FES 2020 - A new scenario framework

Every year we produce our Future Energy Scenarios (FES),  in-depth analysis of a number of different futures for our energy system. 

Archie Corliss, one of our Strategic Insight Leads, explains how we’ve evolved FES for 2020 to reflect the changes needed to meet the UK Government’s ambitious net zero target and the impact of this on energy supply and demand.  Read on to find out more about the updated framework, why we’ve made these changes and what each scenario means. 

What changes have been made to the FES framework? 

We’ve kept the speed of decarbonisation axis and introduced a new vertical axis: level of societal change. We’ve modelled four scenarios; three which meet or exceed the new 2050 net zero target and one which does not. 

Two of our scenarios meet the target in 2050: System Transformation, which focuses on supply side decarbonisation, and Consumer Transformation which relies on more significant changes in society and how consumers use energy. Steady Progression does not meet the target, while Leading the Way meets the target before 2050 and requires the highest levels of societal change.  

Net zero and zero carbon explained

What does the updated framework explore? 

We use extensive stakeholder feedback to help us decide what’s most important to explore in our Future Energy Scenarios. For the past two years we’ve looked at the speed of decarbonisation and the level of decentralisation (the differences between largescale centralised energy supply options and small-scale local energy solutions). 

The net zero target requires fundamental change across all elements of our energy system and society, but there is uncertainty around various paths to achieve net zero, with some paths requiring different levels of societal change than others.

When looking at FES 2020, we have kept an eye on the speed of decarbonisation, but added a new axis – level of societal change (how our economy will decarbonise).

What are the four FES 2020 scenarios?  

1. Consumer Transformation  - The 2050 net zero target is met with measures that have a greater impact on consumers and is driven by greater levels of consumer engagement. For example, a typical homeowner will use an electric heat pump with a low temperature heating system and an electric vehicle. They will have had extensive changes to their home to improve its energy efficiency and most of their electricity demand will be smartly controlled to provide flexibility to the system. The system will have higher peak electricity demands that will be managed with flexible technologies including energy storage, demand side response and smart energy management. 
2. System Transformation - The typical domestic consumer will experience less disruption than in Consumer Transformation as more of the significant changes in the energy system happen on the supply side, away from the consumer. For example, a typical consumer will use a hydrogen boiler with a mostly unchanged heating system and an electric vehicle or a fuel cell vehicle. They will have had fewer energy efficiency improvements to their home and will have lower engagement with opportunities to use their demand to provide flexibility to the system. Total hydrogen demand is high, and it’s mostly produced from natural gas with carbon capture and storage. 
3. Leading the Way - We assume that GB decarbonises rapidly with high levels of investment in world-leading decarbonisation technologies. In this scenario our assumptions in different areas of decarbonisation are pushed to the earliest credible dates. Consumers are highly engaged in acting to reduce and manage their own energy consumption. This scenario includes the highest and fastest improvements in energy efficiency to drive down energy demand, with homes retrofitted with insulation such as triple glazing and external wall insulation, and a steep increase in consumer participation in smart energy services. Hydrogen is used to decarbonise some of the most challenging areas of society such as some industrial processes, with this Hydrogen produced solely from electrolysis powered by renewable electricity. 
4. Steady Progression - There is still progress made on decarbonisation compared to the present day, however it is slower than in the other scenarios. While home insulation improves, there is still heavy reliance on natural gas, particularly for domestic heating. Electric vehicle take-up grows more slowly, displacing petrol and diesel vehicles for domestic use, however decarbonisation of other vehicles is slower with continued reliance on diesel for heavy goods vehicles. In 2050 this scenario still has significant annual carbon emissions, short of the 2050 net zero target in UK legislation. 

What changes will this mean for GB society? 

While there is a wide difference in levels of societal change between the net zero scenarios, all of them will require substantially more societal change than our Steady Progression scenario. 

Consumers will need greater understanding of how they use energy, the effects of this on our energy system and how to adapt the way they use energy in order to meet the net zero target. Across all scenarios we see a growth in renewable energy generation, including a significant expansion in installed offshore wind capacity, and a widespread uptake in domestic electric vehicles, with the main difference across the scenarios being the rate of this uptake. 

For electrification to be a way to decarbonise the transport sector or other sectors, it’s essential that the carbon intensity of electricity generation continues to reduce before other sectors increase their reliance on electricity. Otherwise, energy consumers are simply moving from one carbon intensive source of energy to carbon intensive electricity. 

Other common elements include a greater role for flexibility services to help manage the variable nature of wind and solar generation.

More information on our Future Energy Scenarios.