Welcome to our Future Energy Scenarios (FES) 2021, and thank you for your continued support in its creation.

Based on extensive stakeholder engagement, research and modelling, FES 2021 describes what the future of energy may look like between now and 2050.

As we begin to emerge from the initial impacts of COVID-19, the past year has reminded us all how much our decisions matter in response to global issues – and we’ve also seen how far we can adapt to major changes.

At COP26 in November, the world will be watching as national leaders come together to make firm commitments to tackle climate change – with many countries, including the UK, striving for net zero by 2050. FES 2021’s key messages explain some of the things we need to do now to get closer to that ambition.

Options to download the report and other key FES documents

 

About FES

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. We believe decarbonising energy is possible but also that it will be complex, not least because there are many ways to reach net zero, each with their own trade-offs. ​

Our Future Energy Scenarios (FES) outline four different, credible pathways for the future of energy between now and 2050. Each one considers how much energy we might need and where it could come from. The overall scenarios remain consistent with those in FES 2020 but the details within them are new for 2021 following extensive modelling, research and stakeholder engagement. 

 

Our scenario framework

FES can be used can be used to inform network planning, investment decisions and government policy.

These are our four scenarios:

Four scenarios 2021

 

Learn more about the four scenarios and our journey to net zero

 

Key messages

Our key messages are built around what our analysis suggests is needed to achieve net zero emissions by 2050. 

1. Policy and delivery

Achieving net zero requires detailed policies and clear accountabilities, coupled with an immediate and sustained focus on delivery, to maintain the momentum provided by the Energy White Paper.

What this means

FES sets out different routes to net zero to accommodate uncertainty, but important policy decisions need to be made on:

  • Relative roles of electrification and hydrogen for residential heating

  • Level of support for energy efficiency measures

  • Timings for transitioning away from unabated gas

  • Extent to which natural gas is used in hydrogen production

Competitive markets and strategic planning are both needed to meet net zero. Coordination and collaboration are key when setting policy direction and parameters, whereas competitive markets are the best tool to deliver that policy at lowest cost and to foster innovative solutions.

Clear roles are needed between Government, regulator and industry to facilitate efficient transitions and market changes whilst maximising value to end consumers.

Improvements in energy efficiency of buildings, vehicles and appliances should be a low-regrets policy priority in all scenarios as reducing demand reduces the costs of energy security across the scenarios.

2. Consumer and digitalisation

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.

What this means

Historically, changes to deliver decarbonisation have been on the supply side and largely invisible to consumers. However, to reach net zero there will need to be direct changes to consumer behaviour. What got us here, won’t get us there!

The journey to net zero by 2050 will involve multiple generations of consumers. Improved understanding of how we as consumers can help is required as polling currently suggests a significant gap.

How consumers engage with energy balancing will often be through upfront investment in smart technology that then optimises demand on their behalf (e.g. EV charging patterns). Digital solutions are required to prevent swings in demand caused by multiple smart systems responding to the same price signal.

As smart technologies and innovative business models develop, digitalisation and data will become increasingly important. A balance between open data and privacy must be found to promote trust and to unlock demand side flexibility – while embracing digitalisation.

3. Markets and flexibility

Holistic energy market reform is needed to drive the investment and behaviour changes needed to deliver net zero and ensure security of supply at a fair and reasonable cost for all consumers.

What this means

Changes are needed to market and code designs to ensure that the right kind of flexibility can be harnessed to balance supply and demand across different locations and time periods – from ‘second by second’ to ‘seasonal’.

To attract new market participants, especially from the demand side, and to drive efficient signals, the market design arrangements must prioritise accessibility and competition.

A sustainable route to market is required to ensure the financing of renewable electricity capacity when the majority of generation operates at zero marginal cost. Market rules, processes and data must be transparent to build trust from participants and investors.

Whilst roll-out of ‘time of use’ tariffs is required alongside appliance automation, protection must be put in place to ensure fairness and to shield potentially vulnerable consumers from extreme price volatility.

Initiatives to incentivise new renewable or flexible capacity (e.g. Ofgem’s work on full chain flexibility) must continue to consider the impact on system operability. Similarly, markets must be designed coherently to deliver efficient and co-optimised investment signals across the whole energy system.
 

4. Infrastructure and whole system

Significant investment in whole system infrastructure will be required over the coming decade. This should be optimised to ensure timely delivery and value for consumers. 

What this means

Coordinated offshore network development is required to integrate the target level of offshore wind with the wider electricity system by 2030. This development will also include multi-purpose interconnectors and potentially hydrogen in the future and so may require changes to industry roles and processes.

Onshore network reinforcement will also be required to avoid significant 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 smart and innovative non-build solutions and integrated planning but remains a key challenge to delivering net zero fairly and at pace.

Hydrogen storage is necessary to support whole energy system security of supply as well as to accommodate electrolysed hydrogen at times of excess wind or solar. A strategic approach to its development is required to bring forward investment given the likely lead times involved.

Regional planning work across the electricity and gas transmission and distribution interfaces is required to ensure a fair and coordinated approach to network development and to minimise cost and disruption to end consumers.

The impact of COVID-19

2021 sees us begin to emerge from the initial impacts of the COVID-19 pandemic and, as we do, there is an opportunity to learn lessons about ourselves and society. We have all seen how much our decisions matter in response to global issues – and we’ve also seen how far we can adapt to major changes.  Main impacts:

  • Since the first COVID-19 lockdown, average daily electricity demand has reduced by around 5-10% compared to normal levels (as much as 18% at times during summer 2020).

  • Reasons include less travel, reduced economic activity due to social restrictions and people spending more time at home rather than their normal place of work.

  • Our analysis suggests long term impact is likely to be small. We will continue to monitor the impact of the COVID-19 restrictions and build our understanding into FES 2022.

Explore the report

In the Future Energy Scenarios, we consider the contribution of consumers to the net zero challenge (Consumer View); the ways in which the whole energy system needs to adapt as it transitions to a low carbon future (System View); and the importance of flexibility to the ongoing balancing of the system (Flexibility)

Explore the chapters of FES 2021 to understand how each links to and influences the others.

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Net zero and the Future Energy Scenarios

What net zero really means, the results of our FES modelling and discuss what they mean for the consumer in each scenario.

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Consumer view introduction

The end consumption of energy from three different perspectives: Residential, Transport, and Industrial and Commercial. These three represent the vast majority of the UK’s energy demand and carbon emissions.

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System view introduction

The interactions between energy supply and demand, and the implications of the energy choices presented in the Consumer View chapter. This chapter includes a detailed view of bioenergy, natural gas, hydrogen and electricity supply.

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Flexibility

The importance of flexibility in operating the whole energy system, where the supply and demand of energy needs to be balanced over different timescales.

More from FES 2021

Download the report in your preferred version and check out other available FES resources.

Note: The interactive document will display most effectively when downloaded using Adobe Acrobat.

FES 2021 - interactive copy

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. Read it in full here.

FES 2021 - Print ready copy

This is a non-interactive version of the main FES 2021 document that is optimised for printing or viewing on a tablet or mobile device.

FES in Five

For faster reading, download our FES summary document, which highlights the key headlines and statistics from the full publication.

Downloadable FES resources

On this page you'll find links to the various documents in the FES suite, such as the data behind our graphs or links to related projects.