'Achievable if we work together': How the UK could deliver a net zero emissions energy system by 2047

Influential Future Energy Scenarios report stresses how policy and investment choices could see net zero goal reached early – or missed entirely

The UK could deliver a net zero emission energy system by 2047, if business and policymakers work together to ramp up demand-side solutions, such as energy storage systems and flexible grids, use technology and consumer engagement campaigns to promote energy conservation, and take a Whole-system approach to investment in low carbon infrastructure and clean energy technologies.

That is the headline message from National Grid Energy System Operator’s (ESO’s) latest Future Energy Scenarios (FES) report, the annual modeling exercise which explores how the decarbonisation of the UK’s energy system could pan out between now and mid-century, taking projected supply , demand, and the pace of technological innovation and social change into account.

In the most ambitious future energy scenario set out in the FES report, dubbed ‘Leading the Way’, the UK is expected to meet its legally-binding net zero target three years ahead of schedule, in 2047. The energy system would, by 2050 , be a net absorber of carbon emissions technologies, with investments in carbon removal compensating for all residual emissions from the heat, power, and transport sectors, and then absorbing a further 30Mt of emissions from the atmosphere annually. The heat and road transport sectors would be largely decarbonised, and the power sector would achieve net negative emissions as early as 2033.

But for this outcome to be achieved, high levels of consumer engagement will need to combine with significant investment in a range of existing and nascent clean energy technologies, from carbon removals and hydrogen to electrification and energy storage, according to the report.

In contrast, under the slowest decarbonisation scenario set out in the report, renamed this year as ‘Falling Short’, the UK economy would fail to reach net zero emissions by its 2050 deadline. By mid-century, energy sector emissions would be reduced by almost 80 per cent on 1990 levels but the sector would continue to be a net carbon emitter, generating some 186 Mt of annual emissions. Such a scenario would see the energy sector continue to rely on some unabated gas generation, whilst the road transport and heat sectors would also decarbonise more slowly. Even the power sector would only reach net zero by 2046 – some 13 years later than under the ‘Leading the Way’ scenario.

The other two scenarios detailed in the report – ‘System Transformation’ and ‘Consumer Transformation’ – would both see net zero emissions delivered by 2050, with the former focused more heavily on the deployment of emerging hydrogen technologies, including for heating, alongside supply- side flexibility measures, while the latter pathway centers on electrified heating and a quick transition to energy efficient homes, supported by demand-side flexibility.

Writing in the foreword to the 237-page report, the Electricity System Operator’s executive director, Fintan Slye, stressed that transitioning to a decarbonised energy mix would unlock myriad benefits for the UK, ranging from smaller energy bills for households and jobs in emerging clean energy industries, to reduced reliance on foreign supplies of energy. “In the grips of a cost-of-living crisis, it is crucial that we never lose sight of the consumer while also focusing on delivering the broader societal benefits that can come from the transition,” he wrote. “As a result, the Electricity System Operator’s mission has never been more important: to drive the transformation to a fully decarbonised electricity system by 2035 which is reliable, affordable and fair for all.”

He added that it was the ESO’s responsibility to provide a vision for how the decarbonisation of energy in UK could take place, as the government works to establish a new independent Future Systems Operator tasked with taking a whole-systems approach to network planning and decarbonisation. “As custodians of this vital public service, and as we transition to the Future System Operator, it is our responsibility to clearly explain the impact we think that various energy scenarios will have now and in the future,” he said. “Overall, the UK’s net zero timetable is achievable if we work together, however there are many ways to get there. Delivering it will require a strong partnership between industry and policymakers, and full engagement across society and consumers.”

The report said measures outlined by the more ambitious pathways in the FES report that would help the Energy Security Bill, introduced to the Commons earlier this month, meet its objectives. The report comes as the UK government today launched a major review into Britain’s electricity market design, dubbed the Review of Electricity Market Arrangements, which will see Ministers consult on proposals to reform pricing mechanisms on wholesale power markets and encourage the roll out of smart grid technologies and services.

National Grid ESO’s report sets out a string of recommendations for how industry and policymakers can work together to its more ambitious decarbonisation achieves scenarios, calling on Ministers to publish a ‘demand-side strategy’ to complement the recent British Energy Security Strategy, which focused on ramping up supplies of domestic energy generation. It argued that a separate demand-focused strategy could incentivise more flexible electricity consumption, long duration storage and hydrogen uptake, drive investment in energy efficiency measures, and ensure renewable energy generators are used to their maximum potential.

The report also calls for a major nationwide rollout of thermal insulation in buildings as well as “associated finance” that would turbocharge the decarbonisation of buildings and shrink household energy bills. And it counsels Ministers to avoid a ‘one-size-fits-all’ approach to decarbonising heat, noting that delivery of solutions and investment should take place at a more regional level so that differences in consumer preferences, availability of resources, and proximity to energy infrastructure can be taken into account.

National Grid ESO has also set out a number ways business and government can work to drive changes in behaviour, which it stresses is a critical plank of a successful net zero transition. Proposals include the roll-out of time-of-use tariffs, the introduction of smart digital solutions that can help consumers reduce their energy demand with minimal effort, and targeted consumer information campaigns around saving energy and adopting low carbon solutions.

“In practice, we need to generate economy-wide solutions to help investment in the infrastructure across GB to onboard booming renewable generation,” Slye wrote. “As an entire industry we need to inform and support consumers about straightforward ways to reduce their energy bills – with energy companies ensuring the best tariffs are readily available. We need reform of the GB energy market, to ensure we can best utilize the low- cost, low-carbon electricity where and when it is available.”

Finally, ESO has today called for a strategic and coordinated investment program that takes the whole energy system into account, especially across the electricity and hydrogen sectors which will be crucial to decarbonising multiple industries. It also calls for an approach that fosters “whole system competition” for new infrastructure projects to help bring costs down and argues that market reform is needed to unlock much-needed flexibility solutions that can ensure renewable assets are contributing their full value and can be integrated seamlessly to the grid.

The FES report is focused on the energy sector, covering the electricity, fossil gas, and future hydrogen networks, as well as the industries and households they supply power and heat to, and “non-networked energy” such as petrol and diesel transport, aviation and shipping, and off-grid gas. But it warns that a “whole economy view” that takes into account emissions intensive industries, such as waste, forestry, livestock, and agriculture, is critical when plotting how to meet climate goals. Any net negative emission capacity delivered by the energy sector by 2050 will likely be used to offset these adjacent sectors, it notes.

Not for the first time, National Grid ESO sees an important role for bioenergy and carbon capture and storage (BECCS) in all three of its net zero scenarios, noting that the controversial technology will be crucial to delivering a net zero energy system in both 2035. and 2050. But it does concede there are “important considerations” around bioenergy, including questions around the sustainability of feedstocks, how carbon generated during the process of burning crops should be captured and accounted for, and land use trade-offs. As such, it has assigned a smaller role for BECCS in its most progressive scenario, with the resulting procurement in projected negative emissions made up through direct air carbon capture and storage (DACCS) technologies and a larger role for natural carbon sinks that can be expanded through land use, land use-change and forestry (LULUCF). However, the pathway still relies heavily on BECCS, mainly for the power sector, for more than 30 per cent of its negative emissions by 2050.

The wide-ranging report is published on the same day as the industry association for the energy sector, EnergyUK, called on the government to ensure any reform of the electricity market should prioritise creating a “stable environment” for much-needed investment in clean energy infrastructure over the coming years.

Similarly to the ESO, it has called for the transition to a more “dynamic” energy system that incentivises flexible technologies, and reform of the wholesale market to improve efficiency and minimise system costs. Incremental changes, such as to charging, could be introduced initially, the report said, while the case for longer-term reform such as locational pricing was being assessed.

Adam Berman, deputy director of Energy UK, said the document set out “initial priorities and proposals” for how the government could reform the electricity sector to accelerate the net zero transition while curbing costs. “The electricity sector is in a period of profound change,” he said. “The rapid expansion of low-cost renewables has created massive opportunities for decarbonising the sector whilst bringing with it the challenges of managing variability. Without sensible reforms to the power market, the UK will risk not achieving its climate and energy security targets.”

Echoing the conclusions of the ESO, Berman added that the design of the power market needed to be made “fit for a future where we need to meet a huge increase in the demand for electricity, reach ambitious energy security and climate change targets, and have the flexibility to get the maximum benefit from our low-cost renewable generation”.

Calls from the energy industry for increased investment in demand-side solutions and technologies, a whole system approach to clean infrastructure investment, and behavior change measures are not new. But with the Energy Security Bill currently making its way through the Commons against a turbulent political backdrop, a cost-of-living crisis and the prospect of a Prime Minister less engaged with the net zero agenda, the calls for market reform from both ESO and EnergyUK are more pertinent than ever. It remains to be seen whether the next Prime Minister will heed the industry’s calls and take action that transforms the energy sector from a net carbon emitter to carbon sink, leading the way instead of falling short.

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