Welcome

Gas Customer Seminar: The Future of Gas

29th November 2016

2

Agenda

10:00 Seminar Opening Nicola Pitts

Introduction To Slido Leigh Lipton

FOG Project Chris Andreou

Role of Gas in a Decarbonised Energy System Neil Rowley

11:00 Refreshment Break

11:15 Round Table Questions

12:15 Lunch & Expos

13:15 GERG: Hydrogen In Pipeline Systems Robert Judd

13:35 Q&A Panel Session

14:10 Seminar Conclusion & Feedback Nicola Pitts

Social Media

3

We will be tweeting today @nationalgriduk and

@grid_media

You can also follow us at #FutureOfGas and on

Linkedin Future of Gas group

Slido.com event #5894

Wifi: Name: National Grid

Password: Nationalgrid1

Future of Gas – Today, Tomorrow and 2050

29th November 2016

Customer Seminar

Context: why the Future of Gas project?

5

Gas plays a vital role today

50%

30%

90%

35%

6

Of our total

energy needs

Of our

electricity

Of industrial

output power

by gas 23m

Of our home,

hot water and

cooking needs

Customers use gas;

A new gas customer

every 9 minutes!

Gas can remain important out to 2050 and beyond

7

Low gas wholesale price; global

surplus expected to remain

B: Low gas wholesale price C: NTS & supporting

infrastructure is already available

F: Gas for specialist industries

(e.g. chemicals) E: Gas for transport

A: Supply of gas is abundant

D: Flexible source of electricity

Consumers already invested in

the NTS

Consumers

comfortable with

gas

Gas will be used in

specialist industries while

alternatives are being

researched

Gas being used as a cleaner and

more economical fuel for heavy

goods vehicles, public transport,

marine and rail transport

Gas is flexible enough to

produce electricity quickly to

cover the variability of renewable

generation

Gas supplies are cheap and

plentiful (enough for 250 years of

global gas demand)

Additional domestic

sources emerging

(e.g. bioSNG)

Wholesale price of gas close to levels in late ‘90s

8

NTS carries gas across GB and is 99.99% reliable

9

NTS – most flexible part of the wider energy system

10

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

GW

h

Gas

Wind

Interconnectors

Biomass

OCGT

Hydro

Pump Storage

Coal

Nuclear

Source: National Grid data

Electricity generation by fuel source (22nd – 28th Sep 2015)

Gas is the cleanest fossil fuel

Pollutants

(pounds per billion Btu of energy) Natural Gas Oil Coal

Carbon Dioxide 117,000 164,000 208,000

Nitrogen Oxides 92 448 457

Sulphur Dioxide 1 1,122 2,591

Particulates 7 84 2,744

Mercury 0.000 0.007 0.016

11 Source: Energy Information Administration (EIA), Office of Oil and Gas.

While we have made progress, long

journey to achieve 80% reduction by 2050

12

Significant decarbonisation of electricity

Adjusted emissions in key areas, MtCO2e

1990

2015

1990

2015 1990 2015

1990 2015

Power Commercial & Industry Transport Residential

50% 32%

0.8%

18%

Notes: Commercial & industry includes: business, public, industrial process and other energy

Source: https://www.gov.uk/government/collections/provisional-uk-greenhouse-gas-emissions-national-statistics 13

Growing body of evidence

14

CCS-enabled generation is deployed along with nuclear and renewable technologies.

There is electrification of heat as in Electric Future, but this is supported by more renewable gas, reducing the total requirements for electrification in order to hit the 2050 targets.

Investment in CCS means continued gas generation.

High levels of green gas capitalises on the strength of a well-supported gas network meaning low electrification of heat in the residential sector

Gas is used in the transport sector as a lower carbon alternative to petrol and diesel vehicles, especially for heavy goods.

Builds on Leeds H21, hydrogen displaces natural gas.

Produced at NTS / LTS offtakes from natural gas transported by NTS. Methane converted to hydrogen

Industrial demand split between hydrogen and NTS gas.

Vehicle refuelling offtake potential. SMRs (already established in the UK) and CCS both required.

Electric Transformation Balanced Pathway

Carbon Capture Hydrogen

Gas demand constrained by low investment in CCS & nearly

all gas demand is eliminated from power stations by 2050.

Cleaner light industry that doesn’t require high thermal

delivery dominates while heavy industry declines.

Heating is replaced with electrification or more efficient gas

appliances, removing 2/3 of demand.

Significant renewables & nuclear electricity provisions.

15

Innovation is essential

16

Have your say

Greener

sources of

gas?

Innovation?

Policies

required?

Future of

gas?

Role of gas

today?

Decarbonisation

of heat?

17

Next steps and timeline

18

29 November 2016

Document published and new

website launched

Spring 2017

Further

insights from

engagement

The Forecasting Game Examining the technologies that could impact the future

November 2016

Results shown for the game reflect voting on the day

2050 Carbon Targets

20

Introduction to the 2050 Carbon Targets A

B Forecasting Game – You Decide!

C Results – Decarbonisation & Impact on Gas

Gas has a big role to play in decreasing

carbon emissions

21

Generation of Carbon Emissions The role of gas

Carbon Emission Levels 2015 (Existing) to 2050 (Target)

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

450.0

500.0

2015 2020 2025 2030 2035 2040 2045 2050

- 75%

443 MtCO2e/y

105 MtCO2e/y

0

50

100

150

200

250

300

350

400

450

500

2015 Gas-To-Power

Other

Non-Gas Heat

Transport from Oil

Coal-To-Power

Gas-To-Heat

Gas-To-Power

Total carbon emissions

= 443 MtCO2e/y

Gas

Progress has been made…

22

Coal

Renewables

Energy

Efficiency

(58 MtCO2e/y) reaches a plateau from

2020 onwards

(57 MtCO2e/y) reaches a plateau from

2030 onwards

(20 MtCO2e/y) in 2050

2015-2050 max. saving

in carbon emissions

• Closure of all conventional coal-fired power stations by

2025 at the latest (by 2020 in Gone Green)

• Coal-fired generation capacity has reduced by 25% since

2012

• UK government target: 15% of energy generated from

renewables by 2020

• 14 GW of onshore/ offshore wind power installed today,

i.e. 84 TWh ~1/4 total electricity generation

• 2030 planned wind power capacity: 40 GW

• Carbon Plan 2050: energy efficiency should contribute to

a reduction of 31 to 54% in final energy consumption per

person

Description Topic

And the impact is…

23

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

UK carbon

emissions

Energy Efficiency

Total reduction in

carbon emissions since

2015 from

Renewables

Coal

2050

target

=

105

MtCO2e/y

2050 target not achieved

Reduction in Carbon Emission Levels (2015 to 2050)

Legend

310 MtCO2e/y

443 MtCO2e/y

310 MtCO2e/y

MtCO2e/y

Other options to consider…

2050

Heat

Hydrogen

CCS

Nuclear

EVs

NGVs

24

Existing actions

(coal, renewables,

energy efficiency)

Total reduction in

carbon emissions since

2015 from

Nuclear

Legend

UK carbon

emissions 310

MtCO2e/y

An example of the impact one lever can have…

25

2050 target not achieved

If all possible actions are taken to push for nuclear…

• Hinkley Point C (3.2 GW) is built (expected in 2025)

• Further large scale rollout to 2050 (large nuclear stations & SMR)

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

2050

target

=

105

MtCO2e/y

Potential Reduction in Carbon Emission Levels (2015 to 2050)

443 MtCO2e/y

250 MtCO2e/y

MtCO2e/y

Forecasting Game

26

Introduction to the 2050 Carbon Targets A

B Forecasting Game – You Decide!

C Results – Decarbonisation & Impact on Gas

Nuclear

Cast Your Vote!

27

1

Which of the following options for nuclear do you think is the most likely?

1.1 • Hinkley Point C (3.2 GW) is built (expected in 2025)

• Further large scale rollout to 2050 (large nuclear stations & some SMR)

1.2 • Hinkley Point C (3.2 GW) is built

• No additional nuclear power stations are built

1.3 • No nuclear power stations are built

Potential Reduction in Carbon Emission Levels (2015 to 2050)

326

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

Nuclear

Your Vote – Impact on Carbon Emissions

28

1

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

2050 target not yet achieved

2050

target

=

105

MtCO2e/y

MtCO2e/y

Carbon Capture & Storage (CCS)

Cast Your Vote!

29

Which of the following options for CCS do you think is the most likely?

2.1 • All power plants and a third of industrial plants are equipped

2.2 • All power plants are equipped

2.3 • A third of industrial plants are equipped

2.4 • No power or industrial plants are equipped

2

Potential Reduction in Carbon Emission Levels (2015 to 2050)

Carbon Capture & Storage (CCS)

Your Vote – Impact on Carbon Emissions

30

2

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

• Power plants are

equipped with CCS

287

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

2050

target

=

105

MtCO2e/y

2050 target not yet achieved 30

MtCO2e/y

Hydrogen

Cast Your Vote!

31

Which of the following options for hydrogen do you think is the most likely?

3.1 • Large scale hydrogen (60 TWh/y) created from gas with CCS

3.2 • Large scale hydrogen (60 TWh/y) creation from biomass with CCS

3.3 • Large scale hydrogen (60 TWh/y) creation from electrolysis

3.4 • Low levels / no UK hydrogen creation

3

Potential Reduction in Carbon Emission Levels (2015 to 2050)

Hydrogen

Your Vote – Impact on Carbon Emissions 3

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

• Power plants are

equipped with CCS

273

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

2050

target

=

105

MtCO2e/y

• Large scale hydrogen

from gas with CCS

32

2050 target not yet achieved 32

MtCO2e/y

Heat Decarbonisation

Cast Your Vote!

33

Which of the following options for heat decarbonisation do you think is the most likely?

4.1 • By 2050, domestic heating will be provided mainly (90%) with gas-

fuelled heat pumps

4.2 • By 2050, domestic heating will be provided mainly (80%) with

electricity-fuelled heat pumps

4.3 • Low penetration of either technology

4

Potential Reduction in Carbon Emission Levels (2015 to 2050)

Heat Decarbonisation

Your Vote – Impact on Carbon Emissions 4

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

• Power plants are

equipped with CCS

273

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

• Large scale hydrogen

from gas with CCS

• Low penetration of

either techs 2050

target

=

105

MtCO2e/y

2050 target not yet achieved 34

MtCO2e/y

Electric Vehicles (EVs)

Cast Your Vote!

35

Which of the following options for EVs do you think is the most likely?

5.1 … by 2020

5.2 … by 2030

5.3 … by 2040

5.4 … post 2050

5

EVs account for the majority of new light vehicle acquisitions…

Potential Reduction in Carbon Emission Levels (2015 to 2050)

Electric Vehicles (EVs)

Your Vote – Impact on Carbon Emissions 5

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

• Power plants are

equipped with CCS

251

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050

• Large scale hydrogen

from gas with CCS

• Low penetration of

either techs

• A majority of EVs by

2040

2050

target

=

105

MtCO2e/y

2050 target not yet achieved 36

MtCO2e/y

Natural Gas Vehicles (NGVs)

Cast Your Vote!

37

Which of the following options for NGVs do you think is the most likely?

6.1 • Gas is used as fuel for over 80% of large vehicles by 2050.

6.2 • Low penetration of natural gas as a fuel for large vehicles (less than 20%)

6

Results

38

Introduction to the 2050 Carbon Targets A

B Forecasting Game – You Decide!

C Results – Decarbonisation & Impact on Gas

Carbon Emissions

Your Result vs Gone Green

1

2

3

• Hinkley Point C

4

5

6

0 Coal, Renewables,

Energy Efficiency

• Power plants are

equipped with CCS

247 105

0

50

100

150

200

250

300

350

400

450

500

2015 2020 2025 2030 2035 2040 2045 2050 GG 2050

• Large scale hydrogen

from gas with CCS

• Low penetration of

either techs

• A majority of EVs by

2040

• Gas is used for over

80% of large vehicles

2050

target

=

105

MtCO2e/y

Gone Green

2050

Potential Reduction in Carbon Emission Levels (2015 to 2050)

39

2050 target not achieved

MtCO2e/y

The above legend applies to the left

side of the graph, and not to the

“Gone Green” 2050 scenario.

Gas Demand & 2050 Peak Demand

Your Result vs Gone Green

40

Annual Natural Gas Demand

Your Choices

2050 Peak Demand in Natural Gas (Yearly)

Your Choices

844

753

638 567 602 633 656

579

0

200

400

600

800

1000

1200

2015 2020 2025 2030 2035 2040 2045 2050

5.1 5.2

4.7 4.2 4.2 4.3

4.1

3.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

2015 2020 2025 2030 2035 2040 2045 2050

Gas-To-

Heating

Gas-To-

Power

Gas-To-

Hydrogen

Gas-To-

Transport

Gone

Green

Twh/y Twh/d

Round Table Sessions

How will new technologies impact the way you

operate? Will this change the way you want to use

the NTS?

How do you see

the wider role of

gas transmission

changing?

How do you think the way you

use gas transmission might

change in the future?

2

How will this impact your

business?

How do you expect supply of

gas to change? How do you

expect demand for gas to

change?

1

How can we help?

What changes in our commercial

arrangements are needed to deliver the products and services

that you want?

Will our current commercial

arrangements for gas be fit for

purpose in a future energy

market?

5

In the future what services and

products do you want from the NTS?

What Government policies and commercial

arrangements need to be considered that encourage the right

long term investment from industry

parties?

Where do you

need more

certainty?

Where do you need certainty to make investments?

6

How will we

compete with

European and

Global markets?

How do we ensure that the GB

gas market remains attractive

into the future?

3

Are there

alternatives to

CCS?

For how long will

gas remain

relevant?

How can we decarbonise gas?

4

Round Table Sessions

How should the

market change to

support security of

supply into the future?

Lunch & Expos

44

Afternoon Agenda

GERG: Hydrogen In Pipeline Systems

Robert Judd – see separate presentation

Q&A Panel Session

Nicola Pitts, Chris Andreou, Chris Brown, Robert Judd, Tony Nixon

Seminar Conclusion & Feedback

Nicola Pitts

Feedback Polls – Priorities and Engagement

45

Slido.com event #5894

Through our engagement with you, we have identified a

number of high level priorities for the Gas business.

Whilst all these are vitally important to running a

successful network, we’d really appreciate it if you could

rate how important they are to you. The output of this

will help us to prioritise the work around these topics.

Conclusion

46

Thanks for your participation

Please complete our short poll to provide your feedback

www.futureofgas.uk

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