The key takeaways from this year’s Future Energy Scenarios (FES)
Earlier this month, National Grid ESO released its Future Energy Scenarios 2023 (FES 2023).
FES 2023 sets out a number of credible pathways showing how the UK might be able to achieve Net Zero by 2050, and meet the UK government’s commitment to decarbonising the electrical system by 2035.
Three of the four FES scenarios meet the UK net zero target of 2050.
Key takeaways
FES 2023 continues to follow on from the same scenario framework as FES 2022. This includes using the scenario name, ‘Falling Short’, instead of ‘Steady Progression’ (renamed in FES 2022) for the scenario that misses the UK net-zero targets. This is a clear indication that the National Grid ESO continues to believe that failing to achieve net-zero by 2050 would not be an acceptable outcome.
The impact of last year’s British Energy Security Strategy on FES 2023 has been much anticipated, as some of the modelling for the FES 2022 scenarios was completed prior to the strategy’s publication. Also, FES 2023 is one of the first publications to present the impact of the growing cost of living crisis (observed over the last year) on energy.
Carbon calculations
Changes have been made to the emission calculation methodology in FES 2023 to align with international standards. This has led to a slight increase in historical net GHG emissions under sectors not directly modelled by FES. Further changes in the calculation method (i.e. removal of climate feedback in emissions calculations) have caused a reduction in projected emissions from the sectors not directly modelled within FES, with agriculture seeing the biggest fall.
Electrical Demand
A c.9.5 TWh reduction (from c.294 TWh to c.286 TWh between 2021 and 2022) in electricity demand due to the cost-of-living crisis was reported. Energy demand is expected to continue falling in the short term (until 2024). The consumer transformation and leading the way scenarios state a relatively big jump in demand reduction in the short-term future, by assuming 0.5 and 1-degree Celsius internal (i.e. buildings, homes, etc.) temperature reductions, respectively.
FES 2023 electricity demand forecasts for 2050 are higher than FES 2022 for the consumer transformation and falling short scenarios. They stay similar for the leading the way scenario, and reduce for the system transformation option.
Below is the forecast for 2050.
The drop in electrical demand is largely led by energy efficiency measures, higher building standards, behavioural changes, and demand side flexibility/response, for example. This largely enabled by digitisation, smart technology, and policies.
Equally, growth in electrical demands is largely associated with electrical vehicles, electrification of heat, electrolysis, direct air capture, and data centres. Data centres alone could represent 6% of GBs electricity demand by 2030, in comparison to around 1% today.
Renewables
- By 2050, solar and wind will meet 71% to 84% of annual electricity demand.
- Solar PV: Higher growth in solar PV capacity is expected in the Falling Short scenario when comparing FES 2023 (c. 43 GW) and FES 2022 (c. 34 GW) by 2050.
- Offshore wind: All scenarios in FES 2023 project a higher expected offshore wind installation capacity when compared to FES 2022. ‘Leading the Way’ is the only scenario that reaches the government’s new target of 50 GW by 2030.
- Onshore wind: FES 2023 shows a drop in the expected 2050 capacity due to assumptions that account for uncertainty in timescales, planning policies, inflation, and societal behaviour (i.e. local opposition).
- ‘Leading the Way’ meets the target of 10 GW of hydrogen production (c. 5 GW from electrolysis) by 2030, set out in the British Energy Security Strategy. All net zero scenarios anticipate between c.18 – 22 GW of hydrogen installed capacity by 2050.
- Demand side response is expected to shift over 21% of the I&C and 50% of household electricity peak demand by 2050.
- Electrical Energy Storage: Scenarios are largely similar when comparing FES 2022 with FES 2023. Technologies considered include pumped hydro storage (which today provides almost all our storage volumes), vehicle to Grid (V2G), Liquid Air Energy Storage (LAES), Compressed Air Energy Storage (CAES) and battery storage. All net-zero scenarios project a demand of more than 100 GWh of storage volume by 2050 (excluding V2G). ‘Leading the Way’ shows a potential demand that is just shy of 200 GWh (excluding V2G). V2G could add another c.140GWh of capacity if its full potential is considered, as demonstrated in the ‘Leading the Way’ scenario.
Curtailment
FES 2023 recognises that flexibility options need to be developed in tandem with renewable energy. It should however be noted that FES doesn’t include network capacity limits. It models energy flows on unconstrained networks. Even with that assumption, FES shows that the system transformation scenario has the most curtailment, peaking at almost 65 TWh by 2040.
The impact of network constraints on energy flows can be analysed in various other publications published by the Electricity System operator (ESO), and the distribution and transmission network operators.
Comparison to British Energy Security Targets
National Grid envisions a continued transformation of the current energy market to create a smart, flexible, and green energy system. We regularly challenge the status quo and work with all of our clients to consider a number of whole systems energy solutions.
The FES 2023 further helps us to continue the narrative on why our clients should consider transformative changes at scale to help reduce their climate impact.
We continuously work to help clients understand the technical and economic feasibility of future energy systems and guide them in making green and profitable investment decisions.
How can RPS help?
With technical experience across the large-scale wind, solar, tidal and hydro, geothermal, energy storage, hydrogen and carbon capture and storage in addition to bespoke ‘behind the meter’ solutions, we’re committed to enhancing global energy security through clean infrastructure that is high yield and low-impact, at scale.
We offer a range of services to support this growing market. This includes planning and approvals, energy advisory, deal advisory, environmental management, community engagement, meteorology and oceanography, engineering, and site investigations.
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