In common with the rest of Europe, the UK’s energy system is facing unprecedented challenges. As the previous generation of power stations reach the end of their lives and are decommissioned, the need to replace existing infrastructure – and ensure security of supply - will become increasingly acute. However, new facilities must be built at reduced costs for industry, consumers and the environment
Europe’s CO2 reduction targets are ambitious, and rightly so, but to deliver them, we need to develop new technologies which are commercially viable. Any system based on current technologies will simply be too expensive to implement.
Tackling affordability, sustainability and security relies on taking a pragmatic approach, picking technologies that work for end users and investors. In the UK it is predicted that the electricity market alone will require £110 billion in investment between now and 2020. Unlocking such a huge sum of project funding from the private sector will depend on creating commercial confidence and demonstrating economic viability.
Investing in new energy technologies
Within this low carbon challenge lies economic opportunity. If we recognise energy policy as a core component of industrial and economic policy, there is the potential to create supply chains and expertise that can be marketed and applied internationally.
In order to promote the development and application of novel energy technologies that can both diversify supply and reduce CO2 emissions, the Energy Technologies Institute – a public-private partnership between energy and engineering companies BP, Caterpillar, EDF, E.ON, Rolls-Royce, Shell and the government - has to date invested £154 million in projects across nine technology programme areas. These are: offshore wind; marine; distributed energy; buildings; energy storage and distribution; carbon capture and storage; transport; bioenergy, and smart systems and heat.
Climate change goals
Using our members’ and industry expertise to deliver targeted investments in new energy technology, ETI aims to accelerate the development, demonstration and eventual commercial deployment of affordable energy technologies.
Like most businesses, we operate on a principle of basing decisions on sound evidence. Furthermore, our programmes provide a proof of concept for technologies that are intended to increase energy efficiency and reduce greenhouse gas emissions, thus helping to achieve energy and climate change goals.
The ETI’s strategic decisions and investments are underpinned by our internationally peer-reviewed Energy System Modelling Environment (ESME) tool. ESME is a national energy system design tool that links heat, power, transport and infrastructure, analysing 128 different technologies and assessing the impact they might have on an energy system and finding the least-cost route to meeting future energy demands between now and 2050.
ESME is continuously updated with inputs from our projects, and from industrial and public sector members, thus providing critical insights with which our private and public sector members can inform policy and support technology strategy development.
Future energy priorities
Through ESME, the ETI has identified what we see as six big priority development areas for future energy systems.
These are:
- Efficiency – smarter use of energy in business and daily lives makes a contribution under all emission reduction scenarios.
- Nuclear – while it is possible to create a future energy system capable of meeting 2050 emissions reductions targets without nuclear energy, it would come with a high price tag, and – in the case of the UK at least - there is a strong economic case for building new nuclear power stations.
- Carbon Capture & Storage (CCS) – this is a key technology lever, especially given its potential for wide application, in particular, in combination with bioenergy. There is a need to start work on its rollout now, in order to create an affordable storage and transport network.
- Bioenergy – has major potential to result negative emissions if production is integrated with CCS and is very flexible in how it can be used in the energy system.
- Gas for heat & transport – has the potential to play a material role up to 2050, including power, space heating, transport and process heat applications.
- Offshore Renewables – provides the best hedging option if any of the above identified technologies do not proceed to plan. However, it will be critical to bring the costs down.
Building sustainable energy systems and meeting CO2 emissions targets is not a case picking one technology over another - a balanced combination of all six is needed to achieve our goals. But if we are to capitalise on these opportunities, time is of the essence.
Andrew Haslett is Director of Strategy Development at the Energy Technologies Institute, a public-private partnership between the energy and engineering companies BP, Caterpillar, EDF, E.ON, Rolls-Royce and Shell and the UK Government. www.eti.co.uk
Receive the Funding Newswire each Tuesday, our Policy Bulletin each Thursday, and news about bridging Europe’s east-west innovation gap twice a month in The Widening. 
A unique international forum for public research organisations and companies to connect their external engagement with strategic interests around their R&D system.
