Each year, we provide detailed analysis of a range of credible and plausible energy scenarios out to 2035 and 2050 that cover a range of issues, including where our energy will come from in future, projected changes in demand and whether the UK will meet its stated environmental emissions targets. The scenarios are based on information and insight from right across the industry, rather than simply the voice of National Grid, because they are developed using a rigorous and robust process that encompasses an enormous amount of stakeholder engagement throughout the year.

1. Twitter: #ukenergy
email: transmission.ukfes@nationalgrid.com
UK Future Energy Scenarios 2014
Richard Smith: Head of Energy Strategy & Policy

2. Twitter: #ukenergy
email: transmission.ukfes@nationalgrid.com
Our journey so far
Cordi O’Hara: Director, Market Operation

3. We all want to understand what the
future journey might look like
Shareoftotalenduseenergy
Carbon intensity
~50%
~0%
~800gCO2e/kWh ~0gCO2e/kWh
Electricity
Gas
Oil
1990
2010
2020
2030
2050
A ‘Low Carbon Life’ pathway to 2050:
1990
2010
2020
2030
2050
2050
1990
2010
2020
2030

4. Our vision of the future affects & informs
how important decisions are made…
Development of
transmission systems
European developments
Supply & demand
for the year ahead
Security of supply
& decarbonisation

5. Twitter: #ukenergy
email: transmission.ukfes@nationalgrid.com
Scoping the future energy landscape
Richard Smith: Head of Energy Strategy & Policy

6. We follow an annual cycle of
scenario development
Once our axioms have been defined,
they underpin our detailed modelling
and drive our specific electricity and
gas, demand and supply scenarios.
Modelling
Our stakeholder engagement allows us
to listen to your views, which are vital
to our outputs. They drive our
processes and inform both our
scenarios and our consultation
process.
Your Views
The scenarios are the end result and a
vision of the future that stakeholders
have informed. The publication of the
Future Energy Scenarios document
marks the start of our annual process
and the continuation of our stakeholder
consultation.
Future Energy Scenarios
An axiom is a premise or starting point
of reasoning. The axioms that we
produce are a reflection pf the
stakeholder feedback that we receive
through our consultation process.
These axioms influence our modelling.
Axioms

7. Everyone is a stakeholder in the future
& we want the widest range of input…

8. …which we use to develop plausible
& credible evidence based scenarios every year…
Generic 5 stage gate process:
Stakeholder
feedback
Stakeholder
feedback
Input data /
market intelligence /
stakeholder feedback
Benchmark data /
market intelligence /
stakeholder feedback
1
 Head of Energy
Strategy & Policy led
 Framework based on
feedback evidence
 Challenge & review
with NGET & NGG
SO leadership &
relevant teams
 Sign-off at SO Exec.
2
 Responsible manager
led (eg. Power
Demand Manager)
 Cogency &
consistency check
across work streams
 Peer challenge &
review with NGET &
NGG SO internal
experts
 Sign-off at Energy
Strategy & Policy
managers meeting
3
 Responsible manager
led (eg. Power
Demand Manager)
 Peer challenge &
review with NGET &
NGG SO internal
experts
 Internal model QA
 Sign-off at Energy
Strategy & Policy
managers meeting
4
 Responsible manager
led (eg. Power
Demand Manager)
 Peer challenge &
review with NGET &
NGG SO internal
experts
 Internal model QA
 Sign-off at Energy
Strategy & Policy
managers meeting
5
 Responsible manager
led (eg. Power
Demand Manager)
 Energy Strategy &
Policy leadership
review
 Process assurance
 Sign-off at Energy
Strategy & Policy
managers meeting
Define scenario
framework &
agree axioms
Define analysis
methods &
assumptions
Draft analysis Revise analysis Produce outputs

9. …breaking down our view of the future
& applying fit for purpose modelling techniques
Power demand modelling example:
Scaling factors based on historic trends for each sector adjusted on
previous winter’s outturn, demand side response
Scaling factors based on historic trends and socio-economic
/ geospatial factors by technology class
RESIDENTIAL DEMAND
Lighting, appliances, heating
(heat pumps), transport (EVs),
housing growth, energy
efficiency, behaviour, ‘SMART’
Deterministic rule based &
specific regression models
INDUSTRIAL & COMMERCIAL
DEMAND
GDP, manufacturing output, non-
manufacturing output, energy efficiency,
energy prices
Econometric regression model
EXPORTS
Market intelligence &
stakeholder data/evidence
Deterministic rule based
model
Geographic demand (post-code analysis)
Peak, minimum and reactive power demand
Annual power demand

10. Your feedback has fundamentally shaped
our 2014 scenarios
“National Grid needs to tell
an engaging story”
“introduce more Future
Energy Scenarios”
“explore scenarios based
around the energy trilemma”
MatthewSpencer
GreenAlliance
GuyNewey
PolicyExchange
Jenny Saunders
National Energy Action
Sunita Bali
Experian
Sustainability
Less emphasis
Sustainability
More emphasis
Affordability
Lessmoney
Affordability
Moremoney

11. Twitter: #ukenergy
email: transmission.ukfes@nationalgrid.com
Our 2014 Future Energy Scenarios
Alice Etheridge: Strategy Development Manager

12. Our 2014 Future Energy Scenarios
Low Carbon
Life
Gone Green
No
Progression
Slow
Progression
Sustainability
Less emphasis
Sustainability
More emphasis
Affordability
Lessmoney
Affordability
Moremoney

13. No Progression
Economic: Slow UK economic
recovery
Political: Inconsistent political
statements within Government,
resulting in investor uncertainty
Technological: Gas is the
preferred choice for generation
over renewables. Little
technological innovation occurs
in the energy sector
Social: Consumers not
engaged with energy efficiency.
Low uptake of electric vehicles
and heat pumps
Environmental: Targets are
missed, no new environmental
targets introduced

14. Slow Progression
Economic: Slow UK economic
recovery
Political: Political will for
sustainability but financial
constraints prevent delivery of
policies
Technological: Renewable
generation chosen over low
carbon generation. Low levels
of innovation in the energy
sector
Social: Engaged consumers
focus on drive for energy
efficiency but with low uptake of
electric vehicles and heat
pumps due to affordability
Environmental: Environment
targets missed but hit later.
New European targets
introduced

15. Low Carbon Life
Economic: Growing UK
economy
Political: Short term political
volatility but long-term
consensus around
decarbonisation
Technological: Renewable
generation at a local level. High
innovation in the energy sector
Social: High uptake of electric
vehicles but consumers not
focussed on energy efficiency.
‘Going Green’ is a by-product
of purchasing desirable items
Environmental: Carbon target
hit. No new environmental
targets introduced

16. Gone Green
Economic: Growing UK
economy
Political: Domestic and
European policy harmonisation,
with long-term certainty
provided
Technological: High levels of
renewable generation with high
innovation in the energy sector
Social: Engaged consumers
focussed on drive for energy
efficiency. This results in high
uptake of electric vehicles and
heat pumps
Environmental: All targets hit,
including new European targets
post-2020