Intelligence: 20 November 2017Infrastructure - The big issue

In June 2017, we welcomed two new members to the world of Barton Willmore. Ben Lewis and Tom Carpen joined us to lead the new infrastructure and energy division of the practice, a specialist area we believe is a critical addition to securing the continued successful delivery of smart, sustainable development UK wide.

The importance of infrastructure, of all types – roads, rail, utilities – in realising real economic growth for the UK is well acknowledged now, from government level down and we are keen to ensure that our new team’s knowledge supports all our project work going forwards, to ensure infrastructure offers maximum benefit to every project we undertake. Here the guys talk us through some of their thinking and priorities in their first four months and how they see the infrastructure challenge affecting all within the property industry. “We are in the midst of an energy revolution. The economic landscape, developments in technology, evolving business models and consumer behaviour are today changing at an unprecedented rate, creating more opportunities than ever” - This is the bold statement that opens National Grid’s 2017 Future Energy Scenarios (FES) document – a statement that it is impossible to argue with if the last three months are anything to go by! But it is not just the energy industry that is evolving – the use of technological advancements in transport, energy and communications have the potential to see the greatest (and the fastest) evolution of our towns and cities since the industrial revolution. How we adapt and evolve in response to these enhancements is a huge area of debate. One thing is certain, we cannot rely on infrastructure providers alone, the evolution will also have to come from the development sector and will require a cultural shift in the way we design, plan, develop and use the built environment.

The Government’s target of an 80% reduction in CO2 emissions by 2050 is already predicted to be unachievable by as early as 2023. The Government is also pursuing the objectives of energy security and energy affordability – two goals which the Industrial Strategy Commission believe are incompatible and cannot be simultaneously achieved with current technology. In conjunction with this, two thirds of the UK’s current generating capacity will close by 2030 and is not currently scheduled to be replaced. Going forwards if we are to meet the emission targets, the energy mix we pursue must be a combination of new generation across a range of technologies, coupled with a significant change in consumer behaviour.

As a result, ‘smart’ is the way forward – be that ‘smart transport’, ‘smart energy’, ‘smart technology’ or ‘smart consumers’ – all have a role to play in ‘smart cities’. This is a huge area of debate with an equally huge range of opportunities and possible outcomes and one that we are keen to assist. Focusing on energy in particular, we now know that the energy industry faces a three-fold dilemma – a trilemma if you will, with issues in terms of security of supply, sustainability and affordability.

The National Grid FES presented four possible scenarios for the future of energy in the UK to 2050: 

Which would you choose?

The two most likely scenarios - Two Degrees and Slow Progression – when looking at the simple world of supply and demand, require a marked reduction of just over 30% in the total demand for gas and electricity by 2050. This time period will see a significant decrease in gas demand (circa 50%) for both heat and power generation, but it will also see a small increase in electricity demand (as electric vehicles become more commonplace and there is a switch from gas to low carbon sources for heat).

How do we get there?

What’s clear is that the reliance on traditional centralised energy supply and demand management must change. Newly established and emerging technologies together with decentralised and smart technologies need to be enabled. We are starting to see a shift. In 2017 alone, we have witnessed numerous significant changes within the energy market which may assist, from Greg Clark’s announcement of £246m to boost expertise in battery technology (July 2017), to the approval of the first subsidy - free solar schemes and record low strike prices under Contracts for Difference for Offshore Wind developments, due to cost reductions in the industry. Even National Grid is evolving as a system operator to become an ‘impartial enabler, informer and facilitator’. There is no doubt in our mind however, that both the ‘Two Degrees’ and ‘Slow Progression’ scenarios need a significant shift in the way we live and consume energy – a shift towards ‘Smart City’ infrastructure – if we are to maximise the benefit of decentralisation and smart technologies. We need to understand what that means both in terms of the energy provisions made within our cities and the wider development of our urban realm. The expansion of energy storage, interconnectors and demand flexibility is where the National Infrastructure Commission sees the potential to displace part of the need for new generating capacity, to save money for businesses and domestic consumers and help the UK meet its climate reduction targets. NIC estimates that the saving could be as large as £8 billion a year by 2030.

But what is a Smart City?

They are being talked about and trialled across the world and seem to span so many sectors and specialisms that it is hard to see who can lead or feed in to their evolution - but we have to start somewhere. We are working in partnership with Bosch to apply Smart City concepts and Bosch technology to the UK in practice and it’s helping us develop a practical understanding of what a ‘Smart City’ could look like from an urban and energy perspective. Underpinning the premise of smart energy in smart cities for example, is the real time balancing of energy demand and supply from aggregated data, to reduce wastage. Bosch’s recent innovation in this area is the development, in partnership with the Berlin grid operator, of a smart grid application which enables supply to be actively and locally managed in response to demand.

Although building-integrated renewables, i.e. solar panels, are more common in the UK, is there scope for city-region scale technologies such as solar farms and small modular reactors (SMRs) to have the flexibility to supply direct as well as to the grid? London has seen substantial investment in district energy in the last 10 years or so, including £114m in 2014 alone (source GLA). Will it be possible to evolve gas-based combined heat and power networks such as those at Kings Cross and the Olympic Park, to connect to a smart grid and use hydrogen fuel cells, such as the one installed in the Walkie Talkie? Crucially, will the emergence of grid scale battery storage see communities/cities selling surplus energy to each other and new business models developing at the city-region scale? We can already see this at the international level; an energy sharing network operates across Europe with consumers trading energy they generate and store in their own homes. Ultimately, with energy generation and consumption in close proximity, a smart city can be both self-sufficient and inter-connected to provide efficient grid balance locally and nationally. There are many more questions than answers, but we believe the innovations emerging within the sphere of smart cities, will have an impact on all our development proposals at some level. It’s a debate we are going to be at the heart of working closely with our clients on delivery challenges, solutions and opportunities. As such, our work with Bosch is set to continue and expand and we look forward to updating you in coming months.

Read the full article in Update Issue 18

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Infrastructure, Smart Cities, Energy