Disrupting the UK energy system: causes, impacts and policy implications

The in-depth analysis presented in this report focuses on four key areas of the economy, highlighting how they may need to change to remain competitive and meet future carbon targets.

• Heat: All approaches for heat decarbonisation are potentially disruptive, with policymakers favouring those that are less disruptive to consumers. Since it is unlikely that rapid deployment of low carbon heating will be driven by consumers or the energy industry, significant policy and governance interventions will be needed to drive the sustainable heat transformation.
• Transport: Following the Road to Zero pathway for road transport is unlikely to be disruptive, but it is not enough to meet our climate change targets. The stricter targets for phasing out conventional vehicles that will be required will lead to some disruption. Vehicle manufacturers, the maintenance and repair sector and the Treasury may all feel the strain.
• Electricity: Strategies of the Big 6 energy companies have changed considerably in recent years, with varying degrees of disruption to their traditional business model. It remains to be seen whether they will be able to continue to adapt to rapid change or be overtaken by new entrants.
• Construction: To deliver low-carbon building performance will require disruptive changes to the way the construction sector operates. With new-build accounting for less than 1% of the total stock, major reductions in energy demand will need to come through retrofit of existing buildings.

The report identifies how policy makersplan for disruptions to existing systems. With the right tools and with a flexible and adaptive approach to policy implementation, decision makers can better respondto unexpected consequences and ensure delivery of key policy objectives.