them any more? I think, as was discussed in the previous panel, there is. A lot of. uncertainty as to when. technologies will get one proven technically, but also proven economically. And so when these technologies are proven both technically and economically, it would be great to implement them in the system. But because there is so much uncertainty as to what that timeline looks like, there is great value in keeping optionality in your system and the gas fleet for kind of like rare. events of, you know, like a couple periods a year of deep and long renewable.
shortfalls are appropriate for that answers until we get something that is as cost. effective and as technically proven, because a lot of the technologies that have been discussed so far in this committee are also, to some extent, unproven, even if there are like, obviously some prospects and we can be quite optimistic about them. But also when we think about the. reliability of a system, a reliability assessment is quite difficult to be made on technologies that can be a bit unproven and don't have .
shortfalls are appropriate for that answers until we get something that is as cost. effective and as technically proven, because a lot of the technologies that have been discussed so far in this committee are also, to some extent, unproven, even if there are like, obviously some prospects and we can be quite optimistic about them. But also when we think about the. reliability of a system, a reliability assessment is quite difficult to be made on technologies that can be a bit unproven and don't have .
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Lord Krebs
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Lord Krebs
Operations in the system. Mr.. Where do you so I agree, I think I would just to be a bit more kind of, well, to be a bit more more sharp about it, I suppose. I don't think we should be saying we need everything all at once. And I don't think, and I'm not sure that's the point that the previous witness was making. But I think the point around optionality and research and. development of a range of technologies is really important. That doesn't mean we should be racing to deploy everything at very large scale as fast as we can, because I think that is actually the recipe for a very expensive system that may not deliver the outcomes we need.
And I think there are certain technologies where, you know, they there has been a lot of research and development already, and the costs are not coming down. And, you know, I mean, it they look like a. relatively unlikely prospect of delivering value in the UK system. And sorry, that's one other point, which is every power system is different. And obviously the natural resources, the demand profiles, the weather patterns and climate of different countries are different. So what's suitable for one country is not necessarily suitable for the other. Take the case of floating offshore wind. The UK has quite a lot of sites where you can have fixed bottom offshore wind, whereas there are some countries like Japan, where you've got very deep waters very close to shore, and floating wind might be the only viable offshore wind solution so that there can be value in the UK developing technologies from a commercial and export potential.
That .
And I think there are certain technologies where, you know, they there has been a lot of research and development already, and the costs are not coming down. And, you know, I mean, it they look like a. relatively unlikely prospect of delivering value in the UK system. And sorry, that's one other point, which is every power system is different. And obviously the natural resources, the demand profiles, the weather patterns and climate of different countries are different. So what's suitable for one country is not necessarily suitable for the other. Take the case of floating offshore wind. The UK has quite a lot of sites where you can have fixed bottom offshore wind, whereas there are some countries like Japan, where you've got very deep waters very close to shore, and floating wind might be the only viable offshore wind solution so that there can be value in the UK developing technologies from a commercial and export potential.
That .
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Baroness Whitaker
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Baroness Whitaker
You very much. Thank you. Thank you, Baroness Whitaker, thank you very much for coming in. Following on that, really, I'd like to modify my brief here. What is the value, particularly the relative value of investing in firm. generation technologies that contribute to improving baseload. Obviously nuclear, but also particularly tidal and wave to reduce the amount of flexible. generation or storage that's.
required .
required .
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Lord Krebs
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Lord Krebs
Who would like to go first? I'll go first. So I think I would say that nuclear is not the same as wave, and it's not the same as tidal. They have very different characteristics. Each of them. Nuclear is a true baseload technology. It runs, you know, it should run at a capacity factor of 90% or more. Whilst it is technically capable of flexing its output, that is usually not. economically sensible because the majority of the costs, the vast majority of the costs are in building the asset. And you want you know, when you build a very expensive asset, you want to use it as much as possible.
So the costs come down where you do. There are some some advanced nuclear technologies which can flex their electricity output by diverting some of the heat from the reactor into a heat store and then or either using that heat or using that heat to turn to generate electricity. So that can have some flexibility. But the core technology is baseload, and tidal is not based on wind and tidal, obviously not baseload. They are. intermittent tidal with a fairly high degree of predictability. Wave, sorry wave, I mean not wind wave with much less flexibility and is much more correlated with wind output.
So the I think the answer is if we're going to be different between those. technologies with nuclear, again, you need to look at them all in a system perspective. So it isn't just about adding more nuclear capacity to the same system. You would be adjusting what other capacity is built. And so yes, with more nuclear, you would need less. flexible some some less flexible generation, less storage. You would also need less renewable capacity because otherwise adding nuclear will just curtail more renewables. But but there is, you know, you know, a system which has no nuclear capacity and is very heavily wind and solar.
dependent will almost certainly be lower cost with some nuclear capacity. Conversely, a system like France with huge nuclear capacity, adding more nuclear capacity is not a is you know, is unlikely to be cost effective. And and having more. renewables will be more cost effective. I think tidal it has, you know, there may be maybe benefits from tidal depending on the cost, but it is at the moment still an expensive. technology and it is still intermittent.
So it would .
So the costs come down where you do. There are some some advanced nuclear technologies which can flex their electricity output by diverting some of the heat from the reactor into a heat store and then or either using that heat or using that heat to turn to generate electricity. So that can have some flexibility. But the core technology is baseload, and tidal is not based on wind and tidal, obviously not baseload. They are. intermittent tidal with a fairly high degree of predictability. Wave, sorry wave, I mean not wind wave with much less flexibility and is much more correlated with wind output.
So the I think the answer is if we're going to be different between those. technologies with nuclear, again, you need to look at them all in a system perspective. So it isn't just about adding more nuclear capacity to the same system. You would be adjusting what other capacity is built. And so yes, with more nuclear, you would need less. flexible some some less flexible generation, less storage. You would also need less renewable capacity because otherwise adding nuclear will just curtail more renewables. But but there is, you know, you know, a system which has no nuclear capacity and is very heavily wind and solar.
dependent will almost certainly be lower cost with some nuclear capacity. Conversely, a system like France with huge nuclear capacity, adding more nuclear capacity is not a is you know, is unlikely to be cost effective. And and having more. renewables will be more cost effective. I think tidal it has, you know, there may be maybe benefits from tidal depending on the cost, but it is at the moment still an expensive. technology and it is still intermittent.
So it would .
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Lord Krebs
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Lord Krebs
Tidase twice a day, but waves are all the time, so the tide goes twice a day. But the tidal range changes a lot from from spring tide to neap tides. So there is a monthly pattern there, and you still need flexible generation and storage to manage that gap. But it would reduce the need for very long term duration beyond the month. But that's still a very long term duration. Waves. Do you know the amount of wave energy varies significantly with the amount of wind there is? So the height of the waves and and to date wave.
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Lord Krebs
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Lord Krebs
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Baroness Whitaker
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Baroness Whitaker
Scale being a cost effective option for the UK. Just to continue on wave I may isn't it the case, though, that the contracts for. difference system is really makes it difficult for wave to compete because Marie. Other forms of marine energy and certainly wind solar are more scaled up. But wave hasn't had that innovation .
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Lord Krebs
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Lord Krebs
From or from the public sector. The cost I think the contract for difference scheme is not primarily designed for. demonstration projects. Other other forms of innovation and deployment funding are better suited for those technologies because they are, because they are. pre-commercial and they are. It's very hard to raise capital for large scale. deployment on on technologies of that technology readiness level. So I think it it isn't it isn't.
particularly there are separate pots and separate clearing prices for wave, certainly for tidal energy in the CFD scheme. But you're not seeing.
particularly there are separate pots and separate clearing prices for wave, certainly for tidal energy in the CFD scheme. But you're not seeing.
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Speaker 8
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Speaker 8
I maybe I can just start . I think that. interconnections are in the power sector are extremely valuable for most of the year. It helps the system be more optimal and more cost effective, but it is. probably least. valuable in exactly the hours that this inquiry is about. Because the reason is correlation. A event does not stop at the channel. It may sit over north west Europe and therefore apply pressure on all neighbouring systems at the same time. There's one exception here, which is probably Norway, like the interesting exception, because Norwegian hydro is stored rather than weather dependent.
Therefore it is far less correlated with our wind. However, it is also not. unlimited and. increasingly we. We think that it is subject like. Exports from Norway to the UK are subject to Norwegian politics and water level, and Norway has become a lot more cautious about exporting it to like high European prices. The reason being that Norway is already a highly electrified country and they don't want to risk a sort of like high price.
contagion to Norway during this like .
Therefore it is far less correlated with our wind. However, it is also not. unlimited and. increasingly we. We think that it is subject like. Exports from Norway to the UK are subject to Norwegian politics and water level, and Norway has become a lot more cautious about exporting it to like high European prices. The reason being that Norway is already a highly electrified country and they don't want to risk a sort of like high price.
contagion to Norway during this like .
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Speaker 8
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Speaker 8
Cause other opportunities, but issues as well. I mean, for most of the time it is very helpful because again, it helps like go, like I'm mentioning, there is some correlation and there is a risk that the Dunkirk floater goes way beyond just the British Isles. However, in in many days also there is a level of correlation. And also, as my colleague mentioned, all systems are different. So they react in ever so slightly different ways. And so it makes sense sometimes when there are surplus in in Great Britain to export them to potentially Norway, for them to refill their reservoir or to Germany or to France and vice versa, because it helps essentially optimize all power systems.
However, if the discussion is around. reliability and those two events.
However, if the discussion is around. reliability and those two events.
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Lord Krebs
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Lord Krebs
Present at all of the critical hours. Mr.. Yeah. So, I mean, I agree with all of that. Maybe only a couple of points to add. So in the kind of critical peak demand hours, one of the valuable things about interconnectors is peaks can occur in different times in different markets. So it does mean that there is still some capacity and reliability benefit, even if there is a broader, flatter event on the kind of broader point around. imported energy as a whole. I mean, I think with increasing the availability of gas during. prolonged very high demand.
periods is something that the that is under scrutiny. And so the government has got a consultation out at the moment on on thinking about gas import.
periods is something that the that is under scrutiny. And so the government has got a consultation out at the moment on on thinking about gas import.
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Lord Krebs
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Lord Krebs
But it it is very much around the ability of the system to provide the flow rate of the gas, including the imports coming through, rather than. necessarily the amount of stored energy that we have access to. I think one of the big changes with liquefied natural gas expansion in the sources of that is that you can have boats coming in every day, you can have quite a high volume of energy being supplied, but it's around the ability to flow that to maintain the peak flow to all of the through all the system that's needed. But that is actually a diverse, you know, although that might be seen as import dependence and being negative from a security perspective, it does actually provide that.
diversification where, you know, a flatter event here is very unlikely to be correlated with with events in other parts of the world, which are going to slow down or interrupt the rate of of arrival of LNG.
diversification where, you know, a flatter event here is very unlikely to be correlated with with events in other parts of the world, which are going to slow down or interrupt the rate of of arrival of LNG.
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Speaker 8
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Speaker 8
And maybe there is a wider point to be made, because we were talking earlier about low carbon firm capacity and how to. decarbonize that kind of like last remaining percentage of the system that helps like tackle, for instance, we do not necessarily need to assume that everything has to be solved domestically. That's, I think, a fair point. That's why we discussed.
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Lord Rooker
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Lord Rooker
Because they're going to be in a different situation to what they are now. But that's not my question. It's just a comment in a way. But it does. It does. concern people because of the way things are changing in the in the Atlantic. But on the issue, the current market. mechanisms do not reward the low carbon assets that are only needed.
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Lord Krebs
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Lord Krebs
Is what I'm asking about there. I'm happy to start. So. Well, first of all, on the comment around Norway, I won't really respond in detail, but I think the important point is we probably are not factoring in sufficiently to security supply assessments. The, you know, the risk of dramatic changes to weather patterns resulting from events that are still considered unlikely to happen in the next 30 years, but not vanishingly unlikely. So I think there is a broad broader point , which is around that kind of the risk of a, you know, of major changes in weather patterns.
It's probably not being being. considered today. On the point about market mechanisms. I mean, I think the, the the blunt answer is there. No, there probably not appropriate today, but that is not you know, there is a lot of work. undergoing that is widely recognized. And there are the government, government and Nyiso and Ofgem have been looking at changes that are needed. And one first example is the cap and floor scheme for long duration energy storage, where the phase one is obviously, you know, in progress at the moment. And there are, you know, there have been proposals around changes to the capacity market scheme and changes to the CFD scheme and changes to the way the markets operate as part of the Rima, the review of electricity market arrangements process that that has ran for about three years, which concluded last year.
And I think the broader point on market arrangements, though, is there is this real. proliferation of individual. policies to tackle.
It's probably not being being. considered today. On the point about market mechanisms. I mean, I think the, the the blunt answer is there. No, there probably not appropriate today, but that is not you know, there is a lot of work. undergoing that is widely recognized. And there are the government, government and Nyiso and Ofgem have been looking at changes that are needed. And one first example is the cap and floor scheme for long duration energy storage, where the phase one is obviously, you know, in progress at the moment. And there are, you know, there have been proposals around changes to the capacity market scheme and changes to the CFD scheme and changes to the way the markets operate as part of the Rima, the review of electricity market arrangements process that that has ran for about three years, which concluded last year.
And I think the broader point on market arrangements, though, is there is this real. proliferation of individual. policies to tackle.
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Lord Krebs
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Lord Krebs
Issues with the way the market, with what is with the way investment signals and dispatch signals work in the market, but they are generally not joined up and. frequently send conflicting signals. And I think it was a point made by one of the speakers in the previous session around the CFD scheme, not. necessarily factoring in the the. implications for system system reliability, which then has to be picked up through the capacity market scheme. But I think it is it is a broader point that these schemes run in isolation, and they optimize for often a single metric.
So strike price in the CFD scheme capacity market clearing price, which is in the capacity market, which is a, a metric of, well, it's an annual availability payment on, on a derated.
So strike price in the CFD scheme capacity market clearing price, which is in the capacity market, which is a, a metric of, well, it's an annual availability payment on, on a derated.
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Lord Krebs
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Lord Krebs
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Lord Krebs
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Lord Krebs
For investment, for stability and for carbon. So my, my own view is we there are there are important changes that are being considered. I think, I think some of the ones that were not taken forward under Rima are probably going to have to be looked at again by the government. But my my broader concern is that these mechanisms do not talk to each other sufficiently at the moment. And then. Sorry. One other point to mention, which I think is really important . There is the strategic Spatial energy plan being developed by Nyiso, which is an attempt to look across the whole energy system and provide a view on the.
overall best mixture of different assets, where they should be, when they should come online in order to, to actually deliver that, that kind of lowest cost system in whilst meeting the government's climate targets. I think that's a really valuable piece of work. The question is going to be, are the mechanisms in place for the government to actually implement the. recommendations of that or implement that plan?
overall best mixture of different assets, where they should be, when they should come online in order to, to actually deliver that, that kind of lowest cost system in whilst meeting the government's climate targets. I think that's a really valuable piece of work. The question is going to be, are the mechanisms in place for the government to actually implement the. recommendations of that or implement that plan?
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Lord Krebs
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Lord Krebs
Probably. dangerous if it continues. Is that yes, yes. I mean, I wouldn't say I think that there is a lot of awareness of the issues. And so there are bespoke interventions to try and address those issues. So I think from a danger perspective, I think the issue of security supply is very well recognised and and understood. So I think the risk is primarily around cost and where the mechanisms are not delivering the, the, you know, they're not picking the appropriate, the most cost effective mix of.
technologies and sending the .
technologies and sending the .
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Speaker 8
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Speaker 8
For how those should be. operated across the system. And maybe to, to add to that, because our original assessment earlier was that the probably the most cost. effective and realistic also in terms of timing in the next probably 20, 25 years to tackle the event, is to maintain a gas fleet on the system, potentially also add some pictures. Again, it's a fleet of assets that would run very little. So and the the timing here is actually quite important because the Ccgt fleet, for instance, at the moment in the in GB is like. 29GW and the bulk of it is set to retire in between the late.
2030s and early 2040s. And so I think it is important to ensure that there is a mechanism to maintain that fleet online, because I remember that in a previous panel, not today, I think it was earlier in the month. Someone did mention like all the cost of refurbishment versus new build versus some of the new build of like some of the low carbon firm capacities that we've been discussing in this committee, maintaining that fleet on the system is by far the most cost efficient thing we can do. And at the moment, it does not need, I think, a dramatic rethink of the system.
We have a perfectly fine instrument, which is a capacity market which does the job in many respects. It may need to be adjusted to some extent to ensure that it remains fit for purpose, especially for that specific purpose in the next ten years. Also, something that would potentially be helpful for this challenge is a little bit on policy clarity around the role of gas. capacity in the system beyond.
2030s and early 2040s. And so I think it is important to ensure that there is a mechanism to maintain that fleet online, because I remember that in a previous panel, not today, I think it was earlier in the month. Someone did mention like all the cost of refurbishment versus new build versus some of the new build of like some of the low carbon firm capacities that we've been discussing in this committee, maintaining that fleet on the system is by far the most cost efficient thing we can do. And at the moment, it does not need, I think, a dramatic rethink of the system.
We have a perfectly fine instrument, which is a capacity market which does the job in many respects. It may need to be adjusted to some extent to ensure that it remains fit for purpose, especially for that specific purpose in the next ten years. Also, something that would potentially be helpful for this challenge is a little bit on policy clarity around the role of gas. capacity in the system beyond.
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Lord Krebs
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Lord Krebs
I'm happy to. Would you like to the committee? Yeah. So I mean, they are eligible to participate in the capacity market already. I think the the issue is that they are often not, well, technologies that are not receiving a separate form of support, such as a CFD or legacy renewables obligation, are eligible to participate in the capacity market. The issue is they are often not. competitive with with unabated thermal technologies. particularly peaking plants, which are relatively low cost to build. And the capacity market pays a capacity payment. My view is there needs to be quite careful about the idea of creating a separate capacity market for low carbon technology.
I think there's a risk that that leads to much higher system costs. It's another separate. mechanism to, you know, which goes to my point earlier around these mechanisms not being joined up. I think if they there are potentially some issues with how the De-rating factors are set in the capacity market or the the.
I think there's a risk that that leads to much higher system costs. It's another separate. mechanism to, you know, which goes to my point earlier around these mechanisms not being joined up. I think if they there are potentially some issues with how the De-rating factors are set in the capacity market or the the.
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Speaker 8
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Speaker 8
Low carbon technologies. I agree, I think like creating more markets creates more distortions in the market and. suboptimal behaviour dispatch and also potentially sometimes like investment decisions. So keeping the capacity market open to like technology agnostic seems to be like the right way forward. It can be adjusted. I mean, as I mentioned, like it might be, it might require some probably more like minor adjustment to remain fit for purpose in the 2030s.
But that being said,
But that being said,
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Speaker 8
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Speaker 8
Flatter that be viable and effectively, that's already the case for like long duration energy storage is quite has a very high de-rating factor in the capacity market that shows that it is considered quite heavily like for stress events, but it also cycles along the year. I mean, it's like batteries, for instance, like long duration batteries with like. 6 to 8 hours would be expected to essentially help optimise the system day in and day out and ensure like lower system costs and also. contribute a lot to, you know, a number of like ancillary services, etc.. So there's a lot of value for the system beyond just responding to those stress events.
However, there are also, at least at the moment, some. limitations that we discussed a little bit in some of the previous panels around long duration storage with respect to Duncan floater events, because if you have an event that is 3 to 4 days long and an asset that can only store energy for ten, 12 hours, obviously they're .
However, there are also, at least at the moment, some. limitations that we discussed a little bit in some of the previous panels around long duration storage with respect to Duncan floater events, because if you have an event that is 3 to 4 days long and an asset that can only store energy for ten, 12 hours, obviously they're .
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Lord Krebs
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Lord Krebs
You know, so can it, you know, can it and should it operate in the market, you know, in times outside of extreme events, I think, yeah, first of all, it, it often wouldn't if it's if it's doing a very costly fuel, it often will not respond unless prices are very high. So that, you know, from a commercial perspective, it could be open to doing that. But it, it probably it very long, ultra long duration, sorry, it's going to choose when to choose very .
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Baroness Sheehan
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Baroness Sheehan
What periods to operate in. As I understand it, these salt caverns that the UK is blessed with are. numerous and can store vast volumes. And we have at the moment , we're paying wind power. generation to be turned off. Every time. Instead of doing that, if we can use it to. produce to either. compressed air, to compress air, or to produce.
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Lord Krebs
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Lord Krebs
Generation is needed and the cost is coming from the gas. Most of the costs are that are coming from the gas. And the most cost effective solution today is to reinforce the transmission network. So you don't have that grid related curtailment, which is what the plan is to do. So there's a bit of a difference between grid. constraints and economic curtailment, which is what the term for when there is just more renewable energy. generation than there is demand in the country at that point in time. So nothing to do with grid constraints. That's where there is genuinely kind of.
surplus wind power, where .
surplus wind power, where .
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Lord Krebs
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Lord Krebs
A cost effective solution. But again, location is important. I mean. co-location can be important, but if the network is there, then co-location is not necessarily the right answer. The issue is more around how frequently you get these events of oversupply. And is it cost effective to build some high CapEx. infrastructure that is to to capture and store that energy, which is only used very rarely. So really for ultra long duration storage, the the critical thing is how the cost of the CapEx of the infrastructure to store the energy, if that is, is in salt caverns are very cheap from a stored storage cost per kilowatt hour, but the cost of building the infrastructure to actually, you know, convert the surplus electricity into hydrogen if it's only being used very rarely or relatively rarely, because these periods .
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Speaker 8
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Speaker 8
Oversupply are rare, that makes it extremely expensive. So just on just part of oversupply. Quite likely a lot of in when we think of them in energy volume in towers, a lot of the volumes will be spread across like a lot of small, frequent events for which you don't need necessarily ultra long duration storage, like the current battery fleet is well designed or I mean, you can add some batteries to that, but like a. 4 to 6 hour duration is probably sufficient to capture a lot of that oversupply when it arises. And there may be an .
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Speaker 8
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Speaker 8
Is is that high? It I don't think that that's what I said. I do think it is high in the sense that it will definitely occur. And the more wind we have in the system, the the more important in terms of, you know, depth of the event and, and gigawatt hour and terawatt hours involved, that that will be, I think we can say that per year, there will probably be like two quite big events that are, you know, like long duration, like in excess of. 24 hours when renewable generation will be under like 20% of its like long term annual output.
So that's two events a year. So that's actually quite important. I think it's more like, how do we think we can address that? And also how timely that solution can be. Because a lot of the solution. explored have limitations, but also both in terms of can they cope with such a long duration event, but also can they be delivered on time? When we have a system that is going to be very wind intensive? So as soon as 20, 30, 20, 35, we'll have a lot more wind in the system that we currently have. A lot of that wind has been procured.
So that's two events a year. So that's actually quite important. I think it's more like, how do we think we can address that? And also how timely that solution can be. Because a lot of the solution. explored have limitations, but also both in terms of can they cope with such a long duration event, but also can they be delivered on time? When we have a system that is going to be very wind intensive? So as soon as 20, 30, 20, 35, we'll have a lot more wind in the system that we currently have. A lot of that wind has been procured.
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Baroness Sheehan
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Baroness Sheehan
Will be delivered. So I think it's about planning for that system. It is, and it is planning for something that's going to help us fulfill the clean, Clean Power action plan in the time frame that the government has set out. So we're really what we're trying to do here is to see how far the government is along in its thinking of how it's going to address these issues, and that is really the point in the inquiry. And it is about low. carbon energy that we're looking to look at the. technologies that are going to fill that gap.
I'm going to .
I'm going to .
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Baroness Rafferty
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Baroness Rafferty
Come to a final question to Baroness Rafferty. Thank you very much, chair, and also thank you to you for your very helpful contributions. You've really already outlined in part, some of the, I think, responses to my question, which is about some of the short and medium term key policy. gaps that might. exist that really need to be tackled if we are to address. Improving up. resilience to Dunkel.
I think that's the first time I've pronounced that possibly correct, possibly incorrect. It depends. If it has an.
I think that's the first time I've pronounced that possibly correct, possibly incorrect. It depends. If it has an.
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Lord Krebs
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Lord Krebs
Focus on some of these gaps? Unconscious? That one. I didn't respond to Lord Rooker's question about strategic reserve, and maybe that is a point worth bringing up. I think there is a some countries have strategic reserves, some don't. And there's a legitimate debate over what the most. You know, what is effective and what isn't. I think the care that needs to be taken with the strategic strategic reserve sounds like a very sensible thing to do. You know, reserves are a, you know, often, often sensible measures to take for protection against, you know, rare events. The care that you need to have is that the reserve doesn't negatively impact investment in assets that are not in the reserve, because that can then make the problem worse.
So I would just.
So I would just.
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Lord Krebs
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Lord Krebs
You know, where assets are unlikely to be viable in the market and wouldn't be built, but that would then need to be pretty strongly ring fenced from the rest of the market, because if that reserve is also playing in the market, it will be cannibalizing the revenues of other assets that are built in the market. So you will get less of those. So you will need more reserve, and you've got that kind of reinforcing process. And also the risk is that if it is playing in the market, it may not. It may have been depleted for the point when you need when there is that kind of 1 in 30 year.
extreme like prolonged conflict event. And so, yeah, just there may be a case for it. I don't think there's a case right now, but I think it would need to be considered very .
extreme like prolonged conflict event. And so, yeah, just there may be a case for it. I don't think there's a case right now, but I think it would need to be considered very .
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Speaker 8
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Speaker 8
Negatively impact the rest of the market. Thank you. Maybe three points. I don't know if they're necessarily like you, but to. summarize what we've said to date, the first thing is probably it would be very useful to commission a broader resilience assessment. And I think that that goes to to your point, chair, that the the system is changing. It's going to be more renewable heavy, therefore more climate sensitive. We're also. introducing at least like that's part of this discussion today, a number of technologies that are yet partly unproven in terms of like historical performance. And also the climate itself is changing.
So the occurrence and the severity of event could change in the future. And as was mentioned in this panel and the previous one, there are also gaps in sort of policy design. For instance, like the allocation rounds are done first and then we think of storage next. It's not necessarily joined up. So it's probably something that the CEP could consider in a changing climate and in a changing system. Have that resilience assessment should be undertaken. The second point is to. clarify the long term role of unabated gas and do it soon. If a small amount of unabated gas is permitted in the long run, the problem becomes a lot more like far more manageable and considerably cheaper to manage as well.
If it is not, the cost can escalate quite steeply. We mentioned like about. £80 billion over the 2040s in additional system costs to remove. £60 million of carbon, which is broadly, by the way. 1.4% of the total emissions allowed in the upcoming carbon budgets to 2050. So we're talking about a very modest amount of emissions. And I think that either answer is workable. It's more the absence of an answer that is doing damage, because.
So the occurrence and the severity of event could change in the future. And as was mentioned in this panel and the previous one, there are also gaps in sort of policy design. For instance, like the allocation rounds are done first and then we think of storage next. It's not necessarily joined up. So it's probably something that the CEP could consider in a changing climate and in a changing system. Have that resilience assessment should be undertaken. The second point is to. clarify the long term role of unabated gas and do it soon. If a small amount of unabated gas is permitted in the long run, the problem becomes a lot more like far more manageable and considerably cheaper to manage as well.
If it is not, the cost can escalate quite steeply. We mentioned like about. £80 billion over the 2040s in additional system costs to remove. £60 million of carbon, which is broadly, by the way. 1.4% of the total emissions allowed in the upcoming carbon budgets to 2050. So we're talking about a very modest amount of emissions. And I think that either answer is workable. It's more the absence of an answer that is doing damage, because.
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Speaker 8
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Speaker 8
When they're planning closure will always assume the worst. And so and if we lose the fleet, it will be quite difficult to get it back on its feet because it takes years to order turbine, etc.. And the third point is to be willing to long be to be willing to look beyond the power sector and possibly even beyond our borders for the last few turns. A cheaper power system that is nearly clean will cut much more. emissions than an expensive one that is perfectly clean. The reason is that people only switch to electricity when electricity is cheaper option.
And so if we really want to.
And so if we really want to.
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Lord Krebs
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Lord Krebs
The system. Sorry, sorry. Just just I mean, I completely agree. The other point I would make is from an economist's perspective, carbon prices are a very efficient tool, but they are not applied universally across the economy. So the risk of raising the power, the carbon price and applying that to power. But when that is not applied, for example, to gas used in heating would again, it would.
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Lord Krebs
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Lord Krebs
And probably lead to increased emissions overall. And then there's obviously the point around international competitiveness as well. You know, we there is very little it would probably be harmful for the UK to unilaterally raise our carbon prices, because that will simply cause offshoring of emissions done in collaboration with, you know, done in concert with the EU and with a strong carbon border adjustment mechanism that .
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Baroness Rafferty
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Baroness Rafferty
Involved in these discussions? I mean, the energy sector is one thing, and I think you both mentioned the lack of joined up policy, but is there a very close. collaboration in. consideration of prediction of these events, you know. understanding broader kind of. patterns ? And what's how do. meteorologists input into all .
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Speaker 2
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Speaker 2
And other issues? Would it not? I think essentially like as part of that broader discussion on cost benefit and that again, at the risk of repeating myself, there is already a lot that is being discussed, you know, in, in the media, in the in the public domain, around the cost of electricity in this country, which is harming the rate of.
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Speaker 2
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Speaker 2
Which I strongly believe is the way forward to have like a higher growth or a higher like pace of electrification in this country. And so there's, it's quite important to reflect on what actually can make the system cheaper. The system will get decarbonised. Essentially, whatever we're doing, we are. procuring huge amounts of renewable that will displace gas and other fossil fuels. We've already done a lot in the power system. Also, if we reflect over the past 20 years, we've removed all coal from the system, and now we're like introducing more and more and more renewables.
I think we just need to make sure that the system we're designing is fit for purpose, and supports an economy that will get. increasingly electrified, especially as some of the questions pointed to the fact that. domestic oil and gas supplies are dwindling. Whatever we do. So in the near.
I think we just need to make sure that the system we're designing is fit for purpose, and supports an economy that will get. increasingly electrified, especially as some of the questions pointed to the fact that. domestic oil and gas supplies are dwindling. Whatever we do. So in the near.
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Baroness Sheehan
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Baroness Sheehan
Be more electrifying than less. We have a plethora of. technologies that we're trying to. understand in terms of what they can. deliver and how much they will cost. How do we compare them? You must do this on a daily basis. Can you help us? Obviously not. Now we're out of time. But could you write to the.
committee so we can understand a little bit about how these.
committee so we can understand a little bit about how these.
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Speaker 2
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Speaker 2
Yeah, I'm so sorry. The numbers I communicated earlier around like the difference in between two scenarios, the. £80 billion of difference in system costs were based on like such analysis, where we looked at one system where essentially we're building more of that kind of like low carbon firm. capacity and one where we build a lot less essentially, where anything that's not been committed so far is not necessarily built. And that gap comes from there.
So we're not analysing like one single technology. But again, it's a whole system approach because I agree that is the .
So we're not analysing like one single technology. But again, it's a whole system approach because I agree that is the .
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