WWU – a top performing UK Gas Distribution network • Replaced 40% of our 35,000km network - delivering the lowest planned interruptions times for customers across the UK. • We efficiently invest nearly £200m per annum in our network • Consistently meet key emergency standards for the 90,000 emergency calls we get per year – something not achieved by all in the sector • Deliver sector leading customer performance for the 2.5m customers we serve. There is a total population of over 7.5m in our geography • Connect 11,000 new customers each year - we have now completed over 10,000 fuel poor connections Sector leading Innovation - we have just completed the 16 th Biomethane connection to our network • • Our total resource is just under 2,000 people • Gained a raft of awards along the way including a “ROSPA Gold” award for “exemplar” management and delivery of health and safety 2 We have a clear ambition, clear priorities and behavioural values that underpin our performance
We focus on delivering outcomes 3 Our unique and valued vulnerable customer panel help us drive our vulnerable customer strategy to support the most vulnerable across our region. Wider collaboration with other utilities across our region has been suggested as a potential benefit
We focus on delivering outcomes 4 We have supported over 12,000 families through our fuel poor scheme since 2008. We are working hard with our partners and policy makers to support over 1,000 families per year. We want to do more and we are keen to hear your views on future opportunities
Context for WWU and the UK energy sector • Energy mix & carbon targets – affordable and secure generation, heat and transport to support a low carbon future • Customer needs and engagement – population growing & ageing, social media, “prosumers” • Investment support – regardless of the future, the role of the investor is crucial. RIIO GD2 (the next price control review 2021) is a significant milestone we are planning for • Smart Meter Rollout – replacing circa 50million gas and electric meters is a major challenge for the energy sector. Still a level of uncertainty on network impacts. There will be 2.4m gas meters replaced across our network by 2020 • Political change – devolution & variable (local) energy philosophies, five year cycles • The future structure & regulation of the energy sector – all elements under the spotlight • Deployment/impact of innovation and new inventions – how do we ensure the customer benefits? Gas has played a major role to date and evidence supports a continued long term role for gas 5 To date much of the focus has been on electricity generation. The vital role of the gas network and the significance of energy for (peak) heat is only now being understood
Context for WWU and the UK energy sector Gas has played a major role to date and evidence supports a continued long term role for gas 6 To date much of the focus has been on electricity generation. The vital role of the gas network and the significance of energy for (peak) heat is only now being understood
What does an 80% reduction mean for a customer? 2050 2015 Reduction (60%) 1.92 4.79 2.87 (t/CO2/a) (t/CO2/a) (t/CO2/a) • Assumed gas usage: 16,500 KWH PA – generating 3.05 tonnes of Carbon per annum 16,500 (kWh/a) x 0.185 (kg/kWh]/1000 = 3.05 (t/CO2/a) • Assumed electricity usage 3,300 KWH PA - generating 1.74 tonnes of carbon per annum 3,300 (kWh/a) x 0.527 (kg/kWh)]/1000 = 1.74 (t/CO2/a) Based on detached house in Bridgend, excludes emissions from transport. Green Hydrogen blended with CH 4 would significantly reduce emissions 7
Two key recent WWU case studies… • Bridgend Town: – A unique and innovative bottom up approach looking at the energy challenges and solutions faced by consumers in Bridgend town now and into the future – “An objective and independent review of whether or not to continue to invest operationally now; and strategically into the future in UK gas networks” • Cornwall Energy Island: – A unique and innovative project to develop a bottom up Energy model for heat, light and power • Collaboration is a key feature of our work and we fully engage with: – The ETI Smart Systems and Heat work – The Energy Systems Catapult – BEIS – Welsh Government, some local authorities – Academia & focus groups Our unique research looking at real people and actual house types in actual towns using real demand and supply figures 8
Bridgend research – key findings – Electric heat pumps currently increase emissions and cost compared to gas boilers – Real examples of UK energy switching revealed that initial capital cost is the key factor that influences consumer switching behaviour – 80% of consumers would not/could not afford to change to lower carbon heat provision such as heat networks – Very large subsidies would be needed to change consumer preferences – Renewables intermittency require unprecedented seasonal storage requiring prohibitive investment – Energy demand varies significantly seasonally and peak demand is not met via government policy – Green gases (e.g. Biomethane) require lower investment than other renewables Alternatives do not deliver the energy trilemma – gas is currently lowest cost, lowest emission and most secure 9
Project Conclusions • Phase 1 – The 2013 DECC pathway for heat does not solve the energy trilemma • Phase 2 – People’s ability to pay; and behaviour play a key role in future pathways • Phase 3 – Policy options may have profound impacts on consumers. It is likely that we will have to compromise on the energy trilemma • Innovation and efficiency will clearly need to bridge the gaps if we are to meet the energy trilemma, including the 2050 aims. E.g.: Hydrogen blending with methane, CNG vehicles, gas appliances?? • We cannot look at heat in isolation. We must look at the heat, power and transport together. Effective utilisation of the gas and electricity grid is very important • Different communities likely to need different solutions • Devolved regions will have a pivotal role to play in future pathways Overall – Not only will we have a gas network in 2050, but gas and the 10 gas grid can play a pivotal role in moving to a low carbon energy future
The Energy Island Concept • Peninsula of Cornwall – could it be self sufficient? • Cornwall is rich in natural energy resources, including wind; solar and deep geothermal. • Partnership created to consider low carbon future – Burohappold Engineering; Eden Project; Local Enterprise Partnership & Cornwall County Council. • Participants at workshops felt that these could provide the majority of energy needs, balancing supply and demand. We are currently engaged with welsh contacts to develop a welsh study utilising whole systems approach modelling 11
What has the Cornwall Energy Island case study covered? • Overall objective: – A unique and innovative project to develop a bottom up Energy model for heat, light and power • The approach: – Gather information on heat, light and power demand and supply for Cornwall – Ensure annual and peak data points are included – Build an energy model to show the costs, security of supply and environmental impacts of different “energy mix” options – Independently test the model inputs and outputs – Share model outcomes / learning with policy makers – Apply model to UK and other regions Unique bottom up model using actual demand and supply information for a real region 12
Cornwall Energy model – key findings – Only 6.5% of heat, light and power needs are currently being met from renewable energy generation – If the renewable generation % increases, huge additional storage is required – The cost of current non gas storage is so high it cannot be considered as viable option to support renewables – The gas network is providing secure, low cost and flexible within day and inter seasonal storage that cannot be feasibly replaced – Utilising the gas network with natural gas alternatives will save consumers significant amounts of money compared to alternatives – The wide range between Winter / Summer demand and within day ranges of energy demand require long term use of the gas network Alternatives do not deliver the energy trilemma – the gas network is currently lowest cost, lowest emission and most secure route to long 13 term energy solutions
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