UK Electricity Research Articles

Governing Infrastructure Networks for a Low Carbon Economy: Co-Evolution of Technologies and Institutions in UK Electricity Distribution Networks

This paper analyses efforts to promote innovation in the UK energy networks sector. Using a case study approach, we chart the co-evolution between technologies and institutions in electricity distribution networks since the introduction of privatization and market liberalization over twenty years ago. It is observed that as a result of macro level institutional dynamics, innovation has become an increasingly important policy and regulatory goal. However, efforts to promote radical and architectural innovation, such as the transition to a smart grid, face significant barriers at the firm and sector levels. It is argued that changes are required to the formal and informal institutions which govern the sector in order to promote a more coherent relationship between technological and institutional change, leading to a productive innovation system which allows firms to collaborate across the electricity value chain and develop inter-firm/cross sector innovation partnerships.

Grid-connected renewables, storage and the UK electricity market

This article is mainly a counterpoint to an article by Swift-Hook in the journal of Renewable Energy titled “Grid-connected intermittent renewables are the last to be stored”. It also describes the four main distinct UK markets where electrical energy and services are traded, in order to provide a context for the discussion of renewable energy and energy storage in the UK electricity system. In Swift-Hook’s article it was argued that “grid-connected intermittent renewables like wind energy will never be stored unless nothing else is available” and that “storage is counter-productive for fuel saving”. We, however, find evidence that “grid-connected intermittent renewables” have been, and will continue to be stored when it suits the “UK market” to do so. Furthermore, Swift-Hook’s article neglects the potential wider benefits that storage offers to UK energy policy’s goals, in terms of reduced emissions (when used in conjunction with renewables) and enhanced security of supply.

Tidal Power in the UK and Worldwide to Reduce Greenhouse Gas Emissions

This paper discusses the role of Tidal Power in the UK in fulfilling the UK's requirements for reducing greenhouse gas emissions. Generating electricity from tidal range of the Severn Estuary has the potential to generate some 5% of UK electricity from a renewable indigenous resource. The paper focuses primarily on the proposed Severn Barrage considering potential benefits, conditions for sustainable development, energy policy context and compliance with environment legislation. UK tidal resource is reviewed: stream resource (that is KE contained in fast-flowing tidal currents), and tidal range resource (that refers to gravitation potential energy). The top tidal range and tidal stream sites in the UK with the resource (in TWh/year) are indicated. A feasibility study for Tidal Range development in the Mersey Estuary is also summarised and other schemes including the Loughor Estuary (Wales), Duddon Estuary (located on the Cumbrian coast) and the Thames Estuary proposals are reported. Also given is a strategic overview of the Severn Estuary resource, electric output and characteristics, carbon emissions (carbon payback and carbon reduction potential) and physical implications of a barrage.

Creating Personalised Energy Plans: From Groups to Individuals Using Fuzzy C Means Clustering

Changes in the UK electricity market mean that domestic users will be required to modify their usage behaviour in accordance with energy efficiency targets. Clustering allows usage data, collected at the household level, to be clustered into groups and assigned a stereotypical profile which may be used to provide individually tailored energy plans. Fuzzy C Means extends previous work based around crisp K means clustering by allowing a household to be a member of multiple customer profile groups to different degrees, thus providing the opportunity to make personalised offers to the household dependent on their degree of membership of each group. In addition, feedback can be provided on how household’s changing behaviour is moving them towards more ”green” or cost effective stereotypical usage

Fuel Cell Hybrid Taxi Well-to-Wheel Life-Cycle Analysis

In a collaboration led by hydrogen fuel cell developer Intelligent Energy, a fleet of classic London cabs fitted out with hydrogen fuel cell power systems will be produced, with the objective of having a small fleet ready for full road trials in time for the 2012 Olympics. This research develops the Well-to-Wheel (WTW) Life-Cycle Analysis (LCA) for two hydrogen powered vehicle powertrain options (fuel cell plug-in hybrid vehicle, PHEV-FC; and fuel cell hybrid vehicle, HEV-FC), in comparison to the conventional ICE Diesel Taxi and a full electric vehicle (EV). In terms of energy pathways, the introduction of these different vehicle technologies is associated with alternative energy sources in a Taxi fleet so the following fuel pathways are compared: diesel, considering the average European diesel fuel characteristics; electricity, considering the 2008 UK electricity generation mix; and hydrogen, considering the compressed hydrogen option from centralized natural gas reforming. This Well-to-Wheel analysis combines the Tank-to-Wheel (TTW), which accounts for the emissions and fuel consumption that result from moving the vehicle through its drive cycle, with the Well-to-Tank (WTT), which accounts for the fuel production stage. For the European certification driving cycle (NEDC), the PHEV-FC Taxi resulted in the lower WTW energy and CO2 emissions results (2.99 MJ/km and 159 g/km), followed by the HEV-FC Taxi (3.28 MJ/km and 174 g/km), and by the EV (3.21 MJ/km and 173 g/km), compared to the ICE Diesel (3.60 MJ/km and 280 g/km). For a more demanding London driving cycle a 33, 28, 54 and 154% increase in the WTW energy consumption and CO2 emissions is observed for the PHEV-FC Taxi, HEV-FC Taxi, EV and ICE Diesel respectively.

Electricity sector liberalisation and innovation: An analysis of the UK's patenting activities

Liberalisation has had a marked effect on innovative activities in the electricity industry. In particular, electricity reforms have resulted in a reduction in R&D spending in the sector. R&D and patenting activities are respectively regarded as innovative inputs to and outputs from technological progress. The present paper examines the effect of the reforms on patenting activity in the UK electricity sector. The results indicate that electricity related patents in non-nuclear and renewable technologies have increased in the post-liberalisation period. We attribute this trend to the increased commercialisation of the sector. While this development is positive, we argue that a lasting decline in R&D will in the longer run reduce technological progress and innovation in the sector. In order to maintain the pace of innovation, we discuss the need to design a new framework for innovation systems that is commensurate with the functioning and incentive mechanisms of a liberalised sector.

Levelised costs of Wave and Tidal energy in the UK: Cost competitiveness and the importance of “banded” Renewables Obligation Certificates

In this paper, publicly available cost data are used to calculate the private levelised costs of two marine energy technologies for UK electricity generation: Wave and Tidal Stream power. These estimates are compared to those for ten other electricity generation technologies whose costs were identified by the UK Government ( DTI, 2006). Under plausible assumptions for costs and performance, point estimates of the levelised costs of Wave and Tidal Stream generation are £190 and £81/MWh, respectively. Sensitivity analysis shows how these relative private levelised costs calculations are affected by variation in key parameters, specifically the assumed capital costs, fuel costs and the discount rate. We also consider the impact of the introduction of technology-differentiated financial support for renewable energy on the cost competitiveness of Wave and Tidal Stream power. Further, we compare the impact of the current UK government support level to the more generous degree of assistance for marine technologies that is proposed by the Scottish government.

Making electricity networks “visible”: Industry actor representations of “publics” and public engagement in infrastructure planning

This interview study with UK electricity distribution and transmission network operators (DNO and TNO) and the regulator Ofgem, examines how key industry actors conceptualise “publics,” “stakeholders” and “customers” and how these conceptualisations subsequently inform their engagement practices with these heterogeneous groups. The results show that regulatory changes to the structure of distribution networks have encouraged greater levels of “stakeholder” involvement. However, DNO regional monopoly powers and the regulatory environment serve to conflate network actors’ representations of “the public” with “customers,” and also “hides” DNO roles in a manner that precludes direct citizen engagement. TNO respondents employ public exhibitions in transmission line siting, although at a stage “downstream” in the decision-making process whereby citizens have little decisional influence. We conclude that network operators adopt the rhetoric of deliberative engagement whilst lacking a clear rationale and effective means to incorporate citizen perspectives in long-term network development or specific infrastructure siting proposals.

Energy storage in the UK electrical network: Estimation of the scale and review of technology options

This paper aims to clarify the difference between stores of energy in the form of non-rechargeable stores of energy such as fossil-fuels, and the storage of electricity by devices that are rechargeable. The existing scale of these two distinct types of storage is considered in the UK context, followed by a review of rechargeable technology options. The storage is found to be overwhelmingly contained within the fossil-fuel stores of conventional generators, but their scale is thought to be determined by the risks associated with long supply chains and price variability. The paper also aims to add to the debate regarding the need to have more flexible supply and demand available within the UK electrical network in order to balance the expected increase of wind derived generation. We conclude that the decarbonisation challenge facing the UK electricity sector should be seen not only as a supply and demand challenge but also as a storage challenge.

Do consumers switch to the best supplier?

This paper demonstrates that the ability of consumers to choose the best alternative supplier is limited even in a relatively simple and transparent market. Across two independent datasets from the UK electricity market we find, on aggregate, that those consumers switching exclusively for price reasons appropriated less than a half of the gains available. While such outcomes can be explained by high search costs, the observation that at least 17% of consumers actually reduced their surplus as a result of switching cannot. We rule out an explanation of incorrect demand prediction, and test for others including mis-selling.

Conditions for photovoltaics deployment in the UK: The role of policy and technical developments

The article discusses the conditions necessary to foster photovoltaic (PV) technologies deployment within the UK electricity sector. It explores the incentives to invest in PV technologies by assessing the financial viability of PV system investments in the UK. The analysis focuses on a set of target PV technologies and applications for the domestic sector. First, it provides a picture of profitability and incentives to invest in the targeted PV systems under current UK market, technical, and regulatory conditions. Then, the analysis looks at the role of policy and potential future technological development by exploring the impact of alternative policy instruments and technology cost reductions on the financial viability of investing in PV. The analysis shows that domestic PV investments are generally not profitable under current cost, market, and regulatory conditions. The initial capital costs are too high and the current policy framework is not enough to make PV systems financially viable. The introduction of high-enough feed-in tariffs, as well as the achievement of target cost reductions, would make PV systems financially attractive and would likely increase PV deployment in the UK.

Price transmission in the UK electricity market: Was NETA beneficial?

This paper explores the relationship between domestic retail electricity prices in Great Britain and their determinants in the context of the New Electricity Trading Arrangements (NETA) introduced in 2001. We employ a consistent comparison of wholesale power price series before and after NETA, alongside a difference-in-differences analysis based on using Scotland as a control. Despite NETA's stated intention of reducing wholesale and thereby retail prices, we conclude that its net effect, alongside other developments, instead merely rearranged where money was made in the system.

Blackout: coal, climate and the last energy crisis

Coal fuels more than 30 per cent of UK electricity production, and about 50 per cent in the US, providing a significant portion of total energy output. China and India's recent ferocious economic growth has been based almost entirely on coal-generated electricity. Coal currently looks like a solution to many of our fast-growing energy problems. However, while coal advocates are urging us full steam ahead, the increasing reliance on this dirtiest of all fossil fuels has crucial implications for energy policy, pollution levels, the global climate, world economy and geopolitics. Drawbacks to a coal-based energy strategy include: Scarcity - new studies suggest that the peak of world coal production may actually be less than two decades away; Cost - the quality of produced coal is declining, while the expense of transportation is rising, leading to spiralling costs and increasing shortages; and, Climate impacts - our ability to deal with the historic challenge of climate change may hinge on reducing coal consumption in future years. Blackout goes to the heart of the tough energy questions that will dominate every sphere of public policy throughout the first half of this century. It is critical reading for planners, educators and anyone concerned about energy security, oil depletion and climate change.

Valuing a gas-fired power plant: A comparison of ordinary linear models, regime-switching approaches, and models with stochastic volatility

Energy prices are often highly volatile with unexpected spikes. Capturing these sudden spikes may lead to more informed decision-making in energy investments, such as valuing gas-fired power plants, than ignoring them. In this paper, non-linear regime-switching models and models with mean-reverting stochastic volatility are compared with ordinary linear models. The study is performed using UK electricity and natural gas daily spot prices and suggests that with the aim of valuing a gas-fired power plant with and without operational flexibility, non-linear models with stochastic volatility, specifically for logarithms of electricity prices, provide better out-of-sample forecasts than both linear models and regime-switching models.

Willingness-to-Pay for Quality of Service: An Application to Efficiency Analysis of the UK Electricity Distribution Utilities

Efficiency analysis of electricity distribution networks is often limited to technical or cost efficiency measures. However, some important non-tradable aspects of their service such as quality of service and network energy losses are often not part of the analysis. Moreover, technical or cost efficiency should not be achieved at the expense of allocative and economic efficiency. Valuation of service quality for regulatory models is particularly difficult. This paper presents an empirical approach to measure and incorporate service quality and energy losses into the analysis of technical and allocative efficiency of the utilities. We apply our method to the case of the distribution networks in the UK between 1990/91 and 2003/04 using the data envelopment analysis technique. We find that the efficiency of the utilities improved during the first and second five-year distribution price control reviews but exhibited a slight decline during the third review period. We find relatively low allocative efficiency - i.e. a mismatch in allocating resources among expenditures, service quality, and network energy losses. The results suggest that currently the utilities may not be correctly incentivised to achieve socially optimal trade-offs between these.

Pricing behaviour under competition in the UK electricity supply industry

This paper investigates the evolution of electricity prices for domestic customers in the UK following the introduction of competition. The empirical analysis is based on a panel data set containing detailed information about electricity supply prices over the period 1999 to 2006. The analysis examines the pricing patterns and draws inferences concerning the benefits of incumbency and the gains from search. The econometric analysis of persistence and price dispersion provides rather limited support for the view that the market is becoming more competitive and also indicates that there remain significant potential benefits to consumers from searching alternative suppliers.

Does weather explain cost and quality performance? An analysis of UK electricity distribution companies

In recent years, a number of empirical studies and energy regulators have applied benchmarking techniques to measuring the efficiency and performance of network utilities. An important issue has been the extent to which the results are influenced by contextual factors. Among these, weather factors are frequently discussed as being important. We use factor analysis and two-stage data envelopment analysis techniques to examine the effect of a set of important weather factors (gale, hail, temperatures, rainfall and thunder) on the performance of electricity distribution networks in the UK. The results indicate that such factors often do not have a significant economic and statistical effect on the overall performance of the utilities. The weather parameters in some models are significant in terms of economic efficiency. The results echo our previous findings of the importance of extending the basic model to include other inputs such as total expenditure (Totex), customer minutes lost (CML) and network energy losses in regulatory benchmarking.

Measuring the ROI of talent management

PurposeThis paper aims to consider how effectively today's organizations assess the return on investment (ROI) of their talent management initiatives. It aims to explore the question: How do they know whether the money they spend on recruitment, development and succession management generates a worthwhile commercial benefit to the organization?Design/methodology/approachBased on research conducted with a number of global organizations – including Fujitsu, British American Tobacco, Premier Foods, PepsiCo and Marks & Spencer – this article looks at the steps organizations take to assess the ROI on their investment.FindingsThe paper presents practical case study material from npower – the UK gas and electricity supplier. The case study shows how the business worked to identify leaders and future leaders from its existing talent pool and how this talent management initiative was measured, creating a clear benchmark from which to measure and review future talent investment.Originality/valueThe paper ascertains the key ROI trends and themes that occupy present‐day HR professionals in the UK and outlines a number of practical approaches HR professionals can adopt to evaluate whether their investment in talent is delivering value for the business.

Social representations of electricity network technologies: Exploring processes of anchoring and objectification through the use of visual research methods

The aim of this study was to explore everyday thinking about the UK electricity network, in light of government policy to increase the generation of electricity from renewable energy sources. Existing literature on public perceptions of electricity network technologies was broadened by adopting a more socially embedded conception of the construction of knowledge using the theory of social representations (SRT) to explore symbolic associations with network technologies. Drawing and association tasks were administered within nine discussion groups held in two places: a Scottish town where significant upgrades to the local transmission network were planned and an English city with no such plans. Our results illustrate the ways in which network technologies, such as high voltage (HV) pylons, are objectified in talk and drawings. These invoked positive as well as negative symbolic and affective associations, both at the level of specific pylons, and the 'National Grid' as a whole and are anchored in understanding of other networks such as mobile telecommunications. We conclude that visual methods are especially useful for exploring beliefs about technologies that are widespread, proximal to our everyday experience but nevertheless unfamiliar topics of everyday conversation.

The organisation & the costs of the decommissioning nuclear plants in the UK

- UK electricity consumers have paid provisions for decommissioning since before 1980 but by 2002, there were still negligible funds available to pay for decommissioning civil nuclear facilities. By then, the two major UK nuclear companies, British Energy and British Nuclear Fuels Limited (BNFL), were both effectively bankrupt. This paper examines: the pre-2002 provisions for decommissioning and how they were lost; the Nuclear Decommissioning Authority, a new public body which took over ownership of BNFL's facilities including the duty to manage their decommissioning and how it expects to carry out and fund decommissioning of its sites; how the re-launched British Energy will contribute to decommissioning its eight plants; and government plans for collecting decommissioning provisions for any new plants.JEL classifications: L50, L38, H23, H44, L71Key words: Nuclear power, decommissioning cost, funding and polluter pays.