Achieving net zero: a key role for digitalisation and open data

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Sam Tye
Fladgate, London
stye@fladgate.com

Tim Wright
Fladgate, London
twright@fladgate.com

Net zero 2050

The United Kingdom’s Climate Change Act 2008^[1] imposes a legal duty on the Secretary of State to ensure that the net UK carbon account is at least 100 per cent^[2]lower than the 1990 baseline by 2050 – the aggregate of net UK carbon dioxide and other targeted greenhouse gases (GHGs) in that year. This means that, by 2050, all UK GHG emissions must be balanced by schemes to offset an equivalent amount, such as planting trees and using technologies like carbon capture and storage (CCS). In other words, the UK must complete its transition to a net-zero GHG emissions economy by 2050 (net zero).

UK electricity system

National Grid ESO (ESO) is the UK electricity system operator. It is a separate legal entity within the National Grid PLC group, operating alongside National Grid Electricity Transmission which owns the high-voltage transmission network in England and Wales (ie, the pylons and cables needed to move electricity around). The ESO does not generate or sell electricity – its role is to maintain and manage the national grid, moving high-voltage electricity on the transmission system to local distribution network operators (DNOs). The DNOs in turn reduce the voltage of the electricity and distribute it to homes and businesses.

Future energy scenarios

The ESO recently published its 2020 Future Energy Scenarios (FES 2020)^[3] report setting out several so-called credible pathways (scenarios) for the future of energy in the UK^[4] over the next 30 years. The report, which is based on input from over 600 experts, makes clear that reaching net zero by 2050 or earlier will require immediate action across all key technologies and policy areas, with fundamental changes for energy consumers, particularly in transport, heating and energy efficiency.

FES 2020 describes how three of the four scenarios modelled show the UK achieving net zero by 2050. Across all scenarios modelled, the ESO sees continued growth in renewable energy generation with significant expansion in installed offshore wind capacity, alongside a widespread uptake in domestic electric vehicles (EVs) and growth and investment in hydrogen and CCS technologies.

For instance, the most stretching of the scenarios modelled by the ESO sees over 30 million EVs on the road by 2040, with 80 per cent of households smart charging their EVs overnight by 2050; and 45 per cent of homes offering up to 38GWH of flexible electricity to help actively manage the grid by shifting demand for electricity to reduce peaks. Vehicle-to-grid (V2G) services will add additional flexibility to the system providing up to 38 GW from 5.5 million vehicles. Fundamental changes to the way we heat our homes will also be required by 2050, with 20 million heat pumps installed in place of today’s natural gas boilers and eight million homes actively managing their heating demands with heat storage and non-peak usage.

The ESO said that the full extent of Covid-19 became apparent too late to be factored into its analysis but will be examined fully in its 2021 report. However, the ESO notes that many of the areas highlighted in FES 2020 will be crucial to a green recovery with particular emphasis on improving energy efficiency across all sectors and significant investment in low carbon electricity generation.

Open data^[5] and digitalisation

The ESO says that: ‘[v]isibility and interoperability standards must be embedded to maintain options for smart management and market participation’, with cross-sector regulation needed to simplify the changes needed to be made by consumers. Open data and digitalisation are identified as essential tools which are needed to realise energy efficiency across the network and achieve the ESO’s net-zero scenarios. Open data and digitalisation ‘underpin the whole system thinking required to achieve net zero’ and are ‘critical’ to navigating the increasing system complexity at the lowest cost to consumers.

The ESO goes on to state that, as energy market participants rapidly expand, access to open data is ‘fundamental to ensuring efficiency’, and that whole system interaction will also increase, with consumer technology choices made today influencing decarbonisation pathways and options for efficient whole system operation in the future.

According to the Open Data Handbook,^[6] open data refers to ‘data that can be freely used, re-used and redistributed by anyone – subject only, at most, to the requirement to attribute and sharealike.’

To delve a little deeper, open data must be:

• available as a whole (in a convenient and modifiable form) and at no more than a reasonable reproduction cost – preferably by downloading over the internet;
• provided under terms that permit its re-use and redistribution including intermixing with other datasets; and
• available for everyone to use, re-use and redistribute without discrimination, such as a ‘non-commercial’ restriction which would prevent ‘commercial’ use, or restricting use for certain purposes (eg, only in education).

Open data supports interoperability (ie, the ability to intermix different data sets). This is important because without interoperability it is impossible to build the kind of large, complex systems which the UK's whole-economy energy transition requires.

Research and advisory company Gartner defines digitalisation as ‘the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business.’^[7] Also referred to as digital transformation, examples include online platforms, AI-powered chatbots, process automation software and cloud computing.In the energy system context, digitalisation is a necessary component for the implementation and adoption of a range of smart technologies, including heat demand management, smart and rapid charging for EVs, and V2G, as well as industrial tech such as carbon capture and hydrogen production.

Fundamental change needed

The ESO’s report makes clear that while progress towards net zero has been made, including the ESO’s own plans to operate a zero-carbon electricity system by 2050, fundamental changes to the UK’s energy sector are still required, and digital technology and open data will play a key role in facilitating these changes.

There are significant opportunities for improving the efficiency of the energy system. The increase in Balancing System Use of System (BSUoS) charges that arose in the first half of 2020 is a prime illustration of the cost of inefficiency. In February 2020, the ESO was predicting BSUOs charges of approximately £1,478m in 2020/21. By May 2020, the ESO was predicting BSUOs charges of approximately £2m for the same period. These increased costs arose due to the continued surge in electricity being generated by renewable sources combined with an unforeseen slump in demand. While the sudden reduction in electricity demand was unprecedented, this year has given some insight as to the potential costs and difficulties that are likely to be faced in the coming years without improvements in the efficiency of the energy system. There is no doubt that some of these improvements in efficiency will be delivered through innovative solutions that can only be developed through the availability of open data and interoperability.

The Department for Business, Energy & Industrial Strategy (BEIS) is due to publish its delayed Energy Whitepaper, Heat Strategy and Buildings Strategy this autumn, and the Government’s National Infrastructure Strategy, along with the Department of Transport’s net-zero roadmap, are due to be published by the end of the year. With all this in mind, we expect the Government to take further steps to beef up its clean energy policies as well as considering the called-for regulation to ensure cross-sector open data and interoperability standards needed to support the energy transition.

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