UKERC Energy 2050:
Key Messages
Costing the Climate Change Bill:
From system models and cost curves to
the real world
Edinburgh, 23rd June 2009
New Conventional Wisdom?
ƒ Electricity decarbonisation is key to the future – it
unlocks potential in other sectors of the economy
ƒ In a low-carbon economy, electricity is relatively
more important – the sector may grow possibly
very substantially
ƒ Electricity use will increase in transport and
buildings – electric vehicles, plug-in hybrids, heat
pumps etc
ƒ Energy efficiency is key to rapid initial progress
Carbon intensity of grid electricity
High level messages
ƒ
Achieving a resilient low-carbon energy system in the UK is
technically and economically feasible at an affordable cost.
ƒ
There are multiple pathways to a low-carbon economy. A key
trade-off is the speed of reduction in energy demand versus
the decarbonisation of energy supply.
ƒ
Reducing energy demand plays brings multiple benefits. It
insures against:
ƒ The possible failure of key technologies to deliver
ƒ Social resistance to the use of certain supply side
technologies
ƒ Price shocks and import dependence
Aggressive promotion of energy efficiency and conservation
technologies is the least cost means of driving down energy
demand
ƒ
The Energy Mix
ƒ
Oil virtually disappears from the energy mix by 2050 in any
80% CO2 reduction scenario
ƒ
In most scenarios, electricity demand is much higher in 2050
than it is now. There are exceptions where demand is reduced
by lifestyle change, energy security, or environmental concerns
about certain generation options action.
ƒ
electricity use is generally down in the medium term future to
2035
ƒ
Nuclear power, renewables and carbon capture and storage
(CCS) can all play a big role in the electricity generation mix
ƒ
Renewables is slower than envisaged in the EU renewable
energy framework
ƒ
Use of electricity and hydrogen, as opposed to bio-energy, in
transport depends on taking a long-term view of investment
Lifestyle Change
ƒ Social and lifestyle change where personal actions are
coherent with socio-political goals could - in principle –
transform energy use in the residential and transport
sectors
ƒ Changes to the way we use energy, along with greater
investment in energy efficiency measures, could reduce
energy demand by more than 50% from baseline levels
by 2050 in these sectors
ƒ Lifestyle changes would dramatically reduce the cost of
reaching CO2 targets (>2% GDP)
ƒ Lifestyle changes would mainly affect the use of oil and
gas, the fuels most vulnerable to price rises and
interruption
Environmental Concerns
ƒ
Reducing CO2 emissions leads, for the most part, to reductions
in other pressures on the environment
ƒ
The exceptions – including radioactive releases, use of water
and land, and some aspects of air quality - are not a rationale
for inaction on a low-carbon economy. Rather they signal areas
requiring regulatory attention
ƒ
Bio-energy raises several environmental issues relating to air
emissions, water availability and land use
ƒ
If public concern about specific supply technologies prevents
their deployment, the cost of meeting CO2 targets will increase
significantly, and more will need to be done on the demand
side.
The Promise of Technology
ƒ
New technologies, and improving the performance of existing
technologies, are critical to achieving long-term CO2 goals
ƒ
Moving from a 60% CO2 target to an 80% target means
technology has an even more important role to play
ƒ
Technologies require a substantially increased long-term
commitment to RD&D, the strengthening of financial incentives
and the dismantling of regulatory/market barriers
ƒ
Much larger levels of investment in energy research,
development and demonstration (RD&D) are justified – but the
balance between early and late stage RD&D and the respective
roles of the private and public sectors need careful assessment
ƒ
De-centralised energy generation is a potentially disruptive
technology whose take-up depends on the interplay of
technology, policy and consumer behaviour.
Resilience and Security
ƒ
A resilient energy system provides energy security by being
able to recover from shocks
ƒ
Resilience requires reduced energy demand, diverse sources of
supply, adequate capacity and reinforcing infrastructure
ƒ
Reducing energy demand is critical – it reduces vulnerability
and the need for investment in supply and infrastructure
ƒ
The goals of energy security and CO2 reduction are linked but
are not identical. A focus on CO2 reduction alone could result in
higher energy demand than would a security-driven policy
ƒ
Further investment in gas infrastructure (storage, LNG) is
needed to maintain reliable supplies, as major disruptions to
gas supply could have impacts measured in £bn, and measures
to mitigate such shocks are available.
Carbon pathways
ƒ
An emphasis on climate change in the energy sector will
prioritise de-carbonisation of energy supply and transformation,
particularly in the electricity sector
ƒ
Progressively more ambitious carbon targets require first
electricity de-carbonisation, then greater energy efficiency in
the built environment and, finally at higher levels of ambition,
the adoption of more radical options in the transport sector
ƒ
Early action on carbon reduction implies taking a longer term
view of investment and being prepared to invest more in
infrastructure and capital-intensive solutions
ƒ
Early action is unlikely to be achieved by measures that simply
set boundary conditions on the market and leave private
investors to choose the mix of technologies