Table of contents
DOI: https://doi.org/10.58248/HS127
Overview
In memory of our colleague Alan Walker.
Contributors to the horizon scan identified policy to expand low-carbon infrastructure as a topic that will be of interest to parliament over the next five years. This infrastructure includes both renewable energy generation infrastructure as well as that needed to electrify sectors reliant on fossil fuels, such as transport and heating.
Contributors suggested that a systems approach to the delivery of climate change targets could address several challenges including the drivers of energy and material demand, while also promoting economic growth and resilience to climate impacts and geopolitical instability.[1][2][3][4][5]
There are several components to this topic, but at its core is the government’s aim to deliver zero carbon electricity by 2030. The decarbonisation of the power sector is required to meet the UK’s target of net zero greenhouse gas (GHG) emissions by 2050, as set out in the Climate Change Act 2008 (2050 Target Amendment) and the associated carbon budgets that set interim restrictions on GHG emissions over 5-year periods.[6]
Low carbon electricity infrastructure
Fossil fuels made up 29% of the UK’s electricity generation in 2024.[7][8] Meeting net zero targets will require new low-carbon electricity generation to replace fossil fuels.[9] The government set out a transition pathway in the Clean Power 2030 Action Plan. This aims to achieve 43-50 GW of offshore wind, 27-29 GW of onshore wind, and 45-47 GW of solar power.[10]
The Climate Change Committee (CCC), the government’s independent advisory body, predicted in its 2020 report on the Sixth Carbon Budget that most electricity will be generated by large-scale wind and solar energy farms. Additional forms of low carbon energy generation are also likely to be needed including bioenergy and nuclear power.[11]
The move to a low-carbon energy system requires changes to the electricity grid.[12] For example, new grid connections are required to carry power away from wind farms, which are often located in remote areas.[13][14] National Grid, the Electricity System Operator, is undertaking ‘The Great Grid Upgrade’ to carry renewable electricity from generation locations to consumers.
Other contributors argued for more decentralised regional energy grids.[15][16][17] They suggested that local energy system approaches that seek to link the supply and demand of energy services within an area across electricity, heat and transport, may reduce transmission infrastructure needs.[18] Local Area Energy Plans are the main method for translating national Net Zero targets into local energy system actions (PN 703).[19]
The 2023 Energy Act created the National Energy System Operator (NESO) to provide independent advice on energy system planning and operations.[20] NESO’s Clean power 2030 report included recommendations to address planning delays in nationally significant infrastructure projects such as grid infrastructure.
Contributors stated that community benefits for hosting new infrastructure projects are often not well delivered. They argued for more accountability and engagement to engender trust with communities (PN 736), as achieved in Scottish community energy projects. [21][22][23]
Achieving net zero in the wider energy system
The CCC has determined that many sectors currently powered by fossil fuels will need to be electrified to meet the 7th Carbon Budget (2038 to 2042).[24][11]
For example, the transport and domestic sectors account for 40% and 27% of total UK energy consumption respectively, and therefore a significant shift away from fossil fuels will be needed in these sectors.[25][26]
Transport emissions will need to fall by 86% from 2023 levels by 2040. In 2024, 19.6% market share of all new cars registered in the UK were electric vehicles, and sales of petrol and diesel cars are being phased out from 2030.[27][28][29][30]
Some transport types, such as heavy goods vehicles and aviation, will be more difficult to electrify. Alternatives such as biofuels, hydrogen fuel cells or synthetic fuels are being developed (PN616, PN690).[31]
Aviation accounts for around 2.5% of global CO2 emissions, increasing to approximately 4% if non-CO2 effects such as contrail formation are included.[32] The 7th Carbon Budget includes international aviation emissions. Researchers have suggested that a range of measures will be required to achieve aviation emission reductions.[33]
Natural gas currently supplies around two-thirds of energy in the domestic sector and electricity around a quarter, with emissions mainly arising from providing heating and hot water.[34] Energy efficiency measures combined with heat pumps (PN699), heat networks (PN632) and hydrogen are seen as the main alternatives to fossil fuel heating.[35]
There are also GHG emissions associated with the materials and construction processes throughout the whole lifecycle of a building or infrastructure, estimated to account for 11% of global carbon emissions.[36]
The Intergovernmental Panel on Climate Change (IPCC) state that Greenhouse Gas Removal (GGR, PN549) is required to offset the emissions from hard–to–abate energy using sectors, such as aviation.[37] The UK is incentivising GGR technologies that permanently remove CO2 from the atmosphere and capture and store the carbon emitted in geological formation (PN713).[38][39][40] Removal can also be achieved through natural processes such as enhanced rock weathering (PN726).
Challenges and opportunities
The overarching challenge in energy policy is keeping energy affordable for all and maintaining security of supply while transitioning to a net zero system (PN676).
In terms of security of supply, the UK is a net importer of fuels supplied by international markets. Renewables and nuclear power reduce this geopolitical risk.[41][42] Although Russia supplied only a small proportion of UK natural gas, the global natural gas market shock from Russia’s invasion of Ukraine affected the UK energy market.[43] Impacts included energy retailers going bankrupt, large increases in the number of households in fuel poverty and falls in domestic energy consumption.[44]
Compared with countries in the European Union, UK domestic electricity prices ranked fourth highest in the first half of 2024 and prices for both domestic and industrial users were higher than other large economies such as the US and Canada.[45][46] High prices have implications for the government’s ambitions for economic growth and raising living standards.[47]
Contributors suggested that high energy costs for individuals and businesses could be addressed through investment in energy conservation, such as retrofitting buildings with energy efficiency measures. The CCC also stated that low-income households could be provided with support.[48][49] Demand reduction measures (PN 715) could also offer an opportunity to increase security of supply and reduce renewable energy infrastructure requirements (PN 736).
Researchers suggest the transition to renewables may provide an opportunity to lower energy prices in the long term but have initial capital and grid costs.[50][12] The CCC suggest household measures such as heat pumps could lower energy bills if electricity becomes cheaper.[46]
Wind and solar have recently reduced in cost to the point that they are now the lowest cost form of energy generation. Renewables have relatively high capital costs but lower operational costs as they do not require fuels to run.[51]
However, more renewables on the grid requires additional low-carbon, flexible sources of energy storage (PN688), as wind and solar are intermittent forms of generation that vary according to weather conditions. Energy storage can take many possible forms and be chemical (batteries), physical (flywheels), heat or low-carbon fuels (hydrogen).[52][53][54][55][56]
Domestic battery storage allows purchase of cheaper energy when supply is high, such as when renewable energy generation levels are high, for later use when demand is high, such as early in the evening or morning. However, upfront costs may prohibit poorer households from accessing such opportunities to lower bills without financial support or measures such as community scale battery projects.[57][58][59][60] Researchers are exploring how to integrate the next generation of storage technologies into autonomous systems, such as ‘smart’ buildings.[61]
Some commentators state that fossil fuel support measures, such as tax breaks to reduce the costs of production, could be removed to better reflect the costs of fossil fuels and reduce greenhouse gas emissions.[62][63][64][65] The IMF estimated that fossil fuel subsidies globally were $7 trillion in 2022.[66][67][68][69]
Key uncertainties/unknowns
- How infrastructure developers can engage communities to deliver appropriate benefits for hosting projects. For example, small modular reactors can now be built outside the set list of 8 nuclear sites[70] but would require engaging communities with no history of hosting nuclear facilities.
- Addressing the challenges to develop a ‘green skills’ workforce of sufficient scale to deliver the required infrastructure and measures (PN711), such as retrofitting buildings with energy efficiency measures or installing heat pumps (PN699).
- Reaching net zero targets requires measures to enable low-carbon choices by individuals and organisations, such as heat pumps and electric vehicles. This includes the use of trusted voices to communicate messages and different forms of public engagement around technologies, but will differ between contexts (PN714).
- The transition timeline and how long fossil fuels are needed for energy security.[71][72][73]
Key questions for Parliament
- Will existing support schemes for low-carbon infrastructure deliver the low-carbon generation needed to decarbonise the power sector and reach net zero by 2050?
- Is the rate of grid upgrade sufficient to connect new low-carbon generation and reinforce the distribution network for heat pumps and EV charge points?
- Will enough low-carbon flexible storage be built to maintain security of the power system?
- How can social justice and equity issues be addressed in the transition?
Relevant Documents
House of Commons Library, The UK’s plans and progress to reach net zero by 2050
House of Commons Library Briefing, Aviation, decarbonisation and climate change
Energy Security and Net Zero Committee, Industrial strategy for clean power inquiry
Energy Security and Net Zero Committee, Retrofitting homes for net zero inquiry
House of Commons Library, Local area data: fuel poverty
House of Commons Library, What are carbon budgets?
House of Commons Library, Energy efficiency of UK homes
House of Commons Library, Domestic energy prices
House of Commons Library, Help with energy efficiency, heating and renewable energy in homes
House of Commons Library, Delivery of electricity grid upgrades
Planning for net zero, POSTnote 736
Low-carbon aviation fuels, POSTnote 616
Biomass for UK energy, POSTnote 690
Greenhouse Gas Removal, POSTnote 549
Carbon offsetting, POSTnote 713
Enhanced rock weathering: Potential UK greenhouse gas removal, POSTnote 726
Demand side response: A tool for lowering household energy bills, POSTnote 715
Local area energy planning: achieving net zero locally, POSTnote 703
Longer duration energy storage, POSTnote 688
Green skills for education and employment, POSTnote 711
Enabling green choices for net zero, POSTnote 714
References
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