This report takes a whole systems approach to the development of the UK energy system over the next 40 years.
Achieving a resilient low-carbon energy system is technically and economically feasible at an affordable cost.
There are multiple potential pathways to a low-carbon economy. A key trade-off across the energy system is the speed of reduction in energy demand versus decarbonisation of energy supply. There is also a number of more specific trade-offs and uncertainties, such as the degree to which biomass, as opposed to electricity and perhaps hydrogen, is used in transport and other sectors.
Deploying new and improved technologies on the supply side will require substantially increased commitment to RD&D, the strengthening of financial incentives and the dismantling of regulatory and market barriers. A major increase in efforts to accelerate thedevelopment of emerging low-carbon energy supply technologies promises significant reward, in terms of more affordable decarbonisation pathways, in the long term.
Increasing the uptake of existing and cost-effective energy efficiency and conservation technologies will reduce the welfare costs associated with demand reduction.
A resilient energy system needs a range of measures, but reducing energy demand is key. This will reduce our exposure to energy price shocks and could help us to ride out major disruptions to infrastructure.
Changes will be needed to market design and regulation to facilitate the move to a resilient low-carbon energy system.
Lifestyle changes that reduce energy demand would enhance energy system resilience and reduce the costs of CO2 reduction. Further work is needed to assess how such changes might be induced and the role that policy could play.
If public concern about specific technologies prevents their deployment, the cost of meeting CO2 targets will significantly increase, and a greater burden will be imposed on demand side responses.
Reducing CO2 will broadly lead to improvements in other environmental areas, but regulatory attention may be needed in some areas (air quality, water stress) where there are potentially adverse effects.