Future energy scenarios 2019

Energy analysis: This analysis looks at the government’s 2019 Future Energy Scenarios (FES) report, published on 11 July 2019. The annual FES sets out a number of credible scenarios for the future development of the GB energy system. This analysis, written by the LexisPSL Energy team, consider some of the key limitations of the FES and what is likely to be required to beat the ‘2050 target’ of an 80% reduction in carbon emissions against 1990 levels or to achieve net zero emissions.
Original news

Net zero carbon emissions by 2050 is ‘achievable’ with ‘immediate action,’ LNB News 11/07/2019 103

The future energy scenarios (FES) report for 2019 has been published, concluding that reaching net zero carbon emissions by 2050 is ‘achievable’ but this requires ‘immediate action across all key technologies and policy areas.’ The FES report provides an overview of key areas in decarbonisation and is published to stimulate debate to influence decisions surrounding carbon reduction and the future of the energy system. The analysis also presents an approach to achieve the net zero emission target, which includes action on electrification and transforming the gas system to accommodate hydrogen.

What is Future Energy Scenarios 2019?

National Grid—in its role as ‘system operator’ for the gas and electricity systems—produces a ‘future energy scenarios’ (FES) document every year. The annual FES sets out a number of credible scenarios for the future development of the GB energy system. These scenarios assume different levels of decentralisation (ie generation not being connected to the transmission system) and decarbonisation.

All scenarios:

  • are GB wide, but include regional variations in how the energy landscape could develop, where evidence is available
  • take a ‘whole system’ view, exploring a future where the different parts of the energy market work together in new ways to maximise efficiency and value for consumers
  • include a mix of technologies, but show different levels of adoption
  • model progress from today to 2050

Of the four scenarios presented in FES 2019, two meet the ‘2050 target’ of an 80% reduction in carbon emissions against 1990 levels. National Grid also considers that ‘net zero’ is achievable by 2050, but that this requires much greater action, and at more significant scale, than envisaged in any of its core scenarios.

What are the limitations of FES 2019?

FES is intended (in National Grid’s words) to ‘help us to better understand the range of uncertainties, and assist our customers and stakeholders as they make long-term decisions.’ But the scenarios are ‘not in themselves forecasts of expected pathways. The actual pathway could be a combination of each of these four scenarios and the scenarios should be used as a set.’

We have therefore looked at the common themes highlighted by National Grid across the set of scenarios provided:

Strong growth in renewables is required to beat the 2050 target or to achieve net zero

All of the scenarios envisage increased offshore wind capacity, with the 2050 target-beating scenarios requiring ‘strong growth’ in other renewables, including onshore wind—all scenarios include new microgeneration (such a small wind turbines and solar panels) as decentralisation increases.

National Grid considers that in order to achieve net zero, the electricity system will ultimately need to operate using only zero carbon generation (although it should be borne in mind that this includes nuclear generation), and that carbon capture, usage and storage (CCUS) is essential across several sectors including hydrogen production, power generation and industry.

Decarbonisation of heat requires improved thermal efficiency in housing stock and widespread adoption of heat pumps

National Grid considers that immediate steps can be taken to decarbonise heat, which are common across all scenarios. These include improving the thermal efficiency of homes so that the majority are rated at EPC Class C or higher by 2030 (with up to 85% meeting this standard by 2050) and increasing appliance efficiency standards. Optimal solutions will vary by region, but National Grid also considers that at least 2.5m domestic heat pumps need to be rolled out by 2030 in order to achieve net zero.

‘Smart’ charging of electric vehicles could provide system flexibility and more efficient intermittent renewables

National Grid estimates that ‘smart’ charging vehicles could enable the storage of roughly one fifth of GB’s solar generation for when this energy is needed, but notes that a smart, flexible system will need new business models and services to match system needs with vehicle charging requirements and consumer preferences. To state the obvious: it is unlikely to be helpful to a consumer if their car battery has released its charge back onto the grid before they need to begin their commute. It is also noted that the infrastructure necessary to support electric vehicles (ie charging points) is critical to the success of this plan.

There needs to be a ‘whole system’ approach, and the whole system needs to be smarter

In order to transform the energy system, a ‘whole system’ view needs to be taken across electricity, gas, heat and transport—National Grid considers it is necessary for there to be widespread digitalisation and sharing of data between participants in these systems in order to harness their interactions—electric vehicles being a prime example.

What does this mean for energy lawyers?

As noted above—FES is not a prediction or a forecast. The fact that there are a number of common themes across the scenarios explored suggests that these trends may emerge in a number of possible environments. And the assumptions National Grid has used to build these environments are available on the FES website, and appear reasonable. But they are nevertheless assumptions, and must be weighed in light of the evolving political and economic landscape (in which National Grid itself is of course an interested party).

For more information on the current political landscape, see: [Great Britain energy market—policy and policy implementation tracker]

Filed Under: Energy

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