Scotland's electricity and gas networks: vision to 2030

Chapter 4: Scotland Leading the Way - Innovation and Skills

Our vision: by 2030… the culture of innovation in the sector will continue to grow. For electricity networks this means a focus on coordinating and integrating new technologies, particularly electric vehicles, heat pumps and new generation. Meanwhile, for gas, it means a focus on innovation to support hydrogen and low carbon gases. With the development of new technologies, innovative approaches to bring together previously disparate parts of the energy system can ensure that we make the most of local opportunities in a 'whole system' way. Delivering the skills that a changing sector needs, including in new specialisms such as cyber security and data science, will be a key priority for us, our businesses and our education sector.

The current explosion in new business models and entrepreneurial innovation is creating new ways to interact with the energy system. Innovation from network companies will be essential if our electricity and gas infrastructure is to keep pace with these developments, and with the nature and demands of an increasingly decentralised, decarbonised and flexible energy system.

The Scottish Government understands and supports the vital role that innovation in the energy sector is playing. Our Low Carbon Infrastructure Transition Programme has, since 2015, supported over 50 low carbon projects, providing over £48 million of financial support.

We committed £60 million in 2017 to support innovative low carbon energy infrastructure solutions across Scotland, such as electricity battery storage, sustainable heating systems and electric vehicle charging. Innovation over the next decade will need to focus on integrating new technologies and business models coherently across an evolving energy system. This will mean developing new ways to manage these systems alongside networks in ways that can support the security and reliability of supply that they provide.

Ofgem is also playing a big part in supporting the many innovative ideas and approaches which communities and the network companies are generating. The regulator provided £500 million to support network innovation between 2010 and 2015, and has made innovation a key component of funding for the networks through its price controls.

But there is still more that can be done to make innovation business as usual. For instance, it is more than ten years now since Active Network Management (ANM) was pioneered across the distribution system on Orkney - the world's first smart grid. Today the number of generators connected via ANM across Britain remains small.

We would like to see greater emphasis placed on reporting how and where innovation funding has led to changes in networks' "business as usual" processes. Consumers invest in innovation through their electricity and gas bills and this innovation has to translate into delivery.

Innovation needs to prioritise the challenges that society needs solved, and to focus on today's big challenges - such as the potential role for hydrogen, and the coordination of DSO systems. This means directing innovation funding towards gathering and exploring the relevant evidence and technical issues.

We have seen examples of this, such as the Scottish Government funded ACCESS project on the Island of Mull (see box 7), and Ofgem funded initiatives such as the Scottish Power ARC project, which aimed to integrate new local demand into Active Network Management in south East Scotland.

New innovations and technologies will guide, and could transform, the integration of electric vehicles across our electricity networks. As the number of such vehicles grows we need to explore the options to allow smart chargers to help manage the flow of charge to and from cars supporting safer and more efficient networks, and reducing the need for investment in new cables and wires. This will need to go well beyond technical innovation, and involve the consumer much more directly through innovative business models and techniques to engage and reward consumers for being flexible.

We expect innovation to have an equally important role on the gas side. Projects such as the H100 project, which aims to develop a 100% hydrogen network in Scotland over the coming years, can help us understand the role of networks within that and need to work closely with innovation projects focusing on the production of green gases.

We would like to see greater emphasis on gas and electricity projects working together. This will be important, for example, in identifying the most appropriate way to link the electricity and gas networks through electrolysis of hydrogen from low carbon electricity.

This cross-network innovation will also need to extend to the development of heating networks as we develop the long term regulatory and commercial environment in which they will operate. District heating offers a further opportunity to link to either the gas or electricity networks, or both, and efficient decisions will need to consider the limitations and flexibility of all three network types.

Skills

While Scotland has a strong engineering heritage, the challenges described in this document mean that developing more skilled people across a wider range of disciplines will become ever more important. We need to understand these needs, and work collectively to ensure that our education system, colleges and universities are able to respond.

Highly trained and experienced engineers will increasingly be joined by other specialists in multi-disciplinary teams. For example, we will need to ensure that the networks industry can access and develop appropriate skills in understanding customer behaviours, big data, cyber security and communications.

We will work with Skills Development Scotland to ensure that the changing needs of the sector are reflected - building on the Skills Investment Plan for Scotland's energy sector.

We will also capitalise on our research and development institutions, including our world leading universities, and organisations such as the Offshore Renewable Energy Catapult, the Power Networks Demonstration Centre, and the National HVDC Centre. We also have a number of centres of excellence such as the Future Power Networks and Smart Grids Centre for Doctoral Training at the University of Strathclyde; this is exploring novel solutions to many of the problems discussed in the paper, and producing high quality and highly qualified individuals ready to affect change in this industry.

The Scottish Government will fund new academic research in this area - starting with a CXC fellowship looking at the future stability of the electricity system in Scotland.

Box 7: Networks innovation in Scotland

ACCESS - Mull

The ACCESS project on Mull has demonstrated the ability to coordinate electrical demand, the output of a distributed, community owned renewable generator, on a "virtual" constrained electricity distribution network. The community worked together with SSEN, the local DNO, using a £2 million grant from Scottish Government to connect a new 400 kW hydro generator together with over 70 installations of smart domestic electric storage heaters. The new demand has been managed to ensure that it balances the output of the new turbine, ensuring that the combined system does not overload the network. This is a leading example of the way in which smarter local energy systems can lead to more efficient use of the distribution networks. We expect the industry to consider the learning from ACCESS, and other similar projects in Scotland as we go through the DSO transition.

Surf and Turf - Orkney

Surf and Turf has been the answer to a major challenge for high curtailment of a community wind turbine in Orkney. The 900 kW turbine was connected as part of Orkney's world leading Active Network Management Scheme. However, developments since the project's inception led to higher than-expected reduction in the output of the turbine due to limited capacity of the local distribution network. The solution has been to install a 500 kW hydrogen electrolyser, and use the renewable electricity from the wind turbine that would otherwise be constrained, together with the output of a nearby tidal turbine to produce hydrogen for the local economy. Scottish Government funding of some £1.65 million helped make this project happen. This is a prime example of whole system thinking, with constrained electricity generation now being used to provide power for berthed ships in Kirkwall Harbour. Where projects such as Surf and Turf can be replicated close to the gas network, there would be the opportunity to blend the hydrogen directly into the main gas supply.

Hydrogen 100 Project - SGN

The H100 project is a £2.8 million Ofgem funded project to design the world's first 100% hydrogen gas distribution network, demonstrating the safe, secure and reliable distribution of hydrogen. The project will conduct research into the characteristics of hydrogen to provide a full understanding of the impact of its distribution in relative terms to natural gas. This will then enable the development of a safety case and compliance framework that will ensure the reliable and safe operation of a demonstration network. The project will consider the whole hydrogen supply chain, including transportation, storage, distribution and utilisation. The project is assessing the suitability of three sites in Scotland, in Aberdeen, Levenmouth and Machrihanish with one to be selected as the most suitable location for the construction of the demonstration network. All three sites have features that are representative of the wider gas distribution system and all provide locations that are UK scalable.

Local Energy System Research - University of Strathclyde

Whilst trials and demonstrations are important, so is more fundamental research. The Local Energy Systems project is a three year activity funded by ClimateXChange and based at the University of Strathclyde. It aims to identify the opportunities for linking the supply and demand of energy on a local basis across our networks. The project has developed a database of the electricity network infrastructure around Scotland alongside local heat, transport and renewable generation models. It is now working with Scottish Government and Distribution Network Companies in order to show what could be achieved, and what might be needed to do so.