This week we have the first of a series of blog posts on the future of Europe’s electricity supply by Peter Davies from the Department of Physics. To start us off Peter discusses the expected changes in the electricity market by 2050.

European governments believe climate change will cause significant disruption to the world economy, and population, over the next century if carbon and other greenhouse gas emissions are not reduced. To tackle this problem many national and international bodies are working on a step change in our use of energy. In particular the European Union is aiming for improved energy efficiency, increased use of electricity as a source of energy and better management of energy resources by 2050.

ENERGY EFFICIENCY

Improving energy efficiency means reducing the energy required to provide goods and services. Studies have concluded that energy efficiency improvements are the cheapest way not only of reducing energy costs but also of reducing carbon emissions. There is a limit beyond which further improvements cost more than the energy cost savings, but most processes are some way from this limit at present. Publication of agreed future European carbon tax levels would enable industry and commerce to make optimum energy-efficiency investment decisions.

Some European countries have already made a start on energy efficiency with Germany leading the world. Since 1990 German GDP at constant currency has increased 41% while electricity consumption increased 17% with total energy consumption decreasing by 10%. And Germany plans to reduce energy consumption to 80% of 2008 levels by 2020, and by 2050 to be at 50% of 2008 levels. There is no obvious reason why the rest of Europe cannot set similar targets and follow suit.

Saving energy at home and in industry

Energy efficiency improvements will be reflected in 2050 domestic electricity bills. Households will use less electricity and, allowing for inflation, total bills could well be smaller than at present.

This is led by European electrical appliance and lighting regulations, which may seem bureaucratic and onerous. Yet they have already resulted in significant cost and energy savings and CO₂ reductions, and there is much more to come as households replace older appliances with newer, energy-efficient models. EU legislation ensures new domestic appliances consume much less power than old, and as time goes on more types of appliances will be subject to new EU efficiency rules.

Improvements to industrial processes have also increased the overall efficiency of energy use (including use of fossil fuels and electricity) of European industry by 30% over the last 30 years, and the EU expects to achieve more in the future.

MAJOR NEW USES OF ELECTRICITY

If activities such as transport and heating change to use electricity instead of fossil fuel, they can become zero-carbon once CO₂ emissions are removed from electricity generation (which I will cover in my next post). However higher costs of equipment can be a problem. As electricity is a higher quality of energy it is more useful than the same quantity of energy in the form of heat. But the inefficiencies of generation make it more expensive than the same quantity of energy from fossil fuels.

Electric Vehicles and Other Electric Ground Transportation

Electric vehicles are already seen on European streets. At the high end are cars like the Tesla model S with vehicles such as the Nissan Leaf positioned as affordable alternatives to standard saloon cars. Compared with petrol or diesel, the cost per km of electricity is very low.

Despite the existence of quite extensive charging networks, range anxiety is a major factor preventing personal electric vehicle sales. Potential customers worry the battery might go flat before they reach their destination, and cannot necessarily afford a battery which will give the vehicle the same range between refuelling as a petrol-fuelled car would have. This is due to the high cost of lithium ion batteries which currently are the best technology for electric vehicles.

It is expected that once batteries fall below $150/kWh the mass market for cars will switch to electric vehicles. The historical cost reduction in lithium-ion batteries for the largest manufacturers works out at 8% per annum. At that rate, based on $230/kWh in 2020 expected from the Tesla Gigafactory, lithium-ion battery prices would be below $150/kWh well before 2030. Hence, in the 2050 timeframe road transportation ought to consist mainly of electric vehicles replacing the current petrol or diesel-fuelled vehicles.

The patterns of use of buses and commercial vehicles are more clearly defined than for personal transport, so such fleets may move to electric power much sooner, as range anxiety is not a major factor. London is already piloting some all-electric buses and launches an all-electric bus route later this year alongside the world’s first purpose-built all-electric double-decker.

Move to Heat Pumps for Domestic Heating and Cooling

The EU requires a 25% reduction in energy demand for all new buildings from 2016, and from 2021 new buildings will need to be nearly carbon neutral, meaning they will cause low, if any, net CO2 emissions. Home and water heating currently account for 67% and 14% respectively of European domestic energy use, and normally use natural gas as a fuel. Continued use of natural gas for home and water heating would limit reductions in overall CO2 emissions.

Carbon taxes are expected to raise the cost of gas, making electricity more competitive and driving a move to electric heating. This will gradually result in zero carbon emissions for heating as CO2 emissions from electricity generation are eliminated.

Currently the most common way of heating your home using electricity is by electric storage radiators. These however require a lot of power and are expensive to run. Technologies like electric heat pumps are much more efficient and can also provide summer air conditioning.

However a heat pump system is more expensive than a gas boiler, so to make the most of them homes should first be well insulated, minimising the required capacity and cost of the heat pump system replacing the gas boiler. Double glazing, loft insulation and cavity wall insulation are straightforward and pay for themselves in a few years. But in the UK, 7 million older houses have no cavity walls and are very wasteful of heat. Internal or external insulation of solid walls is expensive. It is estimated only 15% of UK homes with solid walls will be properly insulated by 2050 which may slow the move to electric heating. Fortunately most housing in the rest of Europe is in better shape.

FLEXIBILITY IN TIME OF MEETING ELECTRICITY DEMAND

We expect there to be a European electricity Supergrid by 2050. It would be a collection of national or regional smart grids with Europe-wide and local inter-country connectors which would allow substantial electricity flows on a European scale. For more information see Caitríona Sheridan’s post, “A European super grid”.

The smart grids that make up the Supergrid would use computerised techniques to gather and act on information relating to electricity generation and use. This would include bringing forward or pushing backwards some uses to a time more convenient for the grid, when there is more power available from renewable sources such as wind or solar power. Known as “demand response,” it means that appliances can respond to the availability of electricity and hopefully avoid massive spikes in demand. See European demand response

It is expected that demand response will reduce peak-time load by around 10-15%, possibly more, resulting in even higher CO2 emission savings.

Rescheduling Domestic Energy Demand

To reduce bills, consumers could allow domestic appliances such as washing machines and dishwashers to defer starting until the grid has power to spare. Smart meters and the smart grid would jointly plan when to run appliances to both meet the requirements of users and balance electricity generation and demand. Domestic users would expect no more than a few hours delay in running appliances.

When the wind is forecast to drop, fridges and freezers could be instructed to cool down before the predicted power shortage. They could then idle for longer while still keeping food sufficiently chilled. Similarly heat can be stored cheaply for some hours so the timing of electricity use by domestic heat pump systems could be controlled flexibly by the smart grid. And electric vehicle charging is an ideal flexible smart-grid load.

Not all appliances will be managed by the smart grid. Lights, kettles, TV and radio must switch on instantly when required. Users would also be able to instruct any smart-grid controlled device to run immediately.

Flexible Control of Industrial Demand

Some industrial processes make large and potentially very flexible demands on the grid. Aluminium smelting is the classic case – power represents 30-40% of the costs of aluminium. Some smelters already allow production to be controlled by the grid and varied both up and down from the most efficient level. When the production rate is either increased or decreased from the optimum rate, the cost per ton of aluminium increases. The demand response contract between the industrial power users and the grid operators must compensate for such additional costs and must both increase the overall profitability of aluminium smelting and the stability of the grid.

Work is ongoing to extend flexible operation to other large industrial processes. In contrast to the limited domestic appliance flexibility, large industrial processes can potentially operate at reduced or increased load for days or weeks.

SUMMARY

2050 electricity demand is expected to change substantially. Existing electrical appliances need to be more efficient. There should be new electricity demands such as domestic heat pumps and electric vehicles. And many uses of electricity may have much more flexibility as to when power must be supplied. Such flexibility smooths the path to high levels of variable renewables generation from wind and solar which will be covered in the second part of this series.