Tomorrow’s energy system must be fit for net zero. What does the future hold?

Every year, National Grid ESO’s Future Energy Scenarios publication outlines a number of credible energy possibilities. What’s on the table this year?

The latest report from National Grid ESO sets out what the UK energy system and mix needs to look like for us to reach net zero, including hydrogen and CCUS as a ‘must’.

But what does this mean for heavy industry and commercial businesses? And further, what can they do right now to prepare, invest and take advantage of opportunities?

Readiness

For a start, the report argues that increasing scale, complexity and interdependency of energy conversions from one fuel to another, as well as the importance of flexibility to manage differences in when and where energy is produced and consumed are on the way.

For industrial business, that means adaptability, agility and strong market intelligence will be essential. Smarter energy, energy efficiency and carbon capture and storage systems in are key. Businesses will need to invest time and effort getting up to speed with future opportunities for cheaper, greener energy sources.

Net zero

Crucially, the report believes net zero is achievable. This alone should make big business stand up and pay attention.

But getting there will require immediate action across all key technologies and policy areas, and full engagement, says the report. As mentioned, hydrogen, capture and storage must be deployed, but more crucially for heavy industry, industrial scale demonstration should be up and running this decade.

That means partnerships across the board, for setting up capture tech, getting hydrogen to scale and fundamentally aligning the whole system with business users so it works properly.

Investment and digital

The report argues that the economics of energy supply and demand fundamentally shift in a net zero world. Markets must evolve to provide incentives for investment in flexibility and zero carbon generation. Plus, open data and digitalisation underpin the whole system thinking required to achieve net zero. This is key to navigating increasing complexity at lowest cost.

In a nutshell, this means futurism and agility for businesses. A willingness to see out the old and welcome in the new is going to be pivotal in saving money and aligning a secure, affordable and green business energy network. Spending now to wise up on smart grids and the like seems a no brainer.


Energy clusters and efficiency

National Grid ESO says that decarbonisation of the industrial sector will require a diverse range of actions including energy efficiency and fuel switching. The sector will urgently need energy efficiency and adopting low carbon heating systems.

And, industrial clusters of complementary technologies are part of the solution for net zero. This may mean relocation for some manufacturing plant for efficient use of resources (such as hydrogen) and collaboration between companies within new industrial hubs.

For the commercial sector, decarbonisation is going to rely on increased energy efficiency and a choice between hydrogen and electrification as unabated natural gas is phased out.

There’s a lot to do; in 2018, industrial and commercial (I&C) consumers accounted for approximately 500 TWh of energy demand and 90 MtCO2. This accounts for 31% of total energy demand in the UK (63% of total electricity demand and 39% of total natural gas demand) and a quarter of the UK’s emissions.

A word on transport

National Grid ESO foresees at least 60% of all road transport being electrified. Even in the slowest decarbonising scenario there will be no new cars sold with an internal combustion engine after 2040.

HGVs will be primarily hydrogen, while electrified transport will be achieved through time of use tariffs and vehicle to grid tech.

Virtually every business has a fleet of some sort. So the implications here are huge. Every firm needs to be thinking now about how its wheeled operations will be powered in coming years.


Demand side commercial flexibility

National Grid ESO also sees demand response potential growing. As the market for flexibility increases it develops faster and uptake of smart technology increases. Businesses can expect greater incentives to vary their demand and use/work with power in increasingly flexible ways.


Can it all happen?

According to the report, UK greenhouse gas emissions in 2019 were 480 MtCO2e, and have reduced by an average of 19 MtCO2e each year from 2008 to 2018. A similarly rapid rate of change of more than 15 MtCO2e each year must be maintained from now to 2050 to meet the net zero target.

The whole paper is available for download here, and National Grid ESO welcomes engagement and analysis from UK corporates on our energy futures.

Plainly the central belief is there that net zero and the UK energy transformation are coming. It would be vastly beneficial if businesses up and down the UK begin to think in these terms today, and ready themselves for a truly disruptive few decades before our economy operates within a future-proof energy system.

This system could be cheaper and greener. But business minds need to embrace an era of change perhaps unprecedented since the Industrial Revolution to get there.


Further reading

Making carbon offsetting a real solution to net zero with Hartree Partners – special webinar

Making carbon offsetting a real solution to net zero with Hartree Partners – special webinar

Learn all you need to know about carbon offsetting, afforestation (and deforestation), forest carbon credits and more in this special edition webinar with Hartree Partners.

Tomorrow’s energy system must be fit for net zero. What does the future hold?

Tomorrow’s energy system must be fit for net zero. What does the future hold?

Every year, National Grid ESO’s Future Energy Scenarios publication outlines a number of credible energy possibilities. What’s on the table this year?

Climate Assembly Report: The UK’s first people’s view on Energy for Net Zero 2050

Climate Assembly Report: The UK’s first people’s view on Energy for Net Zero 2050

A look at how the view and recommendations of the energy sector fares in the first UK Climate Assembly path to net zero report.