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Local generation could make up more than two thirds of the total capacity of the energy system by 2050, National Grid has predicted in its latest Future Energy Scenarios.

The system operator has forecast generation capacity will rise from 103GW today to between 178GW and 268GW by the middle of the century.

The annual report has been reframed this year around the issue of decentralisation.

In the previous iteration the four scenarios it painted were divided between those in which progress on decarbonisation is stronger or weaker, and those in which the country is more prosperous or less prosperous.

This time around the scenarios are still split according to the strength of progress towards decarbonisation. However, the other dividing line is now between those in which the energy system is more centralised or less centralised.

The four scenarios

In the community renewables scenarios – the one in which progress on decarbonisation is swift and the energy system is more decentralised – generation capacity is forecast to hit 158GW by 2030.

Of this, 48GW is distributed generation and 23GW is microgeneration. Together they make up 45 per cent of total capacity.

Overall capacity is then predicted to swell to 268GW by 2050, with distributed and microgeneration accounting for 65 per cent of the total at 91GW and 82GW respectively.

By comparison, capacity is predicted to increase to just 189GW by 2050 in the steady progression scenario, in which decarbonisation is slower and the energy system is more centralised.

Distributed generation is expected to grow to 44GW and microgeneration to 27GW, accounting for 38 per cent of the total.

At the moment, Great Britain has 103GW of generation, of which 27 per cent is local. There is currently 23GW of distributed generation and 5GW of microgeneration.

Centralised versus decentralised generation

Another key focus of the report is the rise of electric vehicles (EVs).

National Grid has substantially increased its forecasts for the number of EVs on the roads to as many as 10.6 million by 2030 and 36 million by 2040 when the proposed ban on sales of new petrol and diesel vehicles is set to come into effect.

The equivalent figures from the four main scenarios in last year’s report are 9.3 million and 17 million.

National Grid said EVs could add up to 8.1GW to peak demand by the end of the next decade and 12.7GW come the middle of the century.

However, they could also increase storage capacity by as much as 1.1GW by 2030 and 20.6GW by 2050. Total storage capacity is expected to expand to up to 10GW by 2030 and 50GW by 2050.

Gas remains the dominant form of heating in all but one of the scenarios. In the two degrees scenario that portrays a world in which decarbonisation is faster but the energy system is less centralised, around a third of homes are heated using hydrogen by 2050.

Only in the community renewables scenario is there truly widespread electrification with heat pumps becoming dominant.

In all four scenarios annual energy demand is predicted to be lower in 2050 than it is today, despite higher peak demand for electricity.

Heating by type

Fintan Slye, director of the system operator at National Grid, said: “The continued growth in electric vehicles, a greater volume of low carbon generation and the advancement of storage technology, are among the major trends that have emerged from this year’s report.

“This means balancing energy supply and demand will become increasingly complex between now and 2050. The growth of decentralised generation, meeting carbon reduction targets for heat and the continued importance of gas furthers the need for a co-ordinated approach across the whole industry.”

Energy and clean growth minister, Claire Perry, said: “With demand for electricity expected to increase, gas has a key role to play in our energy mix. As part of our modern industrial strategy, we will continue to explore options for safe and secure domestic supplies of gas, such as hydrogen, biogas and natural gas from shale.”