Decarbonising the UK Energy Market

 Jonathan Brearley, DECC

DECC’s objective is to achieve secure, low carbon, affordable electricity; whilst meeting the UK targets for renewable energy and climate change. The 2050 Pathway Analysis shows that there are a range of ways to do this, but significant challenges for the UK electricity system are apparent. The pathways suggest a need for increased efficiency, a growing role for electricity within heat and transport (resulting in a potential doubling in demand by 2050) and a need to decarbonise the power sector by the 2030s. There are also security of supply concerns, as around a quarter of generating plant is expected to need replacing by 2020, resulting in a huge investment challenge  (£200b of investment needed and £110bn in electricity alone), which must be delivered at least cost to consumers. The current electricity market will not deliver this, so the Electricity Market Reform (EMR) proposes four measures to change the market (carbon price support, long term contracts for low carbon generation, an emissions performance standard and market wide/targeted capacity mechanism). The proposals have implications for the Governments low carbon ambition, security of supply and the cost to consumers.