Energy Security in an Uncertain World

1. Energy Security in an Uncertain World Andy Boston Technical Head, Business Modelling September 2011

2. The Trilemma Carbon There has, rightly, been a strong focus on reducing CO2 emissions Sustainable Cost Security Security of Supply Jan 09 Business Modelling

3. The Trilemma Carbon Sustainable But security is put at risk by uncertainties at different timescales Cost Security Security of Supply Jan 09 Business Modelling

4. Timescales of Threats to Security 1 decade 1 year 1 month 1 day 1 hour 1 minute 1 second Demand Existing demand growth TV pick-up Weather forecast errors New loads Aging assets Network HV Grid constraints Unexpected circuit loss LV Grid constraints Circuit outages Generation Climate Change Insufficient planned build Delays to new build Wind forecast errors Insufficient flexible dependable plant Reduced inertia Enforced closures Unexpected unit trip Long term breakdown Short term breakdown Fuel Supply Availability Security of Supply Jan 09 Business Modelling

5. New generation Nuclear CCGT Coal OCGT Timescales of Mitigation Measures 1 decade 1 year 1 month 1 day 1 hour 1 minute 1 second Automatic disconnection Demand Energy efficiency Demand Side management DS Frequency response Voltage reductions Network Grid strengthening Smart Grids Buffer batteries Constrain Generation Generation Green house gas emission reductions Price Signals Legislation Grid warning: NISMs Return mothballedplant to service Reserve New storage Generator Frequency response Design improvements Balancing mechanism Derogations Opt-outs Fuel diversity & renewables Security of Supply Jan 09 Business Modelling

6. Uncertainty Timescale: seconds • Inertia is being removed from the system: • Conventional generation has higher inertia than wind • Unit size could increase: EPR at 1600MW up from Sizewell at 1100MW. • Need for greater inertia or fast acting response TV pickup Generator trip Security of Supply Jan 09 Business Modelling

7. Uncertainty Timescale: minutes to hours • Output can vary by up to 6% capacity in 10 minutes • So 30 GW wind will need +/-2GW capacity to actively balance in that timescale Simulated UK wind output over 1 day at 10 minute resolution Standard deviation of 10 minute changes = 2.5% Security of Supply Jan 09 Business Modelling

8. Uncertainty Timescale: hours and days • There’s a need for very flexible generation to meet sharp peaks • There are periods of over generation where storage can avoid spill Tidal (SB) Wind Flexible generation Nuclear Spill Security of Supply Jan 09 Business Modelling

9. Uncertainty Timescale: days and weeks 8TWh gap Five day period with very little wind. Peak demand for 2006 occurs in middle of this period when output of combined portfolio was 6% of capacity. Security of Supply Jan 09 Business Modelling

10. Uncertainty Timescale: Weeks and months • Weather events last a few days. UK wind output varies from <10% to >80% capacity on that timescale. • Note also weekend effect on demand and seasonal variation across the year Renewables Firm backup Daily energy (GWh) Security of Supply Jan 09 Business Modelling

11. Uncertainty Timescale: Years • Policy and markets influence generation mix over many years Marine Bio CCS Nuclear Oil Wind 20 years 20 years 10 years 10 years Gas Coal Evolution to diverse energy supply with many technologies Security of Supply Jan 09 Business Modelling

12. Summary • There are uncertainties on all timescales from < 1 second to > 4 decades • Utilities have to: • Understand the threats • Undertake appropriate mitigation • Consider the entire supply chain from energy source through conversion and transmission to utilisation • And have to understand the effects of mitigation at one timescale may impact security of supply negatively at another timescale. • So the solutions are complex and diverse Uncertainty / MEGS Sep 11 Business Modelling