ETI report shows affordability of a UK low carbon transition

The Energy Technologies Institute (ETI) has released an update of its Options, Choices, Actions report, originally published in 2015, illustrating two cost-optimised decarbonisation pathways for the UK energy system to meet its 2050 climate targets.

Working with the Energy Systems Catapult (ESC) who authored the report, the ETI has updated its ‘Clockwork’ and ‘Patchwork’ scenarios. Modelled on different socio-economic assumptions, in Clockwork coordination by central government means long-term investment in strategic energy infrastructure while Patchwork is based on distinct energy strategies developing at a regional/sectoral level.

In Clockwork, analysis shows an overall industrial growth to 2050 with a continuing but gradual shift away from more energy intensive activities. Combined with a drive towards greater energy efficiency generally, this is anticipated to result in 12% reduction in total industrial energy demand by 2035. After this, efficiency gains are less pronounced but manage to counterbalance growth, resulting in a levelling out of total energy demand. In this scenario, carbon capture and storage (CCS) is deployed to capture emissions from industrial activity and by 2040, around 7mn tonnes of carbon dioxide (CO₂) are anticipated to be captured and stored annually. Meanwhile, an even higher volume of CO₂ is captured upstream during production of hydrogen for industrial use.

Natural gas remains a major fuel for industrial energy use in Clockwork, but the emergence of hydrogen as a significant low carbon energy carrier helps to displace the higher carbon fossil fuels. By 2050, this scenario sees hydrogen accounting for 15% of all industrial energy consumption, ahead of liquid fuel (14%) and coal (3%).

Traditional industries decline overall in Patchwork, as economic activity shifts into high value design and manufacturing, and into a thriving services sector. Combined with efficiency improvements, by 2035 overall energy use for industry is shown to decline 23% from current levels, in this scenario. By 2050 this has fallen 30% relative to today.

Patchwork shows natural gas continuing to play an important part in industry, accounting for 33% of all energy use in the sector by 2050, while electrification accounts for another 33%. While these shares are fairly similar to today, the major difference is in the remaining shares, where liquid fuels decline from today’s 25% share to just 13% in 2050, a contribution eventually matched by hydrogen. In this scenario, biomass and coal play a marginal role providing 5% and 3% of energy respectively.

Scott Milne, Business Leader for insights and evidence at the ESC, says: ‘Most energy system analysis would point to industry as one of the more difficult sectors to decarbonise. Because of this, the updated scenarios aim to inform decisions around how UK industry could transition to a low carbon future, taking the most cost-effective route to decarbonisation based on whole systems analysis.’

‘If energy-intensive industries undergo a slow decline as represented in the Clockwork scenario, it could involve some activity simply being moved offshore rather than truly displaced by other UK activity. This scenario also shows that biomass imports are relied upon to deliver industrial emissions reduction in the medium term, before global competition and associated higher costs limit the amount economically available to the UK.’

‘In Patchwork, we see industry decarbonisation carried forward by the shift in industry composition rather than by technological change, due to the lack of a national strategy on CCS. Nevertheless, as a CCS programme eventually emerges and industry applications are rolled out, this results in 5mn tonnes of CO₂ being captured annually by 2050. Overall, in this scenario, industry emissions fall from around 60mn tonnes of CO₂ today to 26mn tonnes in 2050.’

Commenting on the update, ETI's Chief Engineer, Andrew Haslett says: ‘Since first publishing our Options, Choices, Actions report in 2015 we have seen market developments including the historic signing of the Paris Climate Agreement and a renewed focus for clean growth from the government. Now updated for 2018, this report examines the possible effects of these changes on the originally identified pathways.’

He continues: ‘It is important to stress that Clockwork and Patchwork are not forecasts, but rather two plausible scenarios. Through our modelling analysis over the last decade we believe that by following a balanced, multi-vector approach the UK will be able to achieve its long-term emissions targets while keeping costs to around 1% of GDP in 2050. These scenarios also show that if key technologies are taken off the table, these costs will inevitably rise, potentially jeopardising UK industrial competitiveness and limiting lifestyle choices.’