National Grid released its annual Future Energy Scenarios (“FES”) report this week, outlining four credible, potential pathways for the future of energy over the next 30 years. There is a renewed focus on how the UK can achieve net zero emissions by 2050, with three of the scenarios showing that net zero can be met (two by 2050, and one by 2047, which National Grid describes as ‘our fastest credible decarbonisation journey’). All of the FES 2021 scenarios have lower emissions by 2030 compared to FES 2020.

What are the key messages we can take from the FES?

  • In order to meet the legally binding 2050 target, detailed policies and focused delivery are needed immediately. Policy decisions must be made on roles of electrification and hydrogen for residential heating, level of support for energy efficiency measures, timings for transitioning away from unabated gas and the extent to which natural gas is used in hydrogen production. In addition, clear roles and accountabilities are needed between Government, regulator and industry.
  • Changes to consumer behaviour, especially how we embrace smart technology, will be pivotal. As lifestyle changes are needed if we are to reach net zero, businesses and Government should engage with consumers early on.
  • Holistic energy market reform is needed to drive investment and behaviour changes, including changes to market and code designs to ensure that flexibility can be harnessed to balance supply and demand across different locations and time periods – from ‘second by second’ to ‘seasonal’. Markets must be designed coherently to deliver optimal investment signals across the whole energy system.
  • Over the coming decade, significant and strategic investment in “whole system infrastructure” will be required. Offshore network development must be coordinated with multi-purpose interconnectors and potentially hydrogen in the future. Onshore network reinforcement will also be needed to avoid constraint costs caused by accelerated renewable connections, interconnectors and increased electrification of heat and transport – or to transition from natural gas to hydrogen. This can be minimised by deploying innovative non-build solutions and integrated planning but remains a key challenge to delivering net zero fairly and at pace. Hydrogen storage will be necessary to support whole energy system security of supply. Given the UK energy system’s complexity, it is clear that policy, market and regulation decisions needed must take the whole system into account.
  • There will be a heavy reliance on low-carbon electricity and storage, with a need for as much as 47 GW of offshore wind and 77 GW of new wind and solar generation connected by 2030, complemented by up to 13 GW of new storage capacity. Even though renewable energy generation is leading the way in carbon emissions reductions already, these are challenging targets.
  • Fossil fuels used without any sort of abatement on their emissions is no longer possible. In the Leading the Way scenario, unabated combustion of natural gas power must cease completely from 2035.
  • Hydrogen is crucial across all scenarios in order to increase grid flexibility and replace some forms of natural gas. In the Leading the Way scenario, there is a mixture of hydrogen and electrification for heating. By 2035, at least 2 TWh of hydrogen storage is required in net zero scenarios to provide whole energy system resilience. Hydrogen will be used for cars, vans and lorries, and aviation and shipping will use hydrogen to some extent in all net zero scenarios.
  • Heat reaches zero or almost zero emissions by 2050 across all scenarios except Steady Progression, the least ambitious scenario. Residential heating and energy efficiency measures are an urgent policy priority, with decisions needed now to cut emissions. In particular, the retrofitting of thermal efficiency measures in homes needs more policy support. In the two scenarios which meet net zero by 2050, the UK will also meet the goal of 600,000 heat pumps per year set as part of the Prime Minister’s Ten Point Plan.
  • As the sector with the largest carbon emissions, transport will need fundamental changes before 2050. Road transport reaches zero or almost zero emissions by 2050 across all scenarios except Steady Progression, the least ambitious scenario. Even in that scenario, all cars on the road will be ultra-low emissions by 2050. The FES highlights that the surge in interest in electric vehicles must be coupled with a change in consumption patterns encouraged by appropriate Time of Use Tariffs. The shipping sector can achieve close to net zero by 2050 through widespread adoption of low carbon fuels, with emissions savings expected from a mix of ammonia and electrification. As we’ve previously reported, the transport sector is looking at various initiatives to hasten emissions reductions (see here and here).
  • As some sectors, including aviation and waste, never reach zero emissions by 2050, we will need solutions that remove carbon from the atmosphere. Bioenergy with carbon capture and storage is the largest provider of negative emissions in all scenarios that achieve net zero, but nature-based solutions like afforestation, reforestation and peak restoration all play a large role in Leading the Way.

The FES highlights just how fundamentally the energy landscape will change in the coming decades, with the UK already on track to exceed its fifth carbon budget. Coordination between policymakers and industry can further the UK’s progress towards achieving net zero, but detailed policy change and societal behavioural change must come now if the challenging targets set out in the FES are to be met.

Blog by Isobel Annan and Emma Andrews