This year’s Future Energy Scenarios (FES) have undergone a monumental reworking to bring them in line with the significant changes made across the energy industry over the past twelve months.
National Grid ESO itself has said it's made “some ground-breaking assumptions”, breaking down and re-configuring three of its scenarios so that they meet our legally-binding net zero by 2050 target.
Gone are Consumer Evolution, Two Degrees and Community Renewables, having been eliminated by the shiny new kids on the block: Consumer Transition, System Transition and - perhaps most excitingly - Leading the Way scenarios, the latter of which finds a way to do just that, meeting net zero by 2048.
This has, of course, been a long time coming. The timing of then-Prime Minister Theresa May's commitment to legislating for net zero - June 2019, the month before the FES is published - left little room for a complete reworking of the scenarios with the ESO then scrambling to put something together on net zero.
Even the Committee on Climate Change’s net zero report urging the government to adopt the target had only been published in May that year, so the fact a chapter of the report on net zero sensitivity analysis was written is a commendable feat.
Twelve months on, and there’s been the time to adapt the FES to really focus in on net zero. It came barreling in, fresh-faced and ready to be the star attraction, just to find that a new behemoth had entered the ring to shape the energy industry. And not just the energy industry - this one would affect the entire economy. Like net zero, it did come in a little too late for it to really make an impression on the FES, but also like net zero it is expected to form a key part of the following FES.
I am, of course, talking about COVID-19.
Whilst it was barely more than a footnote in the FES this year, it will certainly make the FES 2021 a captivating read. Its effect on the grid has been stark, forcing National Grid ESO to adapt a number of its processes to try and deal with the unprecedented changes in demand.
It will be worth keeping an eye out to see what those changes to demand along with the corresponding slowdown of certain industries and delays to many renewables projects will mean for reaching that all-important 2050 target and if it will have any effect on next year's scenarios.
The energy industry has seen great transformation since FES 2019, net zero was a gamechanger and the industry, large parts of which were already going guns blazing to decarbonise, was catapulted into further action.
Government support also increased in certain areas, although, as highlighted by the most recent Budget - which only saw announcements made for electric vehicles, nuclear and CCS - it is still severely lacking in other areas.
Heat has historically struggled to make itself heard, with the general consensus being that it will be one of the trickiest areas to decarbonise. However, there have been some announcements made and a scaling up of ambition, with policies such as the replacement of the domestic Renewable Heat Incentive with the £4,000 Clean Heat Grants announced, as well as £80 million to help reduce carbon emissions from homes that includes plans to develop heat networks.
In 2019 the ESO recommended rolling out at least 2.5 million domestic heat pumps by 2030. In its 2020 version, it stated how up to 20 million heat pumps could be installed by 2050, with as many as 8 million homes actively managing their heating demands by storing heat and shifting their use outside of peak periods.
A greater decarbonisation of heat does, however, require social change. Consumers will have to open their homes and pay for the retrofit, even if it's partly subsidised by a government grant, and as we move closer to net zero they will have to adopt smart controls for their appliances. It’ll likely take a greater education piece as well as financial incentives, but it is a critical element of the net zero journey and one that can't be ignored.
Societal change is so much at the heart of this transition it resulted in a paradigm shift in the FES, with the level of change included as a new scenario framework. How engaged consumers are has a fundamental effect on which technologies can be deployed and how fast that shift to net zero can occur.
The most ambitious scenario sees consumers having to adopt a “significant” lifestyle change. However, it just takes a look at the smart meter rollout to understand what a difficult task this may be. Slow, delayed and often met with “what’s the point?” despite multiple government TV adverts attempting to address that very question, it’s clear from that rollout alone that getting consumers to change the fundamentals of their homes is easier said than done.
There are, however, other signs of consumers willingly engaging with the transition, such as the rapid increases in the first half of this year in sales of new electric cars. There are also other scenarios in the FES – namely System Transformation – that reach net zero without a huge disruption to consumer’s lives.
The changes to the FES are indicative of a changed world. There are now three decades until 2050 and technology choices will soon have to be made to allow for investment in the technologies themselves as well as networks and other elements such as flexibility services.
The FES may only be an idea of scenarios that could reach this target, but it reflects an obvious shift in ambition as the goal itself is made more ambitious. The scenarios have been beefed up and the message is clear: a 2050 net zero is possible, but let’s crack on with it before its too late.