2016 Future Energy Scenarios
What will Britain’s future energy landscape look like? Launched today, National Grid’s 2016 Future Energy Scenarios explore credible pathways up to 2050 and examine how the UK can meet one of its greatest challenges – achieving secure, sustainable and affordable energy for the long-term.
2016 Future Energy Scenarios
“We are in the midst of an energy revolution. The economic, technological and consumer landscapes are changing at an unprecedented rate”
Marcus Stewart, Head of Energy Insights, System Operator.
Fossil fuel generation continues to decline. An extra 5GW will close in 2016, while renewable capacities increased.
Source: National Grid 2016 FES.
The Future Energy Scenarios (FES) set out the potential sources and demand for gas and electricity, how these might change between now and 2050, and the implications for the wider energy industry. The FES are developed following an extensive engagement programme that draws insight and opinion from hundreds of stakeholders across the sector.
The 2016 scenarios are consistent with previous years, retaining the same names while exploring different levels of prosperity and green ambition within four broad futures. They are:
Consumer Power: This is a market-driven world, with limited government intervention. High levels of prosperity allow for high investment and innovation. New technologies are prevalent and focus on the desires of consumers over and above reducing greenhouse gas emissions.
Gone Green: A world where policy interventions and innovation are both ambitious and effective in reducing greenhouse gas emissions. The focus on long-term environmental goals, high levels of prosperity and advanced European harmonisation ensure that the 2050 carbon reduction target is achieved.
Slow Progression: Economic conditions limit society’s ability to make the transition as quickly as desired to a renewable, low-carbon world. Choices for residential consumers and businesses are restricted, yet a range of new technologies and policies develop. This results in some progress towards decarbonisation but at a slower pace than society would like.
No Progression: A world where business as usual activities prevail. Society is focused on the short-term, concentrating on affordability above green ambition. Traditional sources of gas and electricity continue to dominate, with little innovation altering how energy is used.
The emerging themes for 2016
The decarbonisation agenda is having a significant impact on the energy supply market. Traditional sources of supply are being replaced by a far more diverse supply mix. The pace of change in electricity supply is accelerating with a decline in fossil fuel generation, the increased roll-out of renewables and growth in small-scale generation. We are also anticipating an evolution of gas supplies with new sources under development, such as shale, biomethane, bio-substitute natural gas and hydrogen from electricity to gas schemes.
The volume of renewable electricity sources has increased substantially in the past year. Significant progress is still needed in the transport and heating sectors if the UK is to meet the 2020 renewable target on time. The scenarios project that the UK will reach the overall target of 15% of energy being sourced from renewables after 2020, with dates ranging from 2022 (Gone Green) to 2029 (No Progression). The sector requiring the most development is heating.
Action needs to be taken this decade to drive progress towards the 2050 target (an 80% reduction in greenhouse gas emissions from 1990 levels). In line with the views of the Committee on Climate Change, the best route is to decarbonise electricity generation, then to use low-carbon electricity to support decarbonisation in the heat and transport sectors.
To achieve this aim, at least two methods from either nuclear, renewables or carbon capture and storage (CCS) will be vital, while it’s also essential a clear pathway is established to decarbonise heat and transport. To do this most cost-effectively, approximately 25% of heat and transport needs to be decarbonised by 2030.
The importance of gas in Britain’s energy mix has been further emphasised this year. It will play a key role in energy decarbonisation by providing flexible electricity generation and top-up heating over the long-term. In line with the Secretary of State’s energy policy announcement in November 2015, the scenarios have a high level of gas-fired generation. Gas will be a primary heating fuel until the 2040s and will then support electrification of the sector as the most efficient source for top-up heating.
The pace of change continues
Commenting on the rapid changes being experienced in the energy sector, Marcus Stewart, Head of Energy Insights, System Operator, said: “We are in the midst of an energy revolution. The economic, technological and consumer landscapes are changing at an unprecedented rate. Against this backdrop it is impossible to forecast a single energy future over the long term. By providing a range of credible futures in the Future Energy Scenarios, we can be confident that the reality will be captured somewhere within that range.
“I would like to thank all our stakeholders for their engagement with us over the past year. It is their views, knowledge and insight which shape the scenarios and allow us to better understand the uncertainties surrounding the future of energy.”
The contribution of the wider energy sector is a vital ingredient in shaping the FES each year. To have your say and get involved in the debate, visit http://fes.nationalgrid.com, where you can find details on how to participate in future stakeholder events and a wealth of documents, data and insights from previous FES. You can also join the debate on the future of energy on Twitter at #FES2016 and via our LinkedIn group ‘Future of Energy by National Grid’.
Stakeholders from across the energy industry were invited to meet in London to discuss National Grid’s 2016 Future Energy Scenarios (FES).