NETWORKS FOR NET ZERO - Delivering a sustainable energy system for all
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NETWORKS FOR NET ZERO Delivering a sustainable energy system for all
CONTENTS
ACKNOWLEDGEMENTS 1. Executive Summary 3 7. Network Cost Impact 83
1.1 NIE Networks – An Overview 4 7.1 Distribution Costs 85
We wish to show our appreciation to those who assisted and supported
the development of this publication. 1.2 Northern Ireland’s Climate Change 4 7.2 Transmission Costs 86
Commitment
We wish to offer our thanks to Element Energy Consultants who 7.3 Impact of Investment on Price 86
developed a set of scenarios for the uptake of LCTs informing our 1.3 Customer at the Centre 5
pathways.
1.4 Networks for Net Zero 6
8. Sustainability and NIE Networks 89
A special thanks to Dr Patrick Keatley, Centre of Sustainable Technologies
1.5 Sectoral Challenges 6
at Ulster University and the Ulster University’s SPIRE 2 Project, for 8.1 What Is Sustainability 91
facilitating our ongoing joint research, including the RULET project 1.6 Delivering the Future 7
8.2 Our Sustainability Action Plan 2021-2024 92
highlighted in Chapter 3. We also acknowledge the Northern Ireland
1.7 Evolution of NIE Networks Role 8
Housing Executive (NIHE) as a key collaborator on the project and in 8.3 Our Commitment 95
facilitating the trail sites. 1.8 In Summary 8
We would also like to extend our gratitude to Queen’s University Belfast,
9. Delivering the Future 97
Professor John Morrow, Dr Robert Best, Arijit Bagchi and Ahmed A.Raouf
2. Introduction 11
Mohamed of School of Electronics, Electrical Engineering and Computer 9.1 Creating Economic Opportunity 101
Science, for our collaborative investigation into battery energy storage 2.1 Climate Change Challenge 13
9.2 Supporting the Customer 102
systems. In addition, thanks go to Dr Teresa McGrath of QUB for her work
2.2 The Challenge for Northern Ireland 16
and insights into decarbonisation of heat and transport. 9.3 Integrated Energy System 102
2.3 NIE Networks and Northern Ireland 23 with Energy Efficiency First
We also thank University College Cork and specifically Dr Paul Deane for
CONTENTS - 1
Energy Strategy
his assistance and insights to the Climate change challenges. 9.4 Commitment to Net Zero 103
2.4 Looking Forward 24
Thank you also to SONI Ltd, for our collaboration within the Joint Working 9.5 Power 103
Group, results of which have featured within this document. Finally, we
wish to show our appreciation to ESB, in particular Clive Bowers, for his 9.6 Heat 105
research and insights into an integrated energy system. 3. The Customer 27
9.7 Transport 105
3.1 What It Means for Customers 29
9.8 Opportunity for Jobs and Skills 106
3.2 What Customers of the Future Might
9.9 Challenges for A Green Recovery 107
Look Like 30
9.10 Conclusions 110
3.3 Future Technologies, Customer Choices and 33
Behaviours
10. Feedback 113
4. The Journey to Decarbonisation 37 Your Opinion 114
4.1 Pathways to Decarbonisation 39
4.2 Energy Efficiency First 45 11. Appendix 117
4.3 Pathways 47 11.1 RULET (Rural-Led Energy Transition) 118
- Ulster University Case Study
4.4 Modelling Findings 55
11.2 Sustainability Roadmap 119
11.3 FLEX 120
5. An Integrated Energy System 59
11.4 Solving Congestion Management Using 121
5.1 Role of Electrification in Northern Ireland’s 61
Battery Energy Storage Systems
Decarbonisation Strategy
– QUB Case Study
5.2 The Role of Non-Direct Electrification 64
5.3 The Benefits of Energy Strategy 66 12. Glossary 127
6. Embracing the Future 68 References 131
6.1 The Changing Network 71
6.2 DSO Transition 72
6.3 Customer Benefits 81
1. EXECUTIVE SUMMARY
FOREWORD
The twin challenges of re-building our economy after We set out how we can facilitate increased renewables
the Covid-19 pandemic, and transforming our society to on the network, how we can enable an increasing uptake
achieve Net Zero carbon by 2050 provide the context of low carbon technologies such as electric vehicles,
for a unique period of change and opportunity in how solar photovoltaics, electric heat pumps, and how we will
we provide and consume energy in Northern Ireland. support new technologies such as hydrogen electrolysis
The Department for the Economy is currently leading and battery storage, as well as the development and
the development of a new Energy Strategy for Northern operation of new services and markets. We further set
Ireland and recently published a Consultation which out how the role of NIE Networks as an organisation will
seeks views on a comprehensive range of proposals change as a result - a journey to being a ‘Distribution
under consideration to achieve a Vision of ‘Net Zero System Operator’ that we have already commenced.
Carbon and Affordable Energy’. In tandem with that,
The specific pathway for Net Zero is complex and
the Northern Ireland Assembly and the Executive are
uncertain with many potential scenarios that may
2 - FOR EWOR D
progressing consideration of Northern Ireland’s first ever
develop. What is certain is that it needs a coordinated
Climate Change Act.
approach from the Northern Ireland Executive, the Utility
The electricity network plays a critical role in making sure Regulator, energy industry participants, local councils,
our economy and society has access to safe, secure businesses, academia and consumer bodies to develop
and reliable energy in our homes, our farms, our schools and deliver the most effective policies and solutions
and hospitals, and our businesses and other institutions. which minimise costs to customers. It is also clear that
The electricity network has an equally important role to we need to move forward with greater resolve and make
play in delivering the transition to Net Zero carbon by progress with existing proven technologies in those areas
enabling more energy from renewable sources accessing where this is most appropriate and commence projects
the network and by enabling that energy being used by on the ground which can also stimulate the economy in a
customers to replace fossil fuels in transport and heating. post-pandemic ‘Green Recovery’.
This opportunity to replace our dependency on imported
NIE Networks has a crucial role to play but we do not
fossil fuels with indigenous renewable energy supporting
have all the answers. We are seeking your views and
investment and jobs in Northern Ireland, is key to both
inputs to help inform how we progress on this journey
economic recovery and to longer term climate action.
and your feedback will assist us in our business planning
It is within that context that I am pleased to present process for our next Regulatory Price Control period
Northern Ireland Electricity Networks’ strategy which commences in 2024. So please engage and
report ‘Networks for Net Zero’. This report sets out respond to the feedback section at the conclusion of the
our considered views on the options and pathways Report.
for decarbonisation in Northern Ireland and how
In presenting this strategy report, I hope that you find it
electrification can play a significant role in a flexible
informative and that it will assist and contribute to the
and integrated decarbonised energy system. It has
wider debate on energy stimulated by the Department for
customers at the core and assesses how customers will
the Economy’s Energy Strategy Consultation.
have increased opportunities for managing their energy
demands more efficiently through adoption of new
technologies and will have the ability to engage with new
energy markets.
Paul Stapleton
The report presents independent modelling that has
Managing Director, NIE Networks
been undertaken to examine the potential pathways to
decarbonisation and presents inputs from academia who
are engaged with studies and trials into many aspects
of the low carbon transition. I would like to acknowledge
the significant contributions from SONI Ltd, Queens
University Belfast, Ulster University, University College
Cork and Element Energy.
1.1 N
IE NETWORKS 1.2 N
ORTHERN IRELAND’S smart metering will empower customers to make more
efficient decisions on energy usage. Northern Ireland
use of hydrogen in the existing gas infrastructure is more
uncertain and requires to be fully appraised. Until these
– AN OVERVIEW CLIMATE CHANGE requires to catch up with other developed countries in detailed assessments are complete, further expansion of
NIE Networks is owned by ESB Group but operates COMMITMENT rolling out smart metering, as outlined in Chapter 9. the gas grid should be viewed with caution and should
be subject to detailed review as to whether it is in the
as an independent organisation with its own Board and Secondly, direct electrification must be the next go-to
The 2015 Paris Agreement2 has an objective of “holding best interests of the Northern Ireland customer in the
management teams and separate regulation via the strategy. With electricity consumption in Northern Ireland
the increase in the global average temperature to well long term.
Northern Ireland Authority for Utility Regulation (or the already 49.2% from renewable sources and a likely
below 2 °C above pre-industrial levels and pursuing
Utility Regulator, as it is more commonly known). target of 70% for 2030, electrification is on a well-tested,
efforts to limit the temperature increase to 1.5 °C above
proven technology pathway to fully decarbonising prior
• We own the electricity transmission and pre-industrial levels”. In 2019, the European Green Deal3
to 2050. There are unique opportunities for Northern
distribution networks in Northern Ireland, and set out ambitious reduction levels for the European
operate the distribution system, transporting Union (EU) as a whole and aims to deliver Net Zero
Ireland to advance this strategy. The lesser reach of
the gas network in Northern Ireland compared to Great
1.3 C
USTOMER
electricity to 895,000 customers; greenhouse gas4 (GHG) emissions by 2050. In June
2019, the UK government announced a target of Net
Britain (GB) means electrification of heat should be a AT THE CENTRE
• We invest over £100 million annually in primary solution for well insulated new buildings and
Zero GHG emissions by 20505 and in December 2020 The climate change challenge will drive decarbonisation
maintaining and upgrading the electricity off gas grid customers. A strategy can be developed
the Committee on Climate Change (CCC) presented its of society and the impacts of this will be profound
transmission and distribution infrastructure in where electrifying heat in parallel with a rollout of an
6th Carbon Budget on how the UK can deliver on this and far reaching. The changes that are underway are
Northern Ireland to ensure it remains in a safe and energy efficiency programme can be commenced as a
commitment. already impacting on how customers are engaging with
reliable condition; matter of priority to make early progress and stimulate
an emerging heat pump industry delivered with skill sets the electricity network with the past decade seeing an
4 - EXECUTIVE S U M MARY
EXECUTIVE S U M MARY - 5
Within the 6th Carbon Budget, the CCC has specifically
• We contribute over £150 million annually to the that exist within the region. In terms of the transport unprecedented uptake in customers installing renewable
outlined how Northern Ireland can meet its obligations
Northern Ireland local economy; sector, with developments in battery technology and generation, a significant uptake of roof top solar photo-
as part of the UK effort and has recommended Northern
Ireland reach an 82% reduction in GHG emissions by considering the geographic size of Northern Ireland, voltaic (PV) and the commencement of a switch to
• We directly employ over 1,200 highly skilled
2050 compared to 1990 levels excluding engineered range anxiety is rapidly becoming less of a concern when electric vehicles (EVs).
individuals and sustain hundreds of further jobs
through our supply chain; greenhouse gas removals. In addition, Northern Ireland making the decision to switch away from petrol or diesel Customers now have the opportunity to engage with
would be targeted to achieve Net Zero carbon dioxide vehicles. There has however, been limited progress in LCTs and emerging energy markets to more efficiently
• We have delivered approximately 30% real price (CO2) emissions by 2050. developing the necessary electric vehicle (EV) charging manage their energy needs. This will further evolve over
reduction in our network costs since privatisation; infrastructure and the remaining barriers to market
Northern Ireland’s Executive has reinforced its climate time and NIE Networks recognises that the needs of
and entrants should be removed as a matter of priority.
change commitment in its ‘New Decade, New Approach’ customers are wide ranging and different customers will
• We maintain a consistently strong financial agreement stating; “the Executive will introduce Thirdly, utilisation of other low carbon technologies seek to engage with the network and markets in different
performance managing an asset base of £1.6bn legislation and targets for reducing carbon emissions such as hydrogen, carbon capture and storage (CCS) ways. Some will become active participants in the new
in line with the Paris Climate Change Accord”. The and biogas should be progressed where technically and world and others will remain passive relying on the
Our role in the energy transition is to enable and facilitate
Department for Agriculture, Environment and Rural economically viable. Some of these technologies are network for meeting their electricity demands. Customers
the decarbonisation of energy production through
Affairs (DAERA) is developing and consulting on a less advanced in terms of commercial development and must be encouraged to engage with the energy markets
accommodation of renewable generation, facilitate the
Climate Change bill for Northern Ireland. NIE Networks’ less proven from a technical and economic business through advice and information on options available to
uptake of low carbon technologies (LCTs) and through
considered opinion is that the bill should set interim perspective. There is a wide acceptance that there them and empowered to make the right decisions on how
digitalisation develop and operate the network in an
emission reduction targets and a long-term target for are specific sectoral uses for such low / zero carbon best to optimise their energy requirements. NIE Networks
open and more efficient manner enabling customers to
Northern Ireland by 2050, where the long-term target alternatives, for example the use of hydrogen in industrial supports the formation of an independent advisory
participate in new emerging markets. We don’t produce
represents an equitable contribution to achieving UK- processes, heavy transport and maritime applications, body to which we can contribute, to ensure relevant
or sell electricity, but are required to provide a connection
wide Net Zero by 2050 as recommended in the CCC’s however a cautious approach should be adopted to fully information is made available including how customers
for all sources of electricity, whether traditional or
6th Carbon Budget. understand the full costs and benefits of production and can avail of emerging flexibility services.
renewable generation and demand customers where
requested. We are required to design and provide a deployment. Hydrogen production and end use cases It is vital that the energy transition is fair in terms
NIE Networks advocates strongly for a strategy for should be fully explored for Northern Ireland however we
network fit for purpose to enable this to happen and to Northern Ireland which aligns with the UK and European of sharing of benefits and costs and that the most
achieve a zero-carbon society. In doing so we ensure that should recognise that in GB, the 2020s are expected vulnerable in society (perhaps less able to actively
transitions. The first pillar of this must be energy to be a significant period of trial to fully understand the
we continue to provide a safe and reliable network, whilst efficiency as the most valuable unit of energy is the one participate) benefit and are not unduly burdened with
facilitating the delivery of this zero-carbon ambition in the costs, risks and benefits from a production and end use costs. NIE Networks is committed to ensuring information
not used. The challenge on energy efficiency for Northern perspective. Hydrogen is not yet a market-ready solution
most cost-effective way. Ireland cannot be underestimated with 90% of our homes is available to the public, that network investments
of scale, but it has the potential to play a significant role are incurred as efficiently as possible and tariffing
We welcome the commitments in the ‘New Decade, being Energy Performance Certificate (EPC) Grade C in decarbonisation in the longer term. Hydrogen should
or less. It is incumbent on policy makers to ensure our arrangements are reviewed to ensure network costs are
New Approach1’ Agreement to develop a strategy to not be perceived as an alternative to, or in competition
homes and premises are as energy efficient as possible charged in a manner that is fair to all customers.
tackle climate change, central to which is a new Northern with, renewable electricity as a low carbon solution.
Ireland energy strategy. In that regard we are also grateful and put the necessary financing mechanisms in place to Rather, both can be inter-dependent elements of an
for the opportunity to proactively engage in and support address and support a comprehensive retrofit programme overall integrated clean energy strategy. In particular the
the Department for the Economy’s (DfE) energy strategy for Northern Ireland that stands the test of time. This will longer-term potential for the production of hydrogen from
process through engagement with other stakeholders not be an insignificant amount of expenditure but it will renewable power, and its storage and use for industrial
in four of the Thematic Working Groups (Power, Heat, have major positive impacts on home comfort and energy processes, transport and indeed power generation may
Transport and Consumer) assessing the options for usage, especially in lower income housing. Coupled with be a significant element of the 2050 Net Zero energy
a new energy strategy and the new Strategic Energy this, better information on energy consumption through system. However, scope for the safe and economic end
Framework for Northern Ireland for 2020-2030.
1.4 N
ETWORKS FOR bill composition, NIE Networks estimate that by 2025
and 2030 the charge to domestic customers relating to
such as grants and low-cost finance. This would be
a one-off investment which will have enduring energy
the economy by unlocking investment in low carbon
infrastructure and fast-tracking decarbonisation of heat
NET ZERO network costs will result in a 1% reduction in the overall efficiency improvements into the future. The adoption of and transport:
cost they pay per unit of electricity consumed. The hybrid heat pumps should also be progressed as they
NIE Networks would concur with the widely adopted 1. Joining up policy and regulation to
cost is dependent predominantly on the degree that off enable a very significant reduction in CO2 emissions from
strategy in the UK, Europe and Ireland that electrification encourage investment
shore wind plays in the generation profile. NIE Networks home heating without the same level of investment in
has a lead role to play in decarbonising key sectors would advocate the development of offshore wind as retrofit being required. NIE Networks considers that the mandate of the
which contribute to our GHG emissions. Central to a solution given the opportunities Northern Ireland has Utility Regulator should be broadened to support
facilitating this transition over the next three decades These measures would also have the effect of stimulating decarbonisation and economic development. This
for deployment of this technology to add to the diversity
are the electricity networks and the role of the network the local supply chain, which will be essential if Northern would provide an opportunity to create a forward-
of generation mix. This would reduce the impact of
owners and operators to ensure the transition can be met Ireland is going to meet its obligations in this sector and looking regulatory framework that supports
accommodating this generation capacity on shore and
both technically and economically at minimal cost to the address the large number of customers who will be off innovation and strategic investment, stimulating
the significant reinforcements to the distribution network
Northern Ireland customer. gas grid or opt not to choose hydrogen (if it proves to new employment opportunities and a more
this would necessitate.
be an economic option and becomes available to them). prosperous economy. NIE Networks additionally
The development of the electricity network needs to take Progressing an electrification strategy immediately can
account of the decarbonisation pathways for generation advocates a review of connection charging
proceed in parallel with trialling alternatives to natural policies and regulations to align Northern Ireland
and demand, much of which is uncertain. To examine this gas.
uncertainty, NIE Networks engaged Element Energy to with other neighbouring regions, making it an
undertake an analysis into a range of possible scenarios 1.5 S
ECTORAL Northern Ireland should adopt the UK date for banning attractive and competitive place to invest. This
review should ensure an appropriate method of
across all sectors which could impact electricity CHALLENGES sales of new internal combustion engines in cars and
6 - EXECUTIVE S U M MARY
EXECUTIVE S U M MARY - 7
production and consumption. On the generation side, vans and address the remaining barriers to the uptake of charging is implemented and that connection
a range of future renewable electricity consumption EVs by creating the right market conditions for electric costs are apportioned appropriately between the
For the power sector, NIE Networks would support the
(RES-E) targets have been modelled (60%, 70% vehicle charger providers. NIE Networks has advocated connectee and socialised costs whilst also taking
Economy Minister’s assessment that the 2030 target
and 80%) together with ranges for uptake of solar PV for the formation of a cross departmental taskforce into consideration customer willingness to pay
for RES-E should be a minimum of 70% building on
and battery storage. On the demand side, ranges of including other stakeholders such as local councils, car and vulnerable customers.
the significant progress achieved in Northern Ireland to
uptake scenarios for transport through assessment of date and exceeding the previous 2020 target of 40% suppliers and EV user groups to determine the most 2. Accelerating investment in renewables
electric vehicle projections and domestic / commercial ahead of schedule (by 2019). In achieving the current appropriate strategy for EV charger deployment between
A new target of minimum 70% renewable
heating for high electrification and conversely high gas level of 49.2%, investment was required to create home, workplace and destination charging locations.
electricity consumption will require a doubling
penetration scenarios were modelled. This work dove- additional capacity over the previously existing headroom Local government should also pursue all available funding
of the current connected renewable capacity.
tailed with the Transmission System Operator’s (SONI) and we are now at a point where the network is at routes from the UK Government to support provision of a
Development of clear funding mechanisms will
‘Tomorrows Energy Scenarios’ to assess potential capacity in many locations. Achieving 70% cannot be local public charging infrastructure.
provide some certainty around market access and
pathways on emissions reductions and impact on delivered with the same incremental approach previously income streams to enable the investments to be
network costs. adopted but will require significant strategic grid economic for developers.
development to accommodate the predicted doubling of
These studies confirmed that with the right policy 3. Bringing forward network infrastructure
renewables required. Delivery of the second North South
decisions, Northern Ireland can achieve its Net Zero
commitments as outlined in the CCC’s 6th Carbon
Interconnector will be a key enabler for the integration of 1.6 DELIVERING investment
Budget. Indeed, the power sector is capable of
additional renewable generation, addressing constraints THE FUTURE If the regulatory mandate permitted building
on the transmission network, improving security of network infrastructure ahead of need, this would
decarbonising ahead of 2050. The electrification of
supply and allowing the grid to operate more effectively The delivery of the emerging targets for Northern Ireland enable advancement of least regret infrastructure
demand and moving away from fossil fuels in generation,
as part of an all-island Single Electricity Market (SEM). will be challenging and will require a collective will and projects. A new fast track approach would be
heating and transport could reduce the demand on
Offshore wind can play a significant role in the generation determination to remove all possible barriers. There is required from the Utility Regulator and planning
primary energy sources by as much as 48% by 2050
mix and any planning barriers to its development now a real sense of urgency to act on areas of least authorities to ensure projects can be delivered
compared to today. This is because of the much greater
should be addressed. Greater system flexibility and in regret and make progress towards the 2030 ambitions. efficiently. Much of this investment will be
energy efficiency of electricity compared with fossil
particular demand side management through flexibility For NIE Networks, it is critical that the network cannot regionally focused and will have a significant
fuels in areas such as transport and heat. It could also
arrangements for the Distribution System Operator be a blocker to the transition but capacity must be positive economic stimulus across all council
increase overall electricity consumption by between 50%
(DSO) and Transmission System Operator (TSO) will available ahead of need. A change of thinking is required areas in Northern Ireland.
and 70% by 2050.
enable greater efficiency of the electricity system to the to make this happen through a fully coordinated joined
The estimated combined distribution and transmission benefit of all customers. 4. Improving the planning process
up approach with collective action from the Northern
direct network costs over historic ‘business as usual’ Ireland Executive and Government Departments, the NIE Networks advocates a consistent and
For the heat and building sectors, energy efficiency fast-tracked planning process implemented for
network costs are assessed in the range of £525m UK Government, Utility Regulator, and all industry
and low carbon heating options are inextricably ‘green development’ projects which prioritises
- £700m by 2030 to achieve a renewable electricity participants.
linked. An early and immediate action is to align our the efficient delivery of low carbon and renewable
target of at least 70%. NIE Networks has performed
Building Regulations for new homes to the Future The Northern Ireland Executive’s Medium-Term Recovery projects with appropriate targets, timeframes and
some high-level modelling to assess the impact of this
Homes Standard in GB thereby ensuring a standard of Strategy published by the DfE in June 2020 recognises accountabilities.
increased investment on the cost of electricity given the
construction which would facilitate the adoption of the the “substantial economic recovery opportunity …
expected increased usage of electricity arising from the
most efficient low carbon heating option i.e. heat pumps. to build a more competitive, inclusive and greener 5. Low carbon transport
electrification of heat and transport, estimated to be circa
Alongside this, a comprehensive programme of building economy”, and highlighted Clean Energy as one of In the immediate term, developing an ultra-rapid
19% by 2030. On average, network costs comprise
retrofits is required for Northern Ireland’s poor housing the potential areas for growth. NIE Networks has charging hub infrastructure across Northern
25% of domestic customers bills, assuming no other
stock, supported with appropriate funding mechanisms identified eight tangible areas of opportunity to support Ireland would have a significant impact in terms
changes in pricing structure and taking this average
of economic stimulus, due to the high upfront The roles and responsibilities for distribution network of clarity. The emerging strategy for Northern Ireland decarbonisation and economic development,
investment costs and promotion of the electric owners / operators across the UK and Europe are requires to address: ensuring a consistent framework to enable
vehicle sector. NIE Networks has offered to kick evolving reflecting the most significant change on the financeable and efficient regulated investment
• Coordination across government departments
start this infrastructure delivery if there is no viable distribution network in decades. NIE Networks will be and promotion of appropriate market
with timely complementary policies against a set
market alternative. required to manage a more complex, active distribution structures to attract capital in unregulated
of targets which align with our contribution to
system which will have more dynamic generation, loading markets.
6. Digitalisation of the Energy System UK’s Net Zero goals by 2050.
demands and flexible distributed energy resources. NIE
NIE Networks advocates for the DfE to update o 82% reduction in GHG by 2050; • Develop the skills and employment base in
Networks role is to act as a neutral facilitator to enable
the business case for implementation of smart Northern Ireland
competitive access to markets and optimal use of o Net Zero CO2 Emissions by 2050;
metering and to initiate a trial of significant energy resources on the network and provide the ability o through STEM education programmes;
scale for smart meters as part of an integrated to maintain and operate the distribution system in the o Net Zero power sector by 2050 with an aim
o support for significant reskilling opportunities.
solution for customers using LCTs. In addition, best possible way for all customers. The DSO pathway to decarbonise earlier;
NIE Networks advocates for further digital we have outlined to 2050 is NIE Networks assessment The next decade will be a time of change and adjustment
o Set a minimum of 70% consumption of
investment in the Northern Ireland electricity of the changes required to both the network and the as low carbon technologies become more commonplace.
electricity from renewable energy by 2030
network and supporting infrastructure to enhance organisation to facilitate this transition. This pathway The way that people consider their energy demands will
and promote a wide range of diverse
network visibility and controllability. Provision of presents a view on a range of enablers, namely network evolve as they move away from fossil fuel dependency
renewable technologies including off shore
data to customers, network operators and the visibility, network controllability, customer and commercial for their heating and transport needs and develop the
wind.
wider market will provide greater empowerment development, market operability and systems and data knowledge to become more energy efficient. There will
and opportunity for more efficient operation of development. The pathway to DSO will deliver whole • Progressing now where possible particularly in be considerable opportunities to more actively engage
8 - EXECUTIVE S U M MARY
EXECUTIVE S U M MARY - 9
the network and more efficient management of system benefits and the success will be measured by the areas with proven technologies. with energy markets and utilise energy assets in a
customer demand. benefits it brings for customers. more efficient manner. Building on the considerable
• Placing the customer at the forefront of the
success to date with renewable generation, Northern
7. Building regulations NIE Networks is committed to playing its part in strategy in providing education, support to
Ireland will continue to increase its overall consumption
Supporting energy efficiency through the facilitating this energy transition on the pathway to a Net educate, enable and empower them to make
from renewable sources as the power sector aims to
modernisation of building regulations is essential Zero future. As custodians of the electricity infrastructure the transition in as seamless and cost-effective
decarbonise ahead of 2050. The network will require to
to align Northern Ireland’s building regulations we will build on our track record of efficient and way possible and provide protections for the
be developed further to ensure adequate capacity for the
with those in GB and the RoI where progress successful delivery to ensure the network is developed in vulnerable and fuel poor against unfair costs or
increasing diverse mix of renewable technologies that will
towards near-zero carbon buildings has been the safest, most efficient and cost reflective way as part lack of access to benefits of the transition.
emerge.
made. of an overarching integrated energy strategy for Northern • Energy efficiency first
Ireland. We will ensure customers are at the centre of our NIE Networks has commenced its journey as a DSO
8. Innovation o promote energy efficiency and demand and considers the pathway outlined in this report will
strategy through engagement for information, education
It is essential that we build on existing innovation and consultation; through enablement ensuring the reduction through customer education and ensure that the transmission and distribution networks
activities in low carbon energy through increased transition is open, transparent and as simple as possible; advice programmes; and NIE Networks as an organisation are best positioned
government investment in areas such as large- and through empowerment to ensure customers are o consolidate the positive behaviours from the to facilitate the changes that will ensue over the next
scale trials of heat pumps, hybrid heating confident to make real and informed choices and realise pandemic; thirty years. We are embarking on what will be the most
schemes, hydrogen electrolysis, smart metering, the benefits of a low carbon society. significant change to network design, management and
smart network technologies, energy storage and o building retrofit programmes; operation since rural electrification in the 1960s and NIE
flexibility. NIE Networks does not have all the answers nor can it Networks will evolve and enhance its capabilities and
or should it operate in isolation. We are committed to o shift to public transport.
skills to facilitate this new world.
ensuring our plans are part of a wider integrated ‘whole • Decarbonising heat
system’ approach and will continue to engage with The transition to a DSO will deliver whole system and
o setting end dates for fossil fuel boilers in new considerable customer benefits. NIE Networks intends
local government, the Utility Regulator, electricity sector
homes;
1.7 EVOLUTION OF NIE businesses, the other utility sectors, industry, commercial,
retail and domestic customers to further the development o promotion of low carbon heating (heat
to ensure that customers are at the centre of this
transition and has engaged with stakeholders throughout
NETWORKS’ ROLE of Northern Ireland’s strategy. pumps) in new and off gas grid dwellings and this journey. The transition will not only benefit active
commence this work now; customers through the facilitation of access to markets,
Through our four Sustainability pillars of ‘Community’, but will also benefit all customers through minimising
‘Environment’, ‘Workforce’ and ‘Future proofing’ and o continue to investigate and trial alternatives future network costs in the delivery of a low carbon
being a signatory to the European Distribution System to fossil fuels to fully understand the technical economy.
Operators (E.DSO) Sustainable Grid Charter, NIE
Networks has committed to addressing its own business
1.8 IN SUMMARY and economic case for deployment.
• Decarbonising transport
carbon footprint, ensuring the business has a minimal The decisions and actions we take over the next decade
or positive impact on the local, national and global o setting end dates for new petrol and diesel
will fundamentally determine the progress Northern
environment, community and economy. We will continue sales in Northern Ireland;
Ireland will make towards becoming a carbon free
to support and facilitate the UK Net Zero targets, deliver society. A Climate Change Bill for Northern Ireland and o kick start the electric charging infrastructure
our Sustainability Action Plan to achieve a business a new complementary Strategic Energy Framework industry that is urgently needed.
carbon footprint reduction of 12.5% (against our 2019 to 2030 are long overdue but are essential to setting
baseline) and embed sustainable practices within our • Enhancing the regulatory framework
policy and direction for the various sectors against which
everyday business operations. integrated plans can be advanced with some degree o Broader remit for Utility Regulator to promote
2. INTRODUCTION
CHAPTER 2 – INTRODUCTION
• Climate Change Challenge – This introduction summarises the Paris Agreement targets and legislative
commitments to Net Zero in the United Kingdom and EU. The Committee on Climate Change’s 6th Carbon
2.1 CLIMATE CHANGE forecast global emissions to well below 2°C and
that they can be achieved efficiently.
Budget outlines the expectation for Northern Ireland to reach an 82% reduction in GHGs by 2050 compared to CHALLENGE A new European Commission introduced the
1990 levels and to achieve Net Zero of CO2 emissions by 2050. This should be reflected in the new Northern
2.1.1 The Global Policy Context European Green Deal at the end of 2019, clearly
Ireland Climate Change Bill.
It is now well understood that climate change setting out more ambitious reduction levels for
• The Challenge for Northern Ireland – The Power sector has led the way in decarbonisation in Northern Ireland is a global problem requiring a global response. the EU as a whole and aiming to deliver Net Zero
with 49.2% of electricity consumption derived from indigenous renewable sources and exceeding the previous The Intergovernmental Panel on Climate Change GHG emissions by 2050 and to increase the
SEF target of 40% by 2020 one year early. NIE Networks considers that the Power sector could be one of the (IPCC) concluded that it was unequivocal that GHG emissions reduction target from 40% to
first to decarbonise and that targets should consider a renewable consumption figure of minimum 70% and a humans were influencing the climate. The 2015 55% by 203014.
diverse primary energy source mix including offshore wind production. Paris Agreement has an objective of “holding the In November 2019, the Sustainable Grid Charter
• NIE Networks supports the need for delivery of the second North South Interconnector. This investment is of increase in the global average temperature to was published. The purpose of the charter is to
strategic importance to Northern Ireland and will: (a) support economic growth and (b) facilitate the connection of well below 2 °C above pre-industrial levels and encourage policymakers and investors as well as
more renewable generation. pursuing efforts to limit the temperature increase DSOs to pursue sustainability in all its forms in
to 1.5 °C above pre-industrial levels”7. It aims the electricity distribution industry.
• Electricity demand is expected to almost double but demand shifting techniques and flexibility services are to achieve this objective by requiring bottom-up
expected to provide the ability to optimise infrastructure reinforcement. nationally determined contributions from each The E.DSO and its members (including
country that reflect their particular circumstances NIE Networks) stated their commitment to
• Heat – Government must produce a Heat and Buildings strategy which addresses the phase-out of fossil fuel
and capabilities. sustainability with regard not only to climate
heating and the rebalancing of policy costs between electricity and gas. Consideration must be given to updating
and environmental issues but also to social and
the Building Regulations and the promotion of low carbon alternatives. There is potential for repurposing the gas The increase in global temperature is determined governmental issues both now and in the future.
12 - I NTRODUCTION
I NTRODUCTION - 13
network away from natural gas. However, the technology and economics for a mass heat rollout application need mainly by total CO2 emissions over time, which
to be trialled and developed through the 2020s. Electrification through developed products such as heat pumps must fall to near zero in order to limit global The World Energy Investment Outlook (2014)
can provide an extremely efficient heating solution albeit the industry in Northern Ireland is not as developed as warming. The UK CCC states8 that today’s level Report has estimated that between 2014 and
elsewhere in GB and RoI. of warming is already having significant impacts 2035, the EU will need to invest a total of 650
around the world. The frequency of heatwaves billion USD into electricity grids to meet its
• Transport – The uptake of electric vehicles in Northern Ireland to date has been slow and somewhat hindered by
has increased in most land regions9. There are decarbonisation targets, 75% of this expenditure
the lack of an extensive charging network and lack of market entrants. An overall charging infrastructure strategy is
demonstrable impacts on heat-related mortality is in distribution networks to which the majority
required which will attract new entrants and encourage the switch to EVs.
particularly for elderly and vulnerable people10. of Renewable Energy Sources (RES) are
• Energy Strategy – NIE Networks has been proactively engaging with stakeholders in the development of energy Patterns of water availability are changing due to connected. Without appropriate investments in
strategy and believes a customer centric approach is essential. The outworking of policy must consider the impact melting land-ice and shifting rainfall in some parts electricity networks the energy transition will not
on costs and be balanced across current and future generations. It is vital that vulnerable customers are protected of the world. Flooding is also increasing in coastal happen15.
from unequal cost burden but must also share in the benefits of a zero-carbon society. areas as climate change pushes up sea-levels.
2.1.3 United Kingdom Context
• Green Recovery – The required investment for Net Zero could support the UK’s and Northern Ireland’s economic Climate change is being increasingly linked with
making the conditions for wildfires more likely11 In June 2019, the UK government announced a
recovery post-pandemic by ‘building back better’ using green technologies.
and has also affected crop yields, with more UK target of Net Zero GHG emissions by 2050
• Sense of Urgency – Many steps can be taken with confidence in the next decade and should begin immediately. negative than positive effects12. following recommendations made by the CCC16.
There are policy, regulatory and strategy directions that require urgent resolution but key is a coordinated approach This change to legislation came into force on 27
from policy makers. Rapid and sustained reductions in GHG June 2019 and amended the Climate Change
emissions will be needed over several decades Act 2008 target of an 80% reduction in GHG
to keep additional warming within the limits of the emissions compared with the 1990 levels.
Paris Agreement.
In the last three decades, UK GHG emissions
2.1.2 European Context have fallen at an average rate of 13 MtCO2e
EU legislation generally takes a long-term view (Metric tons of carbon dioxide equivalent) per
on climate and energy policy. As early as 2011, year which equates to a 40% reduction. Outside
the 2050 Low Carbon Economy Roadmap of the electricity supply sector, emissions have
demonstrated that it was feasible and affordable fallen at an average rate of just 7 MtCO2e per
for the EU to reduce domestic emissions by 80% year. Progress has been quicker in recent years,
by 2050 compared to 1990 with a milestone of a primarily led by the UK’s transition from coal-fired
40% reduction by 2030 which is reflected in the power generation towards low-carbon generation.
current UK Climate Change Act requirement. Although in the last five years emissions have
fallen by 16 MtCO2e on average, they must fall
On 28 November 2018, the EU Commission at a faster rate to meet the 6th Carbon Budget
presented its strategic long-term vision for a (by around 21 MtCO2e per year). However, the
prosperous, modern, competitive and climate- power sector can no longer be relied upon to
neutral economy by 2050. Within the Strategy, deliver the majority of these reductions; progress
the EU confirmed that a minimum reduction of must extend to all sectors of the economy17.
80% of GHG emissions13 would be consistent
with the Paris Agreement objectives of reducing Momentum in the UK is building towards the
UK’s Net Zero objective. 80% of the public are
Glide Path to Northern Ireland Net Zero CO2 Emissions by 2050
110
GHG & Carbon Emissions (Percentage of 1990 Emissions)
6th Carbon Budget
100
90
80
70
5th Carbon Budget Target for 2030 (GHG)
60
concerned about climate change and 66% of 2.1.5 Northern Ireland Context 6th Carbon Budget Target for 2030 (GHG)
50
people are now aware of Net Zero specifically, up Northern Ireland does not currently have climate
from around 50% earlier in 202018. change legislation separate to the UK, however 40
The CCC has created and analysed five different its New Decade, New Approach agreement
30
scenarios within the 6th Carbon Budget. These announced in January 2020 states; ‘the Executive
options are to confirm the level of ambition will introduce legislation and targets for reducing 20
required across different sectors and are listed carbon emissions in line with the Paris Climate
10
below: Change Accord’22. GHG emissions from
Northern Ireland contribute to the UK total under 0
• Headwinds Pathway; the Climate Change Act 2008, meaning deep 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050
emissions reductions in Northern Ireland are Year
• Widespread Engagement Pathway;
crucial if the UK is to meet its obligations under GHG Emissions CO2 Emissions
• Widespread Innovation Pathway; the Paris Agreement.
• Tailwinds Pathway; Figure 1 – Glide Path for Northern Ireland GHG & CO2 Emissions by 2050
Northern Ireland has devolved responsibility
• Balanced Net Zero Pathway. for energy policy, excluding nuclear energy and
carbon capture and storage (CCS) which are to 27% in Northern Ireland26. There is no purely Northern Ireland by 2050, that will represent an
Each of the pathways can be studied further covered at a national level. Since November technical reason why Net Zero is not possible equitable contribution to achieving UK-wide Net
in the CCC’s 6th Carbon Report. However, 2007, the electricity industry has been operating in Northern Ireland. However, Net Zero GHGs Zero by 2050 as recommended in the CCC’s 6th
the report concludes that due to the relatively in the Single Electricity Market (SEM) – a single in Northern Ireland would mean a substantial Carbon Budget.
balanced mix of contributions from demand- wholesale market across the Island of Ireland. reduction in output from Northern Ireland’s
14 - I NTRODUCTION
I NTRODUCTION - 15
Northern Ireland accounted for 4.3% of UK GHG
side action, electrification, hydrogen and GHG Northern Ireland is a joint member of the all-island livestock farming sector or (possibly and) much
emissions in 201829 and its GHG emissions
removals, the ‘Balanced Net Zero Pathway’ Integrated Single Electricity Market (I-SEM) greater than equal share of all UK GHG removals
have been reducing, with the latest emission
provides the best balance between level of shared with the RoI which went live in October being located in Northern Ireland compared to
statistics published in June 2020 confirming
ambition and meeting the Net Zero target. This 201823. The primary aims of the market are to: its current emissions, population or economic
a decrease of 2.5% in 2018 compared with
pathway places the UK in line with the most output27. The CCC suggests it is therefore fair
• integrate the all-island market with the European 2017 to 19.4 MtCO2e. The longer-term trend
ambitious commitments for 2030 compared that, as well as taking the right actions to reduce
Internal Energy Market; indicates a decrease of 20% in Northern Ireland’s
to similar countries also targeting Net Zero by emissions from agriculture, some of these
greenhouse gas emissions compared to the
205019 and leaves the UK well-placed to support • increase opportunities to trade in different time emissions should be offset by ‘sinks’ that are
base year (1990). The largest sectors in terms
raising international ambition as the host of frames; and located elsewhere in the UK28. Sectoral Breakdown of Northern Ireland
of emissions in 2018 were agriculture (27%);
DAERA is presently consulting on a ClimateGHG Emissions
COP2620 and President of the G721.
• to increase the efficiency of cross-border transport (23%) and energy supply (15%) as
2.1.4 Ireland Context interconnectors. Change Bill for Northern Ireland. NIE Networks shown in Figure 2 below. Most sectors showed a
Waste Other*
would support the bill setting interim emission decreasing trend since the base year.
As a member of the EU, the Irish Government The nature of the all-island market means that Management
reduction targets and a long-term target for
developed its National Energy and Climate Plan any energy policies in Northern Ireland that affect Sectoral Breakdown of Northern Ireland 4%
(NECP) required by Article 15 of EU Regulation the supply-side of energy must be compatible GHG Emissions 4%
(EU) 2018/1999, then subsequently published with RoI policy, and vice-versa, in order to avoid Business 12% 27% Agriculture
its Climate Action Plan in 2019. market distortions that incentivise inefficient Waste Other*
19.4
generation. Management
The key features of the plan include:
In the CCC’s ‘Balanced Net Zero’ Pathway,
4%
• a five-year Carbon Budget and sectoral targets 4%
with a detailed plan of actions to deliver them; Northern Ireland is expected to reach an 82% million tonnes
reduction in GHGs by 2050 compared to 1990 Business 12% Residential 27%
14% of carbon dioxide
Agriculture
• formation of a Climate Action Delivery Board equivalent
19.4
levels, excluding engineered greenhouse gas
overseen by the Department of the Taoiseach to removals24. As a sub category of all GHG’s, (CO2e)
ensure delivery; Northern Ireland is expected to achieve Net
• formation of an independent Climate Action Zero of CO2 emissions by 2050 due to the long million tonnes 23% Transport
Council to recommend the Carbon Budget and lasting impacts this gas creates25. This glide path Residential 14% of carbon dioxide 15%
evaluate policy with strong accountability to an to meet these targets is visualised in Figure 1. equivalent
Energy Supply
Oireachtas Climate Action Committee; and The CCC 6th Carbon Budget expects that some (CO2e)
• carbon proofing all Government decisions and parts of the UK will be ‘net sources’ of GHGs by
major investments. 2050 with emissions offset in other parts of the 23% Transport *Other consists of the following:
UK that are ‘net sinks’. 15% Land Use Change 3%
The 2019 Climate Action Plan is presently Public 1%
Northern Ireland is a significant net exporter Energy Supply Industrial Process 1%
under review to reflect higher commitments by
significantly increasing or advancing original of agri-food products with nearly 50% of all
targets. agri-food products produced in Northern Ireland
*Other consists of the following:
consumed in the rest of the UK. Around 10% of Land Use Change 3%
all UK emissions are from agriculture, compared Figure 2 –Sectoral Breakdown of Northern Ireland’s 2018 Greenhouse Gas
Public 1%Emissions
Industrial Process 1%
2.2 T
HE CHALLENGE FOR Since the publication of the SEF 2010-2020, the volume of renewable generation grew from approximately
450MW to 1,700MW.
NORTHERN IRELAND The technology mix of connected renewable generation in Northern Ireland as of end Q4 2020 is shown in
Table 1 below summarises the suggested targets set out in Section 2.1.5 above for Northern Ireland:30 Figure 4 below, with wind being the major contributor of 1280MW. There is also a further 343MW of renewable
generation technology committed to be connected to the network.
Time Period Reduction in all GHG Emissions Reduction in CO2 Emissions
Compared to 1990 Levels Compared to 1990 Levels Committed and Connected Generation
2030 48% 56% Other/Mixed Schemes18 Biogas Other/Mixed Schemes19 Biogas
Average over UK 6th Carbon 60% 70% 110
PV 141
Budget Period (2033-2037) PV
268 289
2040 69% 83% Hydro/Tidal Hydro/Tidal
Total c. 8 8
Total c.
2050 82% Net Zero
1684MW + 343 MW
to Connect
2027MW
Table 1 - Intermediate Emissions Reduction Targets for Northern Ireland Wind 1280 Wind 1570
16 - I NTRODUCTION
I NTRODUCTION - 17
2.2.1 Power Sector
In 2010 the Strategic Energy Framework (SEF) The percentage of total electricity consumption NI Connected Renewable Generation NI Connected and Committed Renewable
for Northern Ireland set an ambitious target generated from indigenous renewable sources, Technology Mix Generation Technology Mix
for 40% of demand to be met by Renewable as a twelve-month rolling average, is illustrated
Energy Sources for Electricity (RES-E). Northern below. For the 12-month period January 2020
Ireland was successful in achieving this target to December 202031 this totalled 49.2% of total Figure 4 – Northern Ireland Connected Renewable Generation Technology Mix
objective one year in advance of the 2020 target. electricity consumption.
Renewable Electricity Consumption The DfE which is responsible for energy policy is Generation
in the process of developing the next SEF 2020- The National Infrastructure Strategy (NIS)
2030, with the Energy Strategy consultation states that the UK has committed to ending coal
60%
Renewable Energy Generated as
% of Total Electricity
released on the 31st March 2021 and the electricity generation no later than 2025. The
final SEF due in November 2021. This policy CCC’s ‘Balanced Net Zero’ Pathway proposes to
50%
will create a roadmap to the 2030 ambitions decarbonise electricity generation completely by
40%
and will require a transformational change to 2035, with action thereafter focused on meeting
the transmission and distribution systems in a new demands in a low-carbon way33. This would
30% number of different policy areas. Promising levels mean no new unabated34 gas plants should be
of ambition for this new SEF are emerging, as built after 2030, and the burning of unabated
20% the Economy Minister has recently stated that a natural gas for electricity generation should aim
supportive policy environment is needed to deliver to be phased out entirely by 2035. Any gas plant
10% these Net Zero investments and that whilst work built before 2030 should be made ready for a
is ongoing, evidence should be gathered to set switch to CCS.
0% the new target. Initial considerations are that the
For Northern Ireland, NIE Networks considers
Dec-10
May-11
Oct-11
Mar-12
Aug-12
Jan-13
Jun-13
Nov-13
Apr-14
Sep-14
Feb-15
Jul-15
Dec-15
May-16
Oct-16
Mar-17
Aug-17
Jan-18
Jun-18
Nov-18
Apr-19
Sep-19
Feb-20
Jul-20
Dec-20
2030 target should not be below 70 per cent32.
This would be consistent with ambition levels in that the Power sector could be one of the first to
the RoI. decarbonise. Targets in the SEF should consider
Rolling 12 Month Average For Period Ending not just a renewable consumption figure but also
an assessment of the primary energy source
mix most optimal for Northern Ireland including
Figure 3 - Rolling 12 Month Average from December 2010 to December 2020
offshore wind production.Figure 535 below provides an overview of the technology options and potential mix based on the assumptions derived Interconnection Customers, or aggregators operating on their
from the Element Energy and TSO’s Tomorrows Energy Scenario Northern Ireland (TESNI) processes. There is a broad Northern Ireland currently has interconnection behalf, will be scheduled or signalled to flex
range of technologies that can be offered into the market including offshore wind, marine tidal energy, carbon capture and with the RoI and Scotland. The interconnection their assets so that NIE Networks can analyse
storage. Generation Mix By Year with the Irish transmission system enables the the response and network impact in Flexibility
power system to be operated on an all-island Trial Zones (FTZs). The FTZs in this tender are
basis. The Greenlink Interconnector between RoI distributed across Northern Ireland covering 15%
10,000 of all customers.
Generation Capacity (MW)
MP: Modest Progress ACC: Addressing Climate Change AA: Accelerated Ambition
and Wales and the development of the Celtic
9,000 interconnector between France and RoI (due to If the trial is successful, Flexibility could be
energise in 2026) will provide market participants used to manage emerging network congestion
8,000 greater access to the wider European market, in future regulatory periods41. To enable further
helping to suppress wholesale electricity prices, development of such techniques, digitalisation
7,000 reducing renewable electricity constraints and of current electricity meters and a review of tariff
enhancing security of supply. For Northern Ireland structure is required. This is outlined further in
6,000
customers to benefit from the increasing levels Chapter 6.
5,000 of interconnection into Ireland, it is essential
that the second North South Interconnector is Storage
4,000 constructed and commissioned. Storage that will capture surplus energy when
3,000 This investment is of strategic importance to demand is low and provide backup generation
Northern Ireland and in addition to the benefits when demand is particularly high will be required
2,000
set out above will support economic growth in to extract maximum benefit from the ever-
18 - I NTRODUCTION
I NTRODUCTION - 19
Northern Ireland and will facilitate the connection increasing share of variable renewables.
1,000
of more renewable generation to the network. The CCC’s Balanced Pathway scenario expects
0 batteries to provide within-day flexibility to offer
Year MP ACC AA MP ACC AA MP ACC AA MP ACC AA The project is needed because at present
2020 2025 2030 2040 2050 although the electricity transmission network services to the energy system at short notice
operates on an all-island basis, there is currently and assumes 18 Gigawatt of battery storage
Coal Oil Gas CC Gas Wind Solar Marine Biomass Interconnector capacity across the UK by 2035, highlighting its
only one 275kV interconnector linking North and
South. This restricts the amount of electricity that importance in the future energy system42.
Figure 5 – Possible Generation Mix by Year depending on Progress
can flow between the two networks. The CCC’s Balanced Pathway scenario uses
hydrogen as the primary source of storage for
Demand
Figure 6 below illustrates the levelised cost estimates for generation projects commissioning in 2025, 2030, 2035 power generation. Surplus electricity generation
and 204036. In line with Figure 5, which highlights a significant increase in renewable technology out to 2050, the Electricity consumption in Northern Ireland peaks could potentially be used for electrolysers
commissioning of new renewable generation will become economically advantageous, as the cost of renewable during the winter months and is at its lowest to produce hydrogen subject to favourable
generation is projected to continually decrease. In comparison, alternative generation methods such as Combined during the summer months. Total consumption economic appraisal. In the Balanced Pathway
Levelised Energy
Cycle Gas Turbines Coststofor
are projected Projects
increase in 2025,
in cost, reaching a 47% increase from 2025 to 2040. in 2020 was 8.9 Terawatt hours (TWh)37 and is scenario, 25% of hydrogen supply comes from
forecast to potentially reach 15.7TWh by 2050.
2030, 2035 and 2040 in Real 2018 Prices This increase in demand is expected as other
electrolysis in 2035, increasing to 45% by 2050.
sectors transform to low carbon alternatives The UK Government’s Hydrogen Strategy is due
140 to be published in spring 2021. It will set out a
£/MWh (Central Scenario)
such as EVs and low carbon electric heating
such as heat pumps38. The potential for green vision for hydrogen’s role in meeting Net Zero
120 in the longer term, together with the actions,
hydrogen production in Northern Ireland through
electrolysis could create a further increase in regulations and incentives across end-use
100
electrical demand. applications and supply to develop hydrogen’s
80
role over the next decade43. Regardless of the
Even though the demand is expected to almost outcome of this strategy it should not restrict the
double, demand shifting techniques such as general direction of travel of increasing RES-E
60
pre-heating in buildings, storage availability, smart and in preparing for the associated infrastructure
40 vehicle charging and decision making informed investment now.
by smart metering39 are expected to provide
20 flexibility and ensure optimisation of infrastructure Regulatory Issues
reinforcement40. Overall, policy must tackle both the demand-side
0 and supply-side for low carbon products and
2025 2030 2035 2040 One such example of a demand shift technique
ensure relevant infrastructure is available when
is NIE Networks’ first ever Flexibility tender. This
Commissioning Year needed. This will require network infrastructure
tender offers customers opportunities to support
to be built ahead of the time of need so it can act
CCGT H Class Offshore Wind Onshore Wind Large Scale Solar CCGT & CSS Post Combustion their local distribution networks by being flexible
as an enabler to the decarbonisation targets. It is
with their electricity consumption or generation,
vitally important that network constraints should
earning revenues in return.
not become a blocker to the transition. The cost
Figure 6 - Comparison Between Generation Technologies Over TimeYou can also read
