Navigating the path to net zero: Future Energy Scenarios

The energy landscape is undergoing a profound transformation, and at SmartestEnergy, we're keenly focused on the road ahead. With ambitious Clean Power 2030 targets, major reforms under REMA, and the launch of the first revenue support contracts for low carbon hydrogen and carbon capture projects, significant progress is being made. 

However, substantial work remains. By making smart, forward-looking decisions today, we can shape a resilient, future proof energy system, and unlock the full potential of a cleaner, more sustainable future.

The path to a net zero future by 2050 isn't a single leap, but a series of waves of action, each building on the last:

• Foundation (two decades to today): The groundwork has been laid, with significant advancements in renewable technologies and a growing awareness of climate urgency.
• Acceleration (Today to 2030): This is our immediate focus, a period of rapid deployment and policy implementation to hit critical near term targets.
• Growth (2030 to 2040): As technologies mature and policies embed, we'll see widespread adoption and the scaling up of new energy solutions.
• Horizon (2040 to 2050 and beyond): The final push to a fully decarbonised system, with continuous innovation and optimisation.

To successfully navigate these waves and meet our ambitious plans, four critical enablers must be prioritised and accelerated:

Energy efficiency: The unsung hero of decarbonisation

Often overlooked, energy efficiency is a powerful tool in our decarbonisation arsenal. Identified efficiencies across all sectors could potentially cut electricity demand in 2050 by a remarkable 18% (127 TWh). This isn't just about saving energy; it's about reducing the overall burden on our infrastructure and lowering costs for everyone.

However, barriers such as affordability and awareness must be actively addressed to fully unlock these benefits.

• Acceleration: We need robust policies that incentivise and accelerate the widespread adoption of energy efficiency measures across homes and businesses.
• Growth: As demand for technologies like heat pumps and Electric Vehicles (EVs) grows, improving their inherent efficiency will be crucial to managing energy costs.
• Horizon: Embedding optimal operating practices across all sectors will be key to managing costs and demand growth in a highly electrified future.

Demand flexibility: Empowering consumers, strengthening the grid

The ability to shift when and how we consume energy, demand flexibility, offers vast benefits to the entire system. It provides resilience against volatile prices and high costs, while also reducing the need for costly infrastructure investments. By 2050, demand flexibility could reduce peak demand by up to 54%.

The challenge lies in empowering consumers who may find it difficult to shift their consumption patterns. While smart technologies and automation can certainly support this, building consumer trust is absolutely vital. Furthermore, flexibility is inherently linked to access to low carbon technologies and innovation in tariffs.

• Acceleration: Empowering households and businesses through innovative and flexible tariffs will allow them to make informed choices about their energy consumption.
• Growth: Rolling out user friendly smart solutions will help consumers be flexible without compromising their daily needs.
• Horizon: Providing an effortless and user friendly experience for all with the smart technology in place to ensure widespread participation.

Infrastructure and energy supply: A whole system approach

Our energy system is undergoing a fundamental shift in how we produce, store, and utilise energy. The increasing link between electricity, gas, hydrogen, and carbon necessitates a radical change in thinking towards whole-system planning.

In the provided net zero pathways, total installed generation capacity needs to increase by 60-73% from today to 2030, and then double from 2030 to 2050, but its delivery hinges on ensuring infrastructure is in the right place at the right time. This means integrated investment, enhanced flexibility, and a relentless focus on cost effectiveness throughout the transition.

This monumental task must be delivered at pace, while navigating public consent. Strategic energy planning will enable this, and reaching Clean Power by 2030 will set the critical pace for this movement.

• Acceleration: Delivering a clean power system and strategic plans across generation and infrastructure will provide greater certainty for investors and developers.
• Growth: We must build the strategic whole-system energy infrastructure, considering all decarbonisation energy sources and actively pursuing negative emissions technologies.
• Horizon: Continuous innovation will be key to maximising the value of our net zero system, including advanced flexibility solutions and carbon removal technologies.

Switching to low carbon technologies: Accelerating the transition

The widespread adoption of low carbon technologies is non-negotiable. It's how we will reduce unabated fossil fuel use while simultaneously reducing overall consumer energy demand by 47%.

However, the upfront investment and the perceived price of electricity remain crucial considerations for successful uptake, acting as a deterrent to switching to low carbon alternatives. There is a misconception that a renewable future will be a more expensive future, but while the initial costs can be high, the long term benefits are clear. A renewable led system offers energy security and, therefore, a more stable and affordable future. 

• Acceleration: Policies must be designed to actively encourage switching to low carbon sources and accelerate system-wide adoption by working to reduce the price of electricity.
• Growth: Delivering mass adoption of low carbon technologies requires clear investor certainty and supportive market frameworks.
• Horizon: The ultimate goal is to remove all remaining reliance on unabated fossil fuels, leading to significant reductions in both costs and emissions.

While progress is being made, it is clear that change is needed at pace and scale. By focusing on these critical enablers, and working collaboratively across industry, government, and with consumers, we can successfully navigate the complexities of this energy transition. The future is clean, flexible, and efficient, and the time to build it is now.