Chief executive to outline UK infrastructural challenge

A technological revolution in the UK’s infrastructure is already underway but policy changes are needed in order for them to succeed, the chief executive officer of National Grid will say tonight.

In a speech to the Royal Academy of Engineering this evening, Steve Holliday, will argue that energy market reform will make 2011 a pivotal year in the process of decarbonising the grid.

But the right government incentives are needed to encourage international investment in a new energy mix that will see wind replace coal as the single-biggest source of electricity generation, he will say.

The technologies needed to carry out a replacement of existing infrastructure with a decarbonised grid are already proven but need to be upscaled and combined, Holliday told journalists at a press conference yesterday.

‘The first engineering challenge is a people one. It’s a shortage of scientists and engineers, and how… we avoid bridging that gap with imported resources,’ he said.

‘The engineering challenge more broadly, which is underway and quite invisible in many ways to the public, is the huge innovation that’s going on.

‘One of the areas is in high-voltage direct current, where there have been enormous step changes… And there’s an awful lot of work going into energy storage, in particular electricity storage, so at some stage we’d hope for a big breakthrough there.’

Another challenge was developing a more joined-up policy that would coordinate individual projects with wider energy and economic needs, the creation of jobs and the education of sufficiently skilled engineers, he said.

Holliday gave the example of connecting offshore wind farms to the grid, which under current plans would require around 60 separate landing points around the UK, each with their own costs and planning issues.

‘There’s an opportunity to coordinate that and build a lot more infrastructure offshore and probably reduce the landing points by 50 per cent, which we estimate is between £3bn and £5bn [of] capital saving,’ he said.

Holliday also noted the importance of carbon-capture storage (CCS) pilot plants as he said coal wasn’t going to be left in the ground, hence the need for a way of using the fuel and storing the carbon dioxide.

National Grid expects wind power to account for 32 per cent of the predicted 110GW of electricity capacity by 2030, while traditional coal plants will make up just three per cent of the mix and carbon-capture storage projects will add a further 10 per cent.

In terms of percentage, nuclear capacity will remain about the same at 11 per cent as old plants are decommissioned and new ones come on line. Gas use for electricity will fall from 36 per cent to 27 per cent.

Gas will continue to play a role in heating homes and businesses but will also play a key role in providing a back-up electricity source when the wind isn’t blowing, Holliday said at the press conference.

‘Today, gas runs baseload. In 2030, gas will be a huge intermittent supply source, ramping up as it can do as wind comes off.’

He also noted the importance of smart meters and other technology to manage the demand for electricity by remotely controlling appliances in people’s homes.