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• Trade-offs and co-benefits need to be actively managed if multiple environmental objectives are to be achieved and the low carbon transition is to enhance the natural ecosystems that are essential to prosperity and well-being. UKERCs research on environmental goals informs the answer to Q1.
• Energy efficiency and heat system retrofit in buildings offers an immediate triple-win in terms of economic stimulus, societal benefits and environmental goals. A strong long-term economic case can also be made to boost investment in all of those areas where the UK will need to build infrastructure and capacity in order to meet decarbonisation objectives. UKERC has examined the evidence on green jobs. We explore this in more detail in our answer to Q2.
• There are already skills gaps in the sectors relevant to energy efficiency retrofit and it is important to invest in addressing these, as we explain in the answer to Q3.
• Further action is needed to strengthen the industrial strategy. Ambition needs to go well beyond the aim to decarbonise one (or even all) of the UKs industrial clusters. Decarbonising all of industry will require research, development and demonstration support for breakthrough technologies and wider low-carbon infrastructure; market creation for products made via low carbon production processes; and promotion of resource efficiency and circular economy approaches. UKERC has published a number of reports highlighting where further action is needed, as detailed in Q4.
• Our research shows widespread low carbon ambition in local authorities but significant challenges in converting this to action. To change this, government could establish a new policy mandate for net zero carbon localities, institutionalise local net zero carbon planning and implementation through a new statutory power and devolved resources, and invest in local authority net zero teams. Q5 reviews a range of evidence on the role of local government.

• We welcome that a target of 600,000 heat pumps is included in the plan as this provides some clear direction for industry. However this is purely a target and it requires a thorough policy and governance framework to both support deployment and protect consumers.
• Despite the clear case for district heating, it is overlooked in the plan, and there is a lack of focus on energy efficiency despite the expected centrality of both of these technologies.

UKERC have submitted a reponse to the BEIS call for evidence on the future for small-scale low-carbon generation. This consultation sought to identify the role that small-scale low-carbon generation can play in the UK shift to clean growth by further understanding: 

• The challenges and opportunities from small-scale low-carbon generation in contributing to government’s objectives for clean, secure, affordable and flexible power; and
• The role for government and the private sector in overcoming these challenges and realising these opportunities.

In our submission we responded to the individual points raised in the call, drawing on two streams of work undertaken as part of the UKERC research programme. The first stream concerns community energy, drawing primarily on data from the UKERC Financing Community Energy project. This project has collected and analysed data from a number of sources:

• Quantitative data gathered as part of a UK-wide survey of community energy finance and business models. This dataset covers 145 community energy projects run by 48 different community energy organisations.
• Qualitative data on community energy organisations’ suggestions for changes in public policy and industry practice, and their plans for the future, gathered as part of the same UK-wide survey.
• Further qualitative data on community energy organisations’ views on pathways to future decentralised energy business models, gathered at workshops held as part of the Manchester Mayor’s Green Summit process, and the Community Energy England annual conference 2018.
• A wide range of other data and literature, including access to the dataset collected for Community Energy England’s 2017 State of the Sector Survey, covering 220 community energy organisations in England, Wales and Northern Ireland.

The second stream draws on a number of recent UKERC publications on electricity systems and networks :

• Developing low carbon networks for a low-carbon future
• Security of electricity supply in a low-carbon Britain
• The Costs and Impacts of Intermittency
• Delivering a highly distributed electricity system: Technical, regulatory and policy challenges. 

The development of a comprehensive industrial strategy for the UK is long overdue. The strategy is an opportunity to bring much needed coherence to economic and industrial policy, and to ensure that it works in tandem with the governments other policies and plans. It is particularly important that the strategy underpins the UKs transition towards a cleaner, low carbon economy. This will only be achieved if it is fully compatible with the Climate Change Act, and is integrated with the forthcoming Emissions Reduction Plan.

The Green Paper includes a welcome confirmation of the governments commitment to reducing greenhouse emissions to meet statutory targets, and to do so whilst meeting other important energy policy goals. Unlike previous statements of energy policy, we are pleased to see that the Green Paper adds a fourth policy goal alongside the familiar trilemmaof emissions r

This evidence is a joint submission by the UCL Institute for Sustainable Resources (ISR) and UKERC. These two institutions have worked together closely in the past, including on a report commissioned by the Global CCS Institute, on The role of CCS in meeting climate policy targets.

We are submitting evidence because we believe CCUS is likely to have a critical role as part of an overall decarbonisation strategy for the UK – and, perhaps more importantly, for the world. We are keen to take part in the debate as to how this can be achieved;

Executive summary

• Current modelling evidence suggests that meeting carbon reduction targets will be at best significantly more expensive, and at worst impossible, without CCUS.
   
• This is primarily due to its offer of emissions reductions in industrial sectors, and of negative emissions with biomass, rather than as a power sector technology per se.
   
• Attempting to pre-define a cost-reduction trajectory for CCUS in advance is difficult and uncertain.
   
• Rather, the government should establish a maximum subsidy level at which it would be prepared to contribute to funding CCUS, and commit to fund projects should they reach this level or go below it.
   
• It should then introduce competitive mechanisms to assist discovery of the lowest cost, similar to the Contract for Difference (CfD) auctions.
   
• It also needs to support the whole innovation chain, coordinating diverse actors across industry and power sectors, CO2 transmission and storage; supporting research, development and demonstration efforts of shared benefit; taking over whole chain risk; identifying synergies between industrial sectors.
   
• Although CCUS currently appears to be critical to industry decarbonisation, there are other potential options which may compete with or indeed complement CCUS in the longer term. A bottom-up, granular approach to decarbonisation challenges and opportunities within specific UK industry clusters will yield greater long-term benefits than a single-technology focus on CCUS alone.

We welcome the idea of offering more policy support to SMEs to enable the uptake of energy efficiency opportunities, to the benefit of their enterprises, the economy as a whole and the environment. Researchers have previously argued that there is not enough policy focus on SMEs (Banks et al, 2012, Hampton and Fawcett, 2017) and this consultation was valuable as part of a wider process of policy development.

This response covers general issues about design of policy for energy efficiency improvement in SMEs, and offers specific evidence on Option 2: a business energy efficiency obligation.

We welcome the opportunity to comment on the findings of the Cost of Energy Review, conducted by Professor Dieter Helm. In our response, we address most of the questions set out in the Call for Evidence from BEIS. Before turning to these specific questions, we have three general observations about the Review and the Call for Evidence.

First, whilst the review title focuses on the cost of energy, this is misleading. The terms of reference and the Review report make it clear that the main focus is electricity rather than energy in general.

This distinction is important since the data shows significant differences in the position of UK electricity and gas costs when compared to costs in other countries. There are also differences between relative costs for households and relative costs for business energy consumers. UK electricity prices are higher up the European league table than prices for gas. Electricity prices for energy intensive industries in the UK are particularly high.

Our second comment is that there are important distinctions between prices, costs and bills. Whilst much of the debate focuses on prices, the costs of energy for consumers also depends on their energy consumption. Therefore, it is also important to consider energy efficiency of buildings, appliances and industrial processes since these are a key determinant of costs.

Our third comment is that costs need to be considered for the electricity system as a whole. Whilst the separate questions in the Call for Evidence about generation, networks and retail supply are understandable, costs to consumers partly depend on interactions between these components of the electricity system. This compartmentalised approach to the evidence base could mean that some of these systemic interactions are missed.

We welcome the re-assertion of key policy objectives and the commitment to a whole system approach described in the strategy. In our response we highlight a number of key areas that need to be addressed including the need for geographical specificity, and a hierarchy of objectives along with the introduction of low and stable prices as one of these objectives.

UKERCs response provides commentary and analysis on many of the wide range of topics encompassed in the consultation. This includes the overall vision and objectives, case for change, the evaluation criteria defined by BEIS, locational pricing and local markets, lessons from other countries, changes to wholesale markets and incentives for low carbon generation, flexibility and capacity.

Our response provides detailed and evidence-based analysis on each of these complex topics, drawing on UKERC research and wider outputs. We highlight some of the complex trade-offs involved and argue for a cautious and gradualist approach that builds on the progress already made in some areas.

This document sets out a response of the UK Energy Research Centre (UKERC) to the Department of Energy and Climate Changes (DECC) consultation Electricity Demand Reduction.

In our response to the consultation on electricity market reform (EMR) we noted the potential importance of demand reduction and demand side response in achieving the Governments goals for the electricity sector of security, emissions reduction and reasonable cost.

All our responses are based on evidence from research by UK academic researchers independent of commercial or other vested interest. One particular focus of the response is on the option of premium payments (otherwise known as energy saving feed-in tariffs). UKERC supported research (Eyre, 2013) is the first peer reviewed academic literature on this topic in the world. We believe that an approach along these linesis consistent with addressing a market bias against energy saving that would otherwise be introduced by EMR proposals in their current form. We begin the response with four key concerns about the evidence base used in the consultation document and its supporting literature. We then respond to some specific questions identified in the consultation document itself.

The UK Government has been seeking views on bringing forward the end to the sale of new petrol, diesel and hybrid cars and vans from 2040 to 2035, or earlier if a faster transition appears feasible. In this joint UKERC/CREDS consultation response we provide views on the following aspects:

• the phase out date,
• the definition of what should be phased out,
• barriers to achieving the above proposals,
• the impact of these ambitions on different sectors of industry and society, and
• what measures are required by government and others to achieve the earlier phase out date.

A phase out date of 2035 or earlier is sensible yet it might not be enough. Our research, recently published in the journal Energy Policy, has found that neither existing transport policies nor the pledge to bring forward the phase out date for the sale of new fossil fuel vehicles by 2035 or 2040 are sufficient to hit carbon reduction targets, or make the early gains needed to stay within a Paris compliant carbon budget for cars and vans.

Our research has shown that deeper and earlier reductions in carbon emissions and local air pollution would be achieved by a more ambitious, but largely non-disruptive change to a 2030 phase out that includes all fossil fuel vehicles. This would include all vehicles with an internal combustion engine, whether self-charging or not. However, only the earlier phase outs combined with lower demand for mobility and a clear and phased market transformation approach aimed at phasing out the highest-emitting vehicleswould make significant contributions to an emissions pathway that is both Paris compliant and meets legislated carbon budgets and urban air quality limits.

The proposed policy will involve high levels of coordination, intention and buy-in by policy makers, business and wider civil society. By far the biggest barrier to change will be the incumbent industries the original equipment manufacturers (OEMs). They have a well-known track record of pushing back against EU vehicle regulations on the grounds of cost. In the case of electric powertrains, this push back is evident, with added resistance on the base of restricted supply chains and time to alter production processes. We suggest this is all the more reason to publish and implement a market transformation strategy now so that early wins which do not rely on supply chains or large transformations to the production line can mitigate against any later genuine supply-side constraints. Such a clear policy steer from the UK government is needed in order to ensure that UK consumers have more choice of cars than they may otherwise get if the OEMs restrict their sales of the most efficient vehicles into the UK market once out of the EU regulatory regime.

UKERC research into various phase-out policies has looked at how disruptive they would be for key stakeholders of the transport-energy system, and how much coordination would be needed to achieve the policy goals. This research has shown that in the Road-to-Zero ICE phase out by 2040 the main actors of the road transport and energy system are unlikely to undergo disruptive change. This is due to the relatively slow and limited evolution of the fleet towards unconventional low carbon fuels, the continuation of fuel duty revenue streams well into the 2040s and little additional reductions in energy demand and air pollutant emissions.

However, in the earlier (2030) and stricter (in what constitutes an ultra-low carbon vehicle) phase-outs we can expect some disruption for technology providers, industry and business in particular vehicle manufacturers, global production networks, the maintenance and repair sector as well as the oil and gas industry. There will also be localised impacts (some potentially disruptive) on electricity distribution networks and companies, even with smart charging.

Ending the sale of new petrol, diesel and hybrid cars and vans earlier, coupled with the electrification of road transport should form a key part of long term decarbonisation policy, but it is not a panacea. First, an earlier phase out date of 2030 implies we have 10 years to plan for and implement a transition away from fossil-fuel ICE cars and vans. As we discussed in our response, our research suggests that this is achievable without significant disruption to the transport-energy system, but it needs to be linked to accelerated investment in charging networks, battery development and deployment, increased market availability of zero-emission vehicles, and equivalent-value support by the Government to level the playing field with the incumbents. Second, our research has shown multiple times that further and earlier policy measures that impact the transport-energy system are needed, including a clear and phased market transformation approach that targets high-emitting vehicles, access bans in urban areas, and dynamic road pricing that could fund an order of magnitude increase in investment in sustainable transport modes.

We support bringing the phase-outdate forward and urge it to be earlier than 2035 and include phasing out any non-zero tailpipe vehicles using a market transformation approach. We strongly believe Government has a crucial role to play in leading the way to decarbonise transport, going well beyond the proposed policy change of bringing forward the end to the sale of new petrol, diesel and hybrid cars and vans from 2040 to 2035 or earlier.

There is increasing scientific evidence that natural systems are now at a level of stress globally that could have profound negative effects on human societies worldwide. In order to avoid these effects, one, or a number of technological transitions will need to take place through transforming processes of eco-innovation, which have complex political, institutional and cultural, in addition to technological and economic, dimensions. Measurement systems need to be devised that can assess to what extent eco-innovation is taking place. Environmental and eco-innovation have already led in a number of European countries to the establishment of substantial eco-industries, but, because of the general absence of environmental considerations in markets, these industries are very largely the result of environmental public policies, the nature and effectiveness of which have now been assessed through a number of reviews and case studies. The paper concludes that such policies will need to become much more stringent if eco-innovation is to drive an adequately far-reaching technological transition to resolve pressing environmental challenges. Crucial in the political economy of this change will be that eco-industries, supported by public opinion, are able to counter the resistance of established industries which will lose out from the transition, in a reformed global context where international treaties and co-operation prevent the relocation of environmentally destructive industries and encourage their transformation.

The UK Energy Research Centre welcomes this opportunity to provide input to the Stern Review on the Economics of Climate Change. 

The Centre was established in 2004 following a recommendation from the 2002 review of energy initiated by Sir David King, the UK Government’s Chief Scientific Advisor. It is funded by three research councils: the Engineering and Physical Sciences Research Council (EPSRC), the Natural Environment Research Council (NERC) and the Economic and Social Research Council (ESRC). We take a co-ordinated and collaborative approach to national and international energy research, and through our own interdisciplinary research activities, we intend to provide the knowledge needed to work towards a sustainable energy system and realise UK energy policy goals.

We are a distributed Centre operated by a consortium of eight universities and research institutions. Our work is relevant to items 1 and 4 of the Review Terms of Reference, i.e.

• The implications for energy demand and emissions of the prospects for economic growth over the coming decades, including the composition and energy intensity of growth in developed and developing countries; and
• The impact and effectiveness of national and international policies and arrangements in reducing net emissions in a cost-effective way and promoting a dynamic, equitable and sustainable global economy, including distributional effects and impacts on incentives for investment in cleaner technologies

Four of our research themes are undertaking research relevant to the Review. These are:

• Energy Systems and Modelling, operated by the Policy Studies Institute
• Demand Reduction, operated by the Environmental Change Institute, Oxford University
• Energy Infrastructure and supply, operated by the University of Manchester and Warwick Business School
• Future Sources of Energy, operated by the University of Edinburgh

This response is largely based on research carried out within the UKERC project: The Geopolitical Economy of Global Gas Security and Governance: Implications for the UK. It also draws on UKERC’s energy system modeling research which has explored the changes that are necessary to meet the UK’s climate change targets.

The gas and electricity sectors feature many different actors that interact in different ways, through commercial arrangements and physical transfers of energy. The activities of the larger actors – generators, suppliers, gas shippers, and network owners and operators – are regulated through various licences.

There is then a raft of standards and codes that govern the interfaces between the actors and many of the characteristics of equipment that is connected to the networks. Most of these documents were established when the gas and electricity sectors were first liberalised in the late 1980s and early 1990s. Although a number have seen various revisions since then, many industry observers have argued that they are out of step with technological and market developments and difficult to change.

This document contains the UKERC response to the 2019 consulation by BEIS/Ofgem about how and why the codes might be revised.

It was submitted to in response to the Welsh Government call for evidence to inform the development of Wales decarbonisation pathway to Net Zero, whilst also providing an initial step towards potentially developing a Just Transition Framework for Wales.

The west of Shetland region is physically a very different environment to the Gulf of Mexico, so environmental impact of a deep water spill in this area would be different, in many aspects.

A regulatory system could be enacted to compel companies to develop a shareddeep-water rapid response system to cap wells, and the levels of insurance cover companies are obliged to have could be increased.

The UKs regulatory system is robust but could be improved, though there is a limit to which increased regulation can be implemented and effective.

Scenarios which may reduce the need to exploit deepwater reserves during the transition to a low carbon economy are discussed. However, given our current reliance on oil and gas, such exploitation may be necessary.

Under free market regulations the contribution of deepwater reserves to security of supply may be limited, though there may be some economic benefits of exploitation

This response provides recommendations on the reform of the energy supply market, based on research on “energy retail market governance” undertaken within UKERC.

• Overall, we recommend that reform of the retail energy market should not be considered in independence from the work on ‘systems flexibility’, energy transitions, ‘whole systems’, network charging reform and wholesale market policy.
• We recommend that the evaluation of energy retail market success should explicitly include an assessment of its compatibility with a low-carbon transition. Specifically, the retail market should allow for long-term investment recovery in low-carbon solutions .
• We also provide an overview of approaches to organising default energy commodity supply in some US energy retail competition states.
• We suggest that Ofgem (and Government) consider improving the potential for intermediaries and assess the likely implications of resale of commodity energy by a wider range of eligible players, subject to customer protection requirements.

The RIIO (Revenue=Incentives+Innovation+Outputs) model, introduced in 2013, is designed to ensure that payments to companies running the gas and electricity transmission and distribution networks are fair to network users and permit the recovery of reasonable costs in developing, maintaining and operating the networks.

The network licensees allowed revenue is linked to their performance and should therefore offer them incentives for securing investment, driving innovation and delivering the service that customers expect. However, some commentators have suggested that the licensees have been making unjustified profits. With network charges making up around a quarter of the average household energy bill, it is anticipated that the new price control framework will be tougher and provide lower expected returns for networklicensees.

The RIIO-2 frameworkconsultation is welcome. Ofgems final view on price control allowances will be published by the end of 2020 with the new network price controls ('RIIO-2') due to be implemented in 2021.

In our submission we respondedto the individual points raised in the call. We also note the following:

We support the proposal to reduce the price control period from 8 to 5 years. The energy system is undergoing unprecedented change, not only with continued transformation of the generation background but also major changes to the way electricity is used, such as for transport and heating. However, the rate and precise locations of these changes is uncertain. A shorter price control period will provide the opportunity for incentives and cost recovery to be adapted to the changing circumstances.

Maintenance of acceptable levels of reliability while facilitating the energy system transformation at least cost requires substantial innovation in technologies, business processes and commercial arrangements. The development of new innovations and associated benefits to consumers often takes years to be realised, sometimes beyond a price control period in which network company shareholders would expect a return. We therefore support the proposal to retain dedicated innovation funding but encourage greater clarity on the scope of activities that can make use of such funding and on best practice in the generation and dissemination of evidence on proposed innovations.

We welcome moves to increase the accountability of the network companies and would urge Ofgem to concentrate on those measures that have a genuine and positive impact on the network companies activities in the context of the whole energy system. We note that thisis not restricted to the business plans submitted under RIIO-2 but extends to a whole raft of codes and interactions. These include the evolving responsibilities of the Electricity System Operator (ESO), the relationships between the ESO, the transmission owners and the Distribution Network Operators, and the processes for ensuring that the full set of codes, standards and market arrangements are coherent and fit for purpose. This is a challenging task that requires constant attention to the big picture and sufficient resources, commitment and expertise on the part of the network owners, system operators and Ofgem.

In applying tighter controls that avoid excessive returns to the network licensees owners, the upside and downside risks should be clearly assessed and incentives for managing risk placed on those parties best placed to do so.

Pathways that are consistent with legislated net zero targets are likely to see highly significant changes to demand for electricity. When these changes will start to take place and how quickly is uncertain, which leads to challenges when setting price controls. Key elements to circumnavigate this will be flexibility and scenario planning.

The need for network reinforcement can be reduced by the appropriate use of flexibility, e.g. in the timing of EV charging. However, the means by which different sources of flexibility might be encouraged and then utilised are still immature and it is not yet clear which will actors prove to be the most significant and efficient in providing services.

Flexibility can only go so far in helping meet power supply needs; at some point, network capacity often proves the most cost-effective means, especially when considering its reliability and lifetime, and the opportunities provided by asset replacement. The triggering of investment in network assets presents an opportunity not just to meet the immediate need or that forecast for the next few years, but to provide for the maximum transfer that can be envisaged throughout the path to net zero. This is likely to be cheapest for consumers over the longer term as the incremental cost of additional electrical capacity is small relative to the total cost of aproject, it avoids the need for repeated interventions, andit saves on the long-term cost of network losses.

Ofgem has noted in the consultation document that some form of scenario planning of investment is likely to be needed. A number of scenarios should be developed that encompass key uncertainties but are consistent across Britain in respect of the whole, multi-vector system, and associated assumptions.

There should be engagement with Local Authorities and other stakeholders to develop regional plans of future energy needs, such as a Local Area Energy Plan. This engagement is important as local, regional, or devolved administration policies as well as different geographies and starting points can drive different actions.

Innovation is a long-term process and uncertainty is inherent to it there is always the potential for unforeseen things to arise. What this means for the energy system is that:

1. Withinaportfolio of innovations, some will realise the intended benefits, but some will not.
2. Where benefits are realised for energy users, they will, in general, take time to accumulate.

Where there is uncertainty about the effect or cost of new practices or technologies on an energy system and its users who ultimately pay but also benefit from innovations that are adopted it is reasonable for those users to share the risk by sharing the cost of resolution of the uncertainties. However, arguments might be made that costs should be shared not by energy system users, i.e. its customers, but by taxpayers, e.g. through funding by UKRI.
A less than perfect set of arrangements for the sharing of costs between different parties should be accepted if that is what is necessary to support R&D capacity, address risks, and drive innovation. Moreover, the amount of network customers money that is being proposed in RIIO-ED2 to support innovation is modest compared with the network companies total expenditure and the benefits that will accrue to customers and society as a whole in the energy system transition.

Good governance and good practice on the part of network licensees is essential to ensure that customers money is used effectively. In particular, we agree with Ofgem that data transparency associated with network innovation projectsneeds to be much improved.

In order that the scope of Network Innovation Allowance (NIA) funding is not set too narrowly, we think it important to have a clear understanding of what a successful energy system transition involves. We include in our response a first draft of a definition and include recommendations for the threshold that projects must meet to be funded.

Summary: The greatest challenges faced by Distribution Network Operators (DNOs) in forming investment plans relate to the gathering and use of information with suitable levels of spatial and temporal detail. Access to smart meter data should help, but innovation will be required to turn data into useful information.

A final observation is that it is important for the UKs economy as a whole that the UK has the capacity to undertake research and development, to innovate, and to generate evidence in order to drive the commercial viability of ideas

The UKERC response to the ofgem consultation 'Getting more out of our electricity networks by reforming access and forward-looking charging arrangements'

The following submission is preceded by a tabled summary of the current state of energy research and development and deployment in the UK, technology by technology. This is used as the basis for commentary on the technology potential of:

• Wind
• Photovoltaics
• Hydrogen and fuel cells
• Marine renewables
• Bioenergy
• Groundsource heat pumps
• Microgeneration
• Intelligent grid management
• Energy storage Finally,

UKERC offers its views on the research funding landscape. Recommendations are highlighted in bold.

This document sets out a response of the UK Energy Research Centre (UKERC) to the Department of Energy and Climate Changes consultation Renewable Heat Incentive: Expanding the Non Domestic Scheme.

This document contains the responses of Prof Jim Skea on behalf of UKERC to: Consultation on the draft Climate Change Bill. The questions cover the main topics such Targets and Budgets, The Committee on Climate Change, Enabling powers, Reporting, and Other responses to the consultation.

The UK Energy Research Centre welcomes this opportunity to provide input to the HMT Carbon Floor Price Consultation. We have focused only on the questions where we believe we may have something to offer. The observations have benefited from discussions at an “Independent Experts Workshop on Electricity Market Reform” convened jointly by UKERC and the Imperial Collage Centre for Energy Policy and Technology on 31 January 2011.

The UK Energy Research Centre welcomes this opportunity to provide input to Government’s Energy Review. We have addressed each of the questions posed in the consultation document calling on all UKERC members for input.

• Carbon capture and storage (CCS) can be a critical CO2 reduction technology for the UK. CCS is now commencing the early pre-commercial demonstration stages worldwide, with the objective of widespread commercial deployment by 2020 - 2025.
• Capture ready design is a very important set of practical actions during the design and building of new power plant, which can be utilised at a later date, to enable the avoidance of locked-in high carbon emissions in future.
• BERR has already given Section 36 planning consent to Natural Gas Combined Cycle (NGCC) power plants including a condition that they are capture ready, but without a clear definition of this condition.
• The Kingsnorth plant is currently awaiting a decision on capture ready requirements for coal-fired power plants in the UK. This has become a focus for objectors.
• A wideand encompassing specification of capture ready is needed, to ensure feasible conversion to CCS, when it is required by regulation and/or economically justified.
• It is very unlikely that a CCS plant will operate in the UK until additional costs are covered by appropriate financial support.
• Many estimates exist of the support needed to avoid losses on demonstration plant, typically stated to be a total of 70-100 per ton CO2. Several approaches are suggested here to regulate or incentivise CCS.

The UK Energy Research Centre welcomes this opportunity to provide input to the Ofgem consultation Project Discovery: Options for delivering secure and sustainable energy supplies. The UKERC response addresses a number of the questions posed in the consultation document. The response has been prepared by Catherine Mitchell and Phil Baker from the University of Exeter and Robert Gross from ICEPT at Imperial College. It makes a number of high level and specific points but does not seek to be exhaustive. We refer the reader also to UKERCs submission to Ofgems previous consultation over Project Discovery, in which we make a number of observations about the various scenarios considered by Ofgem. These provide some important context for the comments provided below.

Substantive points are made on a chapter by chapter basis below, with higher level issues pulled out as app

The Chancellor has stated (writing in the Independent 21 April 2006) that “The environmental challenge must be moved to the centre of policy”. The UK has domestic targets for CO2 reduction of 20% by 2010, and 60% by 2050. In contrast to these aspirations, CO2 emissions have fallen by 15%, but are now increasing (DEFRA 2006). Private car fuel costs, with CO2 emissions, have barely changed since 1985 (85p then to 95p/litre now), and air travel is rising.

If the UK is serious about reducing CO2 emissions in the short or medium term, then it is clear that existing policies are either not working or are too slow to act.

Electricity generation comprises about one third of UK CO2 emissions, and so must be seriously considered as a target for large scale emission reductions. The benefits of this are large single-site reductions, compared to wind generation or to efficiency savings. To illustrate the size of this opportunity for CO2 emissions reduction the BP-Peterhead proposition, for 350MW low carbon electricity with CCS, can be calculated to avoid as much CO2 as all wind generation active in the UK during 2005

The question could be framed as: “Is now a good enough time to deploy one or several full-scale pilots in the UK?” A full analysis, published 2006, is contained in the House of Commons Science and Technology Committee Report 578i, and the Government reply 1036.

UKERC welcomes the Scottish Government's energy and climate policy ambition, and applaud the valuable lead it is taking on energy. This has the potential to bring economic and social advantages - for example, the development of low carbon industrial capability with export potential and jobs, and improved air quality with associated health benefits. However, it is also important to ensure that the scale and pace of the transition minimises the additional costs for consumers. This can be achieved by supporting technological innovaiton that further reduces the costs of low carbon technologies and by maximising investments in energy efficiency.

UKERC have submitted a reponse to the Scottish GovernmentFinance and Constitution Committee's call for evidence on the Financial Memorandum that accompanies the Climate Change Bill.

This bill was introduced in May 2018 andamends the Climate Change (Scotland) Act 2009 to make provision for setting targets for the reduction of greenhouse gases emissions and to make provision about advice, plans and reports in relation to those targets.

This inquiry is both welcome and timely. Whilst the Clean Growth Strategy emphasises the significant progress that has been made in reducing emissions, the Committee on Climate Change has identified a number of areas where policy needs to go further.

Innovation in a range of low carbon energy technologies and systems will be required to meet future carbon budgets and the 2050 target. Government policy has a vital role to play in supporting the development, demonstration and commercialisation of these technologies. Furthermore, policies to support innovation could also help to meet the wider economic objectives in the Industrial Strategy, by contributing to the development of new industries and jobs.

This submission draws on research and expertise from UKERC. The submission includes some introductory points in response to the committees questions on the Clean Growth Strategy, followed by some more specific responses to subsequent questions on government support for low carbon innovation.

Greenhouse gas (GHG) emissions can be allocated to a country in different ways, territorial-, production- and consumption-based emission reporting. There is a marked difference in end results depending on the chosen system. For example, the UK territorial-based emissions have shown a 19% reduction between 1990-2008. Conversley, consumption-based emissions show a 20% increase during the same period, which is driven by GHG embodied in imported products.

It is possible to develop a robust methodology for measuring GHG emissions on a consumption-based approach. In the past 10-years there have been multiple independent studies published on this subject that display consistent results. The methodology of choice is Environmentally Extended Multi-Region Input-Output (EE-MIRO) Analaysis. Whilst there are uncertainties relating to the large and often incoherent datasets, it is believed that standard error estimates can be used to provide confidence in the results.There is significant expertise in EE-MIRO in the UK.

Consumption-based emission inventories are not a silver-bullet for climate policy. Different emission inventories contain complementary information, and thus, consumption-, production-, and territorial-based emission inventories should be considered together.

That said, consumption-based emission modelling does have speciific advantages, in that:

1. It may reveal policy approaches specific to different products.
2. It enables the possibility of standard carbon accounting for organisations globally.

The main disadvantage to consumption-based emission modelling is that it requires additional accounting and analysis.

It is desirable to adopt emission reduction targets based on consumption, in addition to production, for three reasons:

1. It would incorporate options to address ‘weak carbon leakage’ (carbon embodied in imports).
2. It encourages reduction of emissions at least cost, even if the most cost effective option addresses non-territorial emissions.
3. Consumption-based emissions are increasing and as such are undermining UK domestic climate policy.

UKERC proposes three-steps the UK Government could pursue should they wish to move towards consumption-based emissionreporting:

1. The UK Government, in conjunction with UNFCCC and Eurostat, could establish standards for the harmonisation of consumption-based emission reporting methods to ensure robustness and consistency between country estimates.
2. The UK Government should commission a report to assess all the UK demand-side strategies contributing to emission reduction within and without of the UK.
3. The UK Government could assess the cost-effectiveness of demand-side strategies to understand whether they are revenue generating or a cost.

This document is a joint response from the UK Carbon Capture and Storage Community Network (UKCCSC) and the UK Energy Research Centre (UKERC) to the Select Committee inquiry on EPS. The UKCCSC is a collective of over 200 engineering, technological, natural, environmental, social and economic academic members, whose biannual meetings and other knowledge sharing events and activities are funded by a grant from the Research Councils UK Energy Programme. The UKERC carries out world-class research into sustainable future energy systems and is also funded by a grant from the Research Councils UK Energy Programme. The text has been discussed and drafted by a self-selected group of UKCCSC and UKERC academics and researchers, each contributing according to their own particular interests and expertise, and also submitted to the whole membership for further comments. The final version was then circulated for members to sign up to if they wished; it should be noted that signatories below are signing as individuals.

The UK Energy Research Centre (UKERC) has provided research and analysis across the whole energy system since 2004, with funding provided by the Research Councils through a succession of five year phases. Research related to low carbon heat became a significant focus during Phase 3 (2014 2019) and the current Phase 4 includes a research theme devoted to decarbonisation of heating and cooling, with several of our other themes providing relevant insights. Our whole systems research programme addresses the challenges and opportunities presented by the transition to a net zero energy system and economy.

In this submission we address specific consultation questions where UKERC evidence and analysis provides us with relevant insights. In addition there are a number of high level observations that we provide in these introductory remarks.

Overall, we are concerned that the measures outlined in the consultation need to be set within a coherent and ambitious package of policies that work together to drive the UKs transformation to sustainable heating at a rate commensurate with the goal of net-zero by 2050. While we appreciate there are some uncertainties over the future role of the gas grid and the potential for hydrogen for heating, immediate progress in heat system decarbonisation is clearly required as part of this multi-decadal transformation. As the consultation notes, heat pumps offer a low regrets option in some applications and it is widely acknowledged that the UK has a small supplier base and very low level of heat pump deployment compared to many countries. Increasing consumer and installer familiarity, and growing the skills base and supply chain all feature strongly in the process of learning by doing that reduces heat pump costs. Ifheat pump deployment were to proceed linearly to 2050 in line with some scenarios for deployment, annual installations would need to increase by an order of magnitude. Whilst welcome, the current proposals are not sufficient to deliver a large scale market for heat pumps. Ambition and clarity of purpose are essential if heat system decarbonisation is to succeed. We also stress the importance of providing support to support the development of large low carbon heating systems, including systems attached to heat networks. We appreciate that the provisions laid out in the consultation pertain only to specific schemes and note the observations made in the consultation about support for heat networks.

Alongside the required policy changes necessary to support specific heating technologies, wider governance changes will be needed to drive the UK transformation to low carbon heating.Whilst regulation and other forms of financial support for building efficiency improvement are noted in the consultation, we note that it is likely to be important to use sticks as well as carrots if the highest carbon heating systems are to be removed and building efficiency increased. However, it will also be important to consider ownership and regulation of heat networks, the role of local authorities and opportunities for innovation that may be unlocked through regulatory change such as encouraging electricity suppliers to offer smart heating tariffs or enabling community ownership of heat distribution schemes.

While we appreciate these issues are beyond the scope of the current consultation, it is important that these considerations inform policy choices made now.

Increased CO2 emissions from economic activity are leading to climate warming and acidification of the upper ocean. Mitigating these effects raise unprecedented challenges in engineering the habitability of our planet. The potential advantages of CCS for the UK are outlined. Future sources of oil, coal, and especially the vulnerability of gas, are discussed. The benefits of deep geological CCS in EOR, depleted gasfields, and aquifers are outlined. Particular highlights are placed on problems of CO2 retention in the deep subsurface for required timescales. Government issues of: Value, Ownership, Monitoring, and Regulation or Licensing are critical inhibitors to any large–scale development of CCS. Opportunities for some middle–scale CCS onshore on the UK are outlined.

We support the mission-oriented approach of the Industrial Strategy and the inclusion of a specific grand challenge on clean growth. Delivering this challenge will require a holistic approach from government that includes the following objectives (Busch et al., 2018)

• innovation in low carbon technologies, business models and practices;
• managing energy demand; and
• enabling systemic change.

The first of these objectives points to the need for industrial innovation to go beyond the purely technical and to encompass new ways of doing business and capturing value. The second includes the need for greater industrial energy efficiency, but goes beyond this to include the much larger opportunities that could be realised by changing the demand for the goods and services produced by industry (Scott et al., 2019). The third necessitates an economy-wide approach to decarbonisation in the UK to maximise synergies between sectors (e.g. increased use by industry of decarbonised electricity), while ensuring that action on climate change does not lead to carbon leakage outside the UK.

Download the full submission to read the response to the specific questions posed by the consultation.

Scope of the Call for Evidence and objectives in respect of flexibility

We welcome the attention being paid by Ofgem and BEIS to the need for flexibility in Britain’s electricity system. In our view the main reason to support electricity system flexibility is that it can help minimise the costs of meeting the UK’s statutory climate targets whilst ensuring that system security is not compromised. The electricity system’s ability to adapt to changing demand in timescales of years down to minutes and varying availability of power from different resources will be extremely important to meeting these policy goals. Furthermore, action is needed so that those consumers that are best able to adapt their patterns of use of electricity have sufficient incentives and rewards for doing so. One manifestation of the main goal in accommodating future generation and demand is an objective to maximise the utilisation (across each year of operation) of electricity system assets, i.e. generators, network components and storage facilities.

Whilst the title of the call for evidence focuses on ‘a smart, flexible energy system’, most of the raised relate to the electricity system. We have therefore focused most of our responses on electricity rather than the energy system as a whole. Our responses are selective. We have only answered those questions where we can offer relevant evidence, based on our research and expertise.

• Energy Storage
• Flexible Demand
• Pricing and tariffs
• Procurement of System Services
• Interactions between transmission and distribution
• Industry Leadership
• Roles in planning and operating the future power system
• Evidence and access to data

Scope of the Call for Evidence and objectives in respect of flexibility

We welcome the attention being paid by Ofgem and BEIS to the need for flexibility in Britain’s electricity system. In our view the main reason to support electricity system flexibility is that it can help minimise the costs of meeting the UK’s statutory climate targets whilst ensuring that system security is not compromised. The electricity system’s ability to adapt to changing demand in timescales of years down to minutes and varying availability of power from different resources will be extremely important to meeting these policy goals. Furthermore, action is needed so that those consumers that are best able to adapt their patterns of use of electricity have sufficient incentives and rewards for doing so. One manifestation of the main goal in accommodating future generation and demandis an objective to maximise the utilisation (across each year of operation) of electricity system assets, i.e. generators, network components and storage facilities.

Whilst the title of the call for evidence focuses on ‘a smart, flexible energy system’, most of the raised relate to the electricity system. We have therefore focused most of our responses on electricity rather than the energy system as a whole. Our responses are selective. We have only answered those questions where we can offer relevant evidence, based on our research and expertise.

This document only answers questions 28 -32 inclusive. Another document is available http://ukerc.rl.ac.uk/UCAT/PUBLICATIONS/Response_to_Ofgem-BEIS_call_for_evidence-smart_flexible_energy_system.pdf which gives answers to other questions in the consultation.

There is global consensus that carbon capture usage and storage (CCUS) will be essential to successfully tackling climate change and meeting the ambitions of the Paris Agreement.

The Department for Business, Energy and Industrial Strategy (BEIS) recently consulted on the potential business models for carbon capture, usage and storage (CCUS). This was seeking to understand how a core set of CCUS specific risks, which have been presented as an intractable problem for previous projects may be mitigated through the development of business models.

UKERC provided a response to the recent BEIS consultation on CCUS

• Carbon capture and storage (CCS) can be a critical CO2 reduction technology for the UK. CCS is now commencing the early pre-commercial demonstration stages worldwide, with the objective of widespread commercial deployment by 2020 - 2025.
• It is very unlikely that a CCS plant will operate in the UK until additional costs are covered by appropriate financial support.
• Many estimates exist of the support needed to avoid losses on demonstration plant, typically stated to be a total of 70-100 per ton CO2. Several approaches are suggested here to regulate or incentivise CCS.
• At the nascent stage of CCS development and deployment, there is a role for Government to provide public education so as to enable citizens directly affected by CCS to understand and make decision about the technology.
• Lessons learned in UK and EU CCS demonstration projects should be shared globally.
• A wide and encompassing specification of capture ready is needed, to ensure feasible conversion to CCS, when it is required by regulation and/or economically justified.
• Capture ready design is a very important set of practical actions during the design and building of new power plant or other combustion plant, which can be utilised to ensure that CCS retrofit is possible and, hence, avoid locked-in high carbon emissions from fossil fuel use in future.
• BERR has already given Section 36 planning consent to Natural Gas Combined Cycle (NGCC) power plants including a condition that they are capture ready, but without a clear definition of this condition.
• There is potential for strategic planning of the transport and storage system to provide significant benefits.

The UK Energy Research Centre welcomes this opportunity to provide input to the BERR Consultation on the UK Renewable Energy Strategy. We have addressed a number of the questions posed in the consultation document calling on all UKERC members for input.

The UK Energy Research Centre welcomes this opportunity to provide input to the to the DECC Consultation on the proposed RHI financial support scheme. The UKERC response addresses a number of the questions posed in the consultation document.

• The level of integration between the RHI and the Household Energy Management Strategy is weak, despite strong parallels between the policies. In particular the RHI proposal does not take into account wider energy policy goals.
• UKERC is concerned that the approach taken in the proposed RHI scheme assumes that the appropriate policy instrument is a kWh based subsidy rather than exploring a wider range options such as loans and grants.
• There is no clearly defined mechanism for funding the RHI in the proposal. UKERC suggests that some type of levy system is preferable to individual suppliers bearing the cost of theRHI.
• It should be clearer how the fuel poor will benefit from the RHI; will lowincome families be able to obtain renewable heat equipment for free? If not it is difficult to see how they will benefit, given the high capital equipment costs.
• UKERC proposes that there should be a process for assessing and including emerging technologies that fall outside the list of technologies identified in the RHI proposal.
• Trigeneration and other innovative renewable cooling systems should be covered by the RHI as this would help to implement energy saving technologies and reduce CO2 emissions.
• Heat metering should be applied for medium-scale and large-scale systems; the use of heat meters is well-established in other EU countries.
• The benefit of using heat pumps above 350 kW is questionable, especially if cooling will not be supported by the RHI, as normally high capacity heat pumps operate in both cooling and heating regimes.
• There are issues with the RHI tariff structure in relation to energy efficiency measures, these include: confusion over minimum insulation; discrepancies in household occupancy; and problems with RdSAP in EDCs.

This response is a concise summary of the UKERC view on the framework for the delivery of clean coal in the UK. It does not refer to specific questions within the consultation.

The analysis in the UKERC Energy 2050 report broadly agrees with that presented in the Heat and Energy Saving Strategy. There is no correct way to achieve the carbon emission reductions from buildings but it is clear that both demand reduction and the electrification of heat technologies are key elements.

There is evidence that appropriate feedback of energy information to consumers does lead to better control of, and therefore, lower energy use this indicates a need for a rapid roll out of smart meters and a rapid end to estimated billing.

UKERC suggests that the potential for the economy in terms of long-term, sustainable job creation is seriously underplayed in this consultation exercise. The current economic crisis presents an opportunity for helping to shape the economic recovery through investment in improving the sustainability of heat supply, especially in buildings.

UKERC endorses the principles underlying the proposed package of reforms and supports the broad direction and aspirations of the EMR. However we believe that the package is unnecessarily complex and that some important issues, such as governance arrangements and price transparency in wholesale markets have received insufficient attention, or are absent.

A system of feed-in tariffs differentiated by and tailored to specific technologies, coupled with a capacity mechanism, would be sufficient to deliver the twin goals of promoting investment in low carbon generation and ensuring security of supply.

The feed-in tariff (FiT) is the key element of the EMR package. However, a one size fits all approach to FiT design is not appropriate. Low carbon technologies are diverse in terms of technological maturity, cost structure and risk profiles and different technologies may merit different approaches.

We regret that fixed FiTs have been excluded as they are the lowest risk option and they have a proven track record globally in encouraging investment in renewables. Contracts for differences (CfDs) may be appropriate for nuclear, while biomass generation and CCS could be supported by premium FiTs. The Emission Performance Standard (EPS) appears to be the most dispensable part of the EMR packages since other measures, such as carbon price support, will effectively inhibit investment in new unabated coal in the UK.

A capacity mechanism will be needed to give assurance that sufficient capacity will be installed to guarantee security of supply though it may be some time before the mechanism is needed.

We would recommend approaching auctions for FiTs with caution as, for many technologies, the pre-conditions for a successfulauction are not in place. These include the need for established technologies, a vibrant, diversified and competitive market, and a well developed supply chain. Administered prices or beauty contest type tenders could be used initially with a move to auctioning at a later date.

The key risk associated with the proposed package is that its complexity and uncertainty surrounding its implementation could lead to an investment hiatus threatening the attainment of both low carbon generation and security of supply goals.

This document sets out the response of the UK Energy Research Centre (UKERC) to DECCs consultation document on the Green Deal and the Energy Company Obligation. It is based on the research and experience of the contributing UKERC authors. In line with UKERCs goals, the objective is to bring evidence to bear on the proposals, rather than to support or oppose any specific policy.

Our working assumption is that the proposals form a key part of the Governments plans to deliver significant carbon savings from the UK building stock, to improve affordable warmth, to promote sustainable jobs in the UK and to do so at a reasonable cost to Government and consumers. Our comments attempt to analyse the effectiveness with which the proposals might do this. This introduction is followed by a summary of the key points, drawing together our analysis of the key strengths and weaknesses of the proposals. This followed by more detailed sections on:

• The Green Deal Approach
• Green Deal and ECO interaction
• Links to other policies
• Building Energy Assessment
• Measures, products and systems
• Green Deal Providers
• The Golden Rule
• Installation and Delivery
• Local Government and Communities
• Targets
• Administration,
• Other issues

This document sets out a response of the UK Energy Research Centre (UKERC) to the Department of Energy and Climate Change's consultation 'Renewable Heat Incentive: Proposals for a Domestic Scheme'.

This submission focuses on the potential impact of shale gas production on the global gas industry. Firstly, it suggests that the rapid development of shale gas production in the United States (US) has had a significant impact as it has resulted in the loss of a major market for LNG exporters. Events in Japan post-Fukushima are also an important factor in explaining the current situation. Secondly, the very low price for gas in the US, as a result of shale gas production, is putting pressure on gas price formation, both in Europe in relation to long-term oil-indexed pipeline imports and in the Asia-Pacific region in relation to long-term oil-indexed LNG imports. However, the high-price of oil is also a key factor in the current debate over the future pricing of natural gas. To conclude, the potential for significant shale gas production is an important factor in the current uncertainty over the future of the global gas industry, but it is not the only factor at play and any assessment of shale gas must be made in the wider context of multiple uncertainties.

This response addresses the first two questions of the call for evidence on the impact of shale gas on energy markets: firstly what estimates exist for the amount of shale gas in place in the UK, Europe, and the rest of the world, and what proportion is recoverable; and secondly why estimates for shale gas are so changeable.

UKERC recently conducted a comprehensive review of 62 studies that provide original estimates of regional and global shale gas resources [1

This document sets out the response of the UK Energy Research Centre (UKERC) to the Energy and Climate Change Committee’s Inquiry on Heat.

We would always encourage a “whole systems approach” to energy, certainly including heat with electricity, and ideally transport as well. Such an approach is more likely to encourage consistency between sectors, avoiding perverse incentives but also it is more likely to lead to the discovery of optimal solutions.

In the call for evidence, the Committee makes the comment that there is disagreement concerning the un-used heat from thermal electricity generation with some arguing that this should be used through combined heat and power (CHP) systems, while others suggest optimal energy efficiency occurs through centralised electricity generation plus heat pumps at the local level.

Heat exhausted from large thermal generators has very little use as most of the useful energy has been extracted to produce electricity. A typical temperature of the “exhausted heat” is around 30°C which is too low for district heating systems. This requires heat to be extracted at a higher temperature, circa 90°C, but this does result in lower electricity output from the thermal generators. Typically, 7 units of heat generated by a CHP unit will result in the reduction of 1 unit of electricity output. This contrasts with air source heat pumps where the ratio is 1 unit of electricity to 3 units of heat (typically).

Hence CHP is much more energy efficient but of course district heating system infrastructure is required. Opponents of CHP systems cite this as the major stumbling block but they ignore the electricity infrastructure cost, mainly distribution but also transmission and generation that would be required for heat pumps. They also ignore the customer based cost of the heat pumps, upgrades to home heating systems, etc. Once these costs are all included the economics for CHP are much improved.

A further point to make is that heat provided by CHP will have the lowest carbon emissions compared to other fossil fuel-based heat generation. For example, using typical values, a condensing gas boiler emits circa 210 g/kWht 1 and an electric heat pump circa 120g/kWht 2 . However, for a CHP it is circa 60g/kWht 3

Thus our overall opinion is that CHP (electricity and heat production) and district heating (which encompasses all forms of heat production as well as heat network and other associated infrastructure) do not receive the attention they deserve.

To meet the EU 15% renewable energy target will be a significant challenge for the UK. It is important to understand that reductions in the UKs total energy demand will produce proportional reductions in the renewable contribution required. Although self-evident, this simple fact is often overlooked. Indeed the UK has to date failed to achieve any reductions in energy use, in fact the reverse is true: energy consumption in the key sectors of electricity and energy for transport continues to rise steadily.

In addition to reducing the demand for energy, there will need to be a massive increase in the contribution of renewables to transport fuel (predominately biofuels), heat and electricity. This submission concentrates on renewable electricity because UKERC has core competency this area. In Table 1, below, UKERC presents an illustrative scenario for the contribution of renew

• There are extremely ambitious technology deployment rates (for example for CCGT, heat pumps and electric vehicles) within some scenarios that could be challenging in reality and should therefore be subjected to stress testing.
• In addition to the need for appropriate investment signals, analysis should address the incorporation of a very active demand side and if the current arrangements can handle large amounts of intermittent generation supplying an elastic demand side.
• UKERC recommends that Ofgem consider a stress test that examines the loss of Norwegian gas supplies.

• Without the adoption of a more holistic approach that addresses BETTA structural reform and network regulation, it is difficult to see how a satisfactory resolution of the transmission access issue can be achieved.
• It is proposed that more strategic and unified development of the onshore and offshore network together with the provision of interconnection would be encouraged through common or at least zonal ownership of offshore transmission assets, while cost-effectiveness and the efficient delivery of assets could be achieved through tendering and outsourcing construction.
• Modern distribution networks are not typically designed to accommodate generation; a number of technical and operational challenges will need to be addressed in order for the connection of significant amounts of distributed generation on these networks.
• The consequences of intermittency or variability of input will need to be managed by a combination of retaining conventional plant and developing demand response. Additionally, interconnection with adjacent transmission systems and improved forecasting of wind resource and maintaining geographic diversity of wind generation could also reduce the impacts of intermittency.
• The role of smart grids will be to enhance the capacity and utilisation of the electricity grid (both transmission and distribution) by means other than investing in traditional transmission assets and, via the deployment of smart metering, massively increase the contribution of the demand side to system security and the decarbonisation of the heat and transport sectors.
• UKERC is concerned that a major opportunity will be missed unless there is a timely change to a regulatory regime that encourages objective and costefficient choices between investment and smart grid solutions.

The UK Energy Research Centre welcomes this opportunity to provide input to the Scottish Governments Consultation on proposals for a Scottish Climate Change Bill. We have addressed a number of the questions posed in the consultation document calling on all UKERC members for input.

We welcome the Welsh Government’s interest in locally owned renewable energy. Our response draws on a range of research undertaken by the Heat and the City research group at the University of Edinburgh, including a UK-wide study of local authorities and energy; and on the Financing Community Energy research project being led by Tyndall Manchester. 

In our response we made the following general comments, before responding to individual points raised in the call:

• We suggest that greater attention should be paid to city/town/settlement scale infrastructure for a low carbon energy system, including area based upgrading of the built environment and low carbon heating infrastructure. Heat and energy efficiency for a low energy building stock are crucial to meeting Welsh and UK Government legally binding targets for carbon abatement.
•  At national scale, Wales has opportunities for sharing risk, costs and benefits of energy developments – i.e. the direct benefit to the citizens of Wales through public ownership and the aggregate costs across society of decarbonisation.
• Local Authority planning and ownership could be considered further as key components to securing greater local control and accountability, and achieving Welsh Government objectives. Our research indicates that further developing specific roles, powers, resources and responsibilities of local institutional actors in energy planning and ownership, especially Local Authorities would also add value to Welsh society and economy.

UKERC response to he Welsh Governments consultation on the potential actions required to reduce emissions to 2030 are welcome, particularly in the international context of decarbonising the economy and the challenges posed by climate change.

1. Energy is a large component of GDP, and fundamental change in our energy sector is required by the challenge of decarbonisation. This makes energy policy over the next decade vital to long term UK economic performance and productivity.
2. A key challenge for energy policy is to move towards a more coherent framework to incentivise emissions reductions across the economy. A stronger whole systems perspective should inform policy choices and the allocation of policy support or subsidies.
3. More policy attention will be needed in the decade ahead on the challenges of decarbonising energy for heat and transport.
4. Energy policy needs to support UK capability in deploying a portfolio of the key low carbon energy technologies that offer most potential value to UK decarbonisation. This portfolio includes carbon capture and storage (CCS), a range of bioenergy technologies (including advanced gasification), new nuclear (large and small modular reactors), gaseous systems (including hydrogen), low carbon vehicles and supporting infrastructure, energy efficient buildings and low carbon heat options (including heat networks) and offshore wind. Targeted policy interventions may be required to address specific market failures that currently inhibit the development of these technologies.
5. New governance and regulatory arrangements that go beyond current sector-specific frameworks should be considered to enable efficient investment in transforming energy infrastructures.
6. Addressing issues around the burden of high energy bills will depend on delivering improvements in home energy efficiency and control over energy use for consumers, as well as changes in retail energy pricing structures.