FES is not just another market report. It’s the product of in-depth analysis by our team of experienced analysts and collaboration with more than 600 stakeholders and industry specialists. The analysis is a continuous process, carried out throughout the year. It considers Britain’s energy over the next 30 years, across electricity and gas – examining where this could come from, how it needs to change and what this means for consumers, society and the energy system itself.
It’s intended to stimulate debate rather than provide definitive predictions, but it does outline four key themes.
Reaching net zero carbon emissions by 2050 is achievable. However, this requires immediate action across all key technologies and policy areas.
Under the Climate Change Act 2008, the government had a target of reducing carbon emissions by 80 per cent by 2050, compared to 1990 levels. However, under the terms of recent legislation, the government has recently committed to reaching net zero carbon emissions by 2050. This makes the UK the first member of the G7 group of industrialised nations to legislate for net zero emissions – an exciting challenge for the energy industry.
While initial decarbonisation targets can be reached through multiple technology pathways, net zero requires immediate “no regrets” action. Both energy efficiency and carbon capture, usage and storage (CCUS) will be needed at a significantly greater scale, with the widespread production of low-carbon hydrogen and the use of low-carbon heat for industrial processes. On top of this, the use of negative emissions technology will be required to offset the carbon emissions for processes that are very difficult to decarbonise.
Heat decarbonisation pathways are uncertain and vary by region. However, there are clear, urgent no-regrets actions that can remove barriers to deploying solutions at scale.
By 2050, up to 85 per cent of homes need to be very thermally efficient, rated to EPC class C or higher. Multiple heat decarbonisation pathways are possible, including electrification, decarbonised gas and hybrid systems. However, optimal solutions will vary by region and the combinations and interaction of these technologies must be considered to provide a flexible, operable and sustainable whole energy system.
Electric vehicles (EVs) can help decarbonise both transport and electricity supply for Great Britain.
EVs not only help to decarbonise transport, they could also enable the growth of renewable electricity generation. Through the use of smart charging, EVs can be charged when there’s a plentiful supply of electricity from renewable generation such as solar and wind. By doing this, up to a fifth of Great Britain’s solar generation could be stored in electric vehicle batteries, and used at a later time as needed.
By 2050, over 75 per cent of EVs could be using smart charging, but investment in infrastructure is needed to support the increasing number of EVs. From our research, we found that the timing, location, and frequency of EV charging varies more than previously assumed. With this in mind, a smart and flexible system will need new business models and services to match system needs with EV charging requirements and consumer preferences.
A whole system view across electricity, gas, heat and transport underpins a sustainable energy transformation. Widespread digitalisation and sharing of data is fundamental to harnessing the interactions between these changing systems.
Existing interactions between gas and electricity networks will increase as gas generation provides more flexibility, and new technologies such as electrolysis and hybrid heat systems create new interfaces between electricity and gas systems.
It’s an exciting time for the industry and we’ve never had a better opportunity to drive change. Our ambition is to be able to operate the electricity system at zero carbon by 2025. It’s exciting and ambitious, but there is no doubt significant changes are required. That’s why FES is so important – these scenarios can help the industry to better understand the challenges it faces, and assist our customers and stakeholders as they make long-term decisions. We look forward to continuing the conversation.