Future Energy Scenarios (FES) represent a range of different, credible ways to decarbonise our energy system as we strive towards the 2050 target.
We’re less than 30 years away from the Net Zero deadline, which isn’t long when you consider investment cycles for gas networks, electricity transmission lines and domestic heating systems.
FES has an important role to play in stimulating debate and helping to shape the energy system of the future.
Summary of responses to the FES 2023 Call for Evidence
The Call for Evidence closed at the end of October. Thanks to all those that replied. We have produced a summary of the responses we received from stakeholders.
We welcome feedback all year round to: [email protected]
Our key messages are built around what our analysis suggests is needed to achieve net zero emissions by 2050.
Significantly accelerating the transition to a decarbonised energy system can help to address security and affordability concerns at the same time as delivering Net Zero milestones.
- Leading the Way reaches Net Zero in 2047
- Overall end consumer demand reduces by over 40% by 2035 in Leading the Way
- Leading the Way has no unabated natural gas generation capacity after 2035
- Levelised costs of wind and solar are much lower than unabated natural gas generation for projects commissioning in 2025
1. Demand side strategy- The British Energy Security Strategy addresses long term strategic priorities by ensuring greater levels of low carbon energy supply. A corresponding demand side strategy that incentivises more flexible electricity consumption, long duration storage and early hydrogen uptake is also required to avoid significant volumes of renewable energy being wasted during periods of oversupply as well as to ensure capacity adequacy.
2. Energy efficiency - Improving energy efficiency is a no-regrets policy solution that can provide immediate benefits in terms of both affordability and energy security while also facilitating more enduring decarbonisation. A plan to roll out thermal insulation to buildings alongside associated financing is urgently needed to unlock these benefits.
3. Regional focus on heat - A ‘one-size fits all’ approach to decarbonisation of residential heat is not optimal due to differences in consumer preferences, availability of resources and proximity to energy infrastructure. Within a national strategy, delivery of the targeted solutions and investment required by consumers should take place at a more regional level to leverage local knowledge and improve affordability.
Key Message 1: Policy and Delivery virtual session
Consumer behaviour is pivotal to decarbonisation – how we all react to market and policy changes, and embrace smart technology, will be vital to meeting Net Zero.
- 84% of people said that they were concerned about climate change, with 41% saying they were “very concerned” (BEIS Public Attitudes Tracker, Spring 2022, UK)
- 82% of people said they had given either a lot, or a fair amount, of thought to saving energy in the home (BEIS Public Attitudes Tracker, Spring 2022, UK)
- In our scenarios, consumer engagement in smart EV charging ranges from 43% (FS) to 92% (LW) in 2035
- As at the end of March 2022, only 45% of installed energy meters were smart and operating in smart mode
1. Driving change - Significant levels of demand side flexibility are required to operate the electricity system without unabated natural gas after 2035. Suppliers must be further supported to increase the availability of flexible time-of-use-tariffs so that consumers can respond to market signals and benefit from low prices at times of high renewable output.
2. Digitalisation and innovation - Even the most engaged consumers won’t manually adjust their demand in line with prices and so smart digital solutions will be required to do this for them automatically and seamlessly. To facilitate developments in smart technology and better understanding of regional trends, data must be made available to innovators while ensuring that appropriate consumer protection is maintained.
3. Consumer information - Consumers are willing to make changes to meet Net Zero but need to be reliably informed about both how they can help as well as the affordability benefits of low carbon solutions. -Targeted campaigns, led by trusted bodies, are required to provide consumers with the information they need to decarbonise and embrace new technology.
Key Message 2: Consumer and Digitalisation virtual session
Reforming energy markets to improve price signals will help unlock the flexible solutions needed to integrate renewables efficiently.
- Wind and solar generation currently make up 43% of GB energy supply and this rises to at least 66% across the scenarios by 2030
- Annual transmission constraint costs have increased from £170m in 2010 to £1.3bn in 2022 and are expected to continue rising
- In Leading the Way, demand side flexibility reduces unmanaged peak demand by over 40% by 2035
- Consumer Transformation and Leading the Way have more than 115 GWh of electricity storage in 2035 compared to less than 30 GWh today
1. Flexibility requirement - Operating a future energy system with high levels of renewables and no unabated natural gas generation will require significantly more flexible capacity than we have today. Current market signals mean that flexible assets cannot contribute their full value to the system and may at times exacerbate network constraints - the impact of this will only increase in the future if changes are not made now.
2. Locational signals - ESO analysis shows that market reform is needed to provide the dynamic real-time locational signals required to optimise dispatch and siting decisions of flexible capacity on the whole energy system. Improving locational signals has the potential to deliver significant cost savings to consumers without any adverse impact on renewable targets.
3. Market participation - The energy market of the future must harness the vast potential of demand side flexibility to integrate renewables and ensure security of supply at least cost for all. Market changes must facilitate flexible tariffs, support innovation, and reduce barriers to participation for new market entrants from the industrial and commercial sector or in the form of aggregated residential demand.
Key Message 3: Markets and Flexibility virtual session
Strategic investment in the whole energy system is urgently required to keep pace with Net Zero ambitions and strengthen energy security.
- Across the scenarios, at least 31 GW of offshore wind is connected in 2030 with 51 GW in Leading the Way
- At least 15 TWh of electricity is curtailed in the Net Zero scenarios by 2030
- There are over 40 GW of network-connected electrolysers in Leading the Way and System Transformation in 2050
1. Strategic whole system thinking - Delivery of the British Energy Security Strategy requires urgent anticipatory investment to ensure the energy system is not a blocker to Net Zero. Strategic coordination and whole system thinking, especially across the electricity and hydrogen sectors, is required to achieve decarbonisation targets and avoid unmanageable network constraints and potential curtailment.
2. Inter-seasonal storage - The whole energy system of the future will require strategic storage to balance inter-seasonal demand and supply and increase resilience against external security of supply risks. This will include large-scale geological hydrogen and electricity storage projects which must commence now to support an electricity system without unabated natural gas after 2035.
3. Whole system competition - To ensure affordable delivery of new infrastructure, competition in delivery must be established for large projects. Competition is also required at a local level to ensure different regions can adopt the low carbon solutions that are most suited to the needs of their consumers.
Key Message 4: Infrastructure and Whole Energy System virtual session
Watch a recording of our briefing event to mark the launch of the 2022 edition of our Future Energy Scenarios report. Watch a recording of our briefing event to mark the launch of the 2022 edition of our Future Energy Scenarios report.
Future Energy Scenarios 2022 report
The Future Energy Scenarios publication outlines a number of credible energy futures that mean we can continue to support the development of the energy system.
Future Energy Scenarios 2022 in Five
For faster reading, download our FES summary document, which highlights the key headlines and statistics from the full publication.
FES 2022 executive introduction
Since last year’s Future Energy Scenarios, the world has continued to change at pace. The impact from the pandemic is still being felt, while the devastating war in Ukraine is testing supply chains and access to fossil fuels for homes and industry. The past year has sparked recognition of the importance of a faster transition to Net Zero, to support energy security and reduce exposure to volatile international fossil fuel prices, by harnessing abundant renewable and low carbon resources. 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. As a result, the Electricity System Operator (ESO)'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.
The Future Energy Scenarios (FES 2022) sets out credible ways that the UK can achieve Net Zero by 2050, as well as the UK Government’s commitment to a decarbonised electricity system by 2035. Based on extensive stakeholder engagement, research and modelling, each scenario considers how much energy we might need; where it could come from; and how we maintain a system that is reliable.
The choices and actions of consumers are going to have a big impact on how we meet Net Zero targets.
Consumers require energy that is clean, secure, affordable, and fair. This is achievable but relies on urgent and strategic development of networks, markets, and technologies.
Reaching Net Zero greenhouse gas emissions is now widely recognised as critical to the future of our society.
Energy systems need to match supply and demand; we call this energy balancing. Energy system flexibility is the ability to adjust supply and demand to achieve that balance.
With an ambitious target for net zero emissions by 2050, our energy system will need to transform rapidly while continuing to deliver reliability and value for consumers.
Read our latest news and view our recent Thought Pieces written by our team of Insight Leads exploring a range of subjects in greater depth.
The Future Energy Scenarios (FES) Bridging the Gap to net zero project takes a closer look at what needs to be done to set ourselves on the path to net zero.
We believe that there are aspects of decarbonising the whole energy system that are driven mainly by local factors. These cannot be fully understood using only a top-down assessment frame
Download our latest FES 2022 Document suite and check out the archive of older FES documents.