UK energy transition falling short due to lack of “whole system” thinking, DNV report finds

DNV issued its annual Energy Transition Outlook (ETO) for the UK, finding that the UK’s energy transition risks being delayed by a lack of “whole system” thinking.

  • UK remains global decarbonization frontrunner but will miss 2030 clean power target, 2035 Nationally Determined Contribution (NDC) and legally binding 2050 net zero goal
  • Fossil fuels to represent 15% of primary energy supply by 2060, compared with 75% today
  • Emissions to reduce 33% by 2035; half of what’s required to meet NDC
  • Country to reach 107 GW of renewables by 2030, but will still rely on unabated gas
  • By 2060, imports will stand at 15%, with renewables meeting 60% of final energy demand
  • Data centre electricity demand rises from 8 TWh today to 70 TWh by 2060

The main findings from this year’s ETO indicate that the country is transitioning fast – but not fast enough to hit the UK’s decarbonization targets, namely Clean Power 2030, Nationally Determined Contribution (NDC) 2035 and net zero by 2050.

Indeed, the forecast suggests the UK will fall short of its 2035 NDC target (agreed in Paris in 2015), with emissions reduced by only 33%, roughly half of what is needed to achieve the goal. Buildings and transport demand remain the biggest blockers, with two thirds of UK homes predicted to still be using gas boilers, and more than half the cars on the roads remaining fossil fuelled in 2035.

According to the report, which highlights how the country remains a decarbonization leader globally, the UK will not achieve net zero by 2050 and will still emit 130 MtCO₂e (million metric tons of carbon dioxide equivalent) per year, an 84% reduction from 1990.

Hari Vamadevan, DNV
Hari Vamadevan, Senior Vice President, and Regional Director, UK & Ireland, Energy Systems, DNV

“The dilemma we face is to balance the energy system whilst in transition. Polarized views can obscure the fundamental reality that the energy sector is deeply intertwined, meaning that it is a monumental challenge to prioritize one area over another unless we take into account all parts of the energy system and the adjacent areas like socio-economic developments, nature and bio-diversity,” said Hari Vamadevan, Senior Vice President, and Regional Director, UK & Ireland, Energy Systems, DNV.

“It is not a case of renewables versus oil and gas, it is not supply versus demand, and it is not generation versus transmission – it is all these facets combined to drive a cleaner energy future. Quite simply, we are risking progress by siloing debates around the energy transition, focusing narrowly on individual elements rather than the whole system.

“The UK is making undeniable progress in transforming its energy system, continuing to cement its place as a world leader in decarbonization, but the pace is not yet aligned with climate ambitions, with our outlook forecasting the UK to run on clean electrons by 2060. Our forecast shows strong long-term structural shifts, from falling energy demand to a steep decline in fossil fuel use by 2060. However, without accelerated action in buildings, transport and clean power deployment, the UK risks missing its 2030, 2035 and 2050 targets.”

Sarah Kimpton, DNV
Sarah Kimpton, the report’s co-author and DNV’s Energy Transition Director

Sarah Kimpton, the report’s co-author and DNV’s Energy Transition Director, said: “What this report outlines is that addressing the energy trilemma and balancing the energy system demands integrated solutions that span technology, infrastructure, policy and behaviour. A clean energy future is not achievable by operating in silos.

“Allocation Round 7 (AR7) has proved the art of the possible when everything aligns, with 14.7 GW awarded across all renewable projects. That wasn’t by chance: that was through connected government policy and business objectives.

“Despite not being on track for these targets, we should remember the UK’s energy transition is moving faster than that of many other countries, whilst facing the same political uncertainty.”

DNV finds that while the 2030 Clean Power aim is closer, the UK will still significantly rely on gas. The country will double its wind and triple its solar capacity within the next four years, reaching 107GW of variable renewables, but will still require unabated gas for 15% of its electricity generation.

Longer term, wind, solar, nuclear and other renewables will provide 85% of low-carbon energy by 2060, with imported fossil fuels supplying the remaining 15%. Energy security, meanwhile, will rest not on imported fuels but on domestic generation, storage and flexible demand.

By 2050, despite not reaching net zero, energy demand will have fallen by a quarter and the UK’s primary energy supply will continue to shift away from fossil fuels to low carbon sources, with the former representing 15% of primary energy by 2060 (versus 75% today). In terms of data centres, electricity demand will rise from 8TWh today to 70 TWh by 2060.

The decarbonization of the UK economy is, however, affordable and average house bills are expected to reduce by 20% compared to 2021 levels.

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