1. Environmental Sustainability in Energy Delivery Steve Wallace Head of Climate Change and Environment

2. Energy Sustainability Affordability (fuel poverty) Environment Security of supply

3. Where does National Grid fit?

4. The environmental challenge Leadership in energy policy Environmental impact from goods and services that are provided to us Providing the infrastructure to decarbonise society Environmental impact from the goods and services we provide Reducing society’s emissions Our role in decarbonising the economy Impact from our services and how we and our supply chain operate Sustainable, low carbon business Emissions and resource efficiency

5. 5  Wind, nuclear & CCS dominant at ~25GW – 30GW each  ~20GW other renewables  ~15GW interconnection  ~20GW embedded generation  LNG & continental imports  Bio-methane Where will our energy come from in 2050? Generation capacity mix ~115GW ~50% from electricity at ~15g CO 2 (e) / kWh ~35% from gas at ~185g CO 2 (e) / kWh ~15% from oil at ~245g CO 2 (e) / kWh

6. 6 Why do we need gas? ~1,000 GWh / day Electricity demand (avg. November day) ~4,000 GWh / day Gas demand (avg. November day) Energy use is ‘peaky’… Full electrification of heat: what you have to believe… ~150 GW of heat electrified = Nuclear?~45 sites at 3.3GW / site Renewables? ~30,000 wind turbines at 5MW / turbine CCS?~75 sites at 2GW / site Solar PV?~40m homes at 17m 2 / home Inter- connectors? ~150 BritNed’s at 1GW each …even after significant energy efficiency GWh Days

7. 7 The transmission delivery challenge (2020) France Netherlands Belgium Norway Ireland France existing electricity network potential wind farm sites potential nuclear sites interconnectors

8. Infrastructure challenge 10’s km of new cable tunnels 100’s km new HV cable 10’s new Substations 100’s new transformers 100’s km of new OHL circuits 1000’s km full refurbishment Nearly 1000km of new transmission pipe new compressor stations new compressor units 2000 km gas distribution mains replacement per year Biogas connections….

9. Right Footprint – The environmental sustainability challenge  Not exceeding the ability of the planet to deal with our emissions without reducing its capacity to do so in the future  Only using replaceable (organic) resources at less than the rate that they can be replaced and without damaging biodiversity  Only using irreplaceable resources in a way that retains their value and ensures that they remain available to future generations  Super sustainability: Put more back than we take out – add to natural capital and repair the damage done by previous generations

10. Guiding Principles  Operating as far as possible within closed loops, conserving and enhancing natural resources  Assigning a proper value to external impacts  Integrating the concepts and tools for environmental sustainability into decision making in an organisation-wide culture of sustainability  Assessing aspects and impacts to focus on those of greatest importance to business and stakeholders.  Openly reporting performance and being held accountable  Working with Government and civil society to create a regulatory and legal environment that rewards sustainable decisions

11. Priority – Greenhouse Gas Emissions Climate Change Strategy Reshaping energy markets Agents for change Ensure National Grid is a sustainable, low carbon business Adaptation ‘greening’ the business 2020 and 2050 targets EE programs and educating customers Fleet procurement, etc Employee engagement Carbon Budgets Executive Comp Carbon price US and UK task forces Supporting Renewables Promoting decoupling Expanding energy efficiency

12. Valuing External Impacts (GHG) Price need to deliver 80% reduction across society £52/$83 per tonne CO2 (e) Regulator supported price and incentives Leadership information to inform debate based on lost opportunities Investment appraisal assessment Investment appraisal assessment and fund Carbon price

13. Linear to Circular Assets Manufacture Into products Procure Stores inventory Issue to site Project delivery Asset life Consumption of resource Raw Materials £/$ value Removal from service RefurbishRecycle Disposal (to be avoided) collectReuse Loss of valuable resource Grey spares  Refurbishment centres  Value preservation Commodity availability risk 

14. Example – Meter Recycling Community Investment in local industry / community Employment and development opportunities via REMPLOY and young offender programme Localised sub contracted activities Reputation Best practice shared with industry players, energy suppliers and internal stakeholders Visible Environmental investment in support of National Grid Policies Realisation of commercial opportunities for National Grid Visible support of I&D agenda Internal recognition as centre of environmental best practice Performance Elimination of hazardous materials to landfill Reduction in carbon emissions £k100’s PA Increased revenue from recycled material £m PA savings from meter refurbishment Savings of circa £k10’s PA from reuse of salvaged components Resources Expanded scope of reclaimed materials Salvaged components reintroduced into supply chain Asset lifecycle optimised Reduction in supply side resources Increased yield via meter refurbishment Efficient use of existing National Grid estate Development of employees

15. Virgin Aggregate Approved Recycled Aggregate Landfill Recycling process Excavation Reducing volume of excavation by no dig or low dig options Residual waste Recycled aggregate to approved specifications Example - Closing the loop in spoil Ideal case is to stop doing the red and minimise the green per unit of main replaced Current performance: 90% recycling road spoil, saving Ca. £6m in landfill tax

16. Striving for Better Regulation  Successful collaboration between Environment Agency and industry  Better regulation initiative  Delivered a solution not a problem  Delivered approximately £1m in savings  Environmental liability managed  Materials re-use of 66% Partington (Hub) Runcorn Warrington Prescot

17. Employee Engagement