A path out of the gas crisis

New analysis shows Britain can cut gas from the power sector by the end of the decade, with huge cost savings from switching to renewables.

Phil MacDonald

Managing Director (Interim)

23 September 2022 | 20 min read

Highlights

The UK power sector can transition from ~40% gas reliance to just 1% by 2030

£93bn

Potential cost saving through avoided fossil gas consumption

About

The report sets out a potential pathway the UK could take to drastically reduce gas consumption in the power sector by 2030.

It analyses cost savings from a timely transition from gas to a clean power system, as well as discussing energy security considerations and recommendations for policy support. Ember’s own power sector model is described and compared against other leading studies on the UK’s energy transition.

Executive summary

The UK can phase out gas power this decade

The global gas crisis has given new impetus to replace fossil gas with clean power generation. Britain’s extraordinary offshore wind resource and the rapid cost reduction in the technology gives an opportunity to phase out expensive gas imports from the power system this decade, and quickly enjoy the benefits of a cheaper domestic energy supply.

01

The UK can reduce gas generation to 1% by 2030

New modelling shows the British power sector can transition from 40% gas reliance now to just 1% by 2030, five years ahead of the UK’s clean power target of 2035.
02

Reaching clean power by 2030 would avoid £93 bn in gas costs

In 2023, it will be at least six times more expensive to generate electricity from gas in the UK than from onshore wind. Achieving a clean power mix by 2030 will cut the UK’s reliance on fossil fuel imports and avoid £93 billion in gas costs.
03

The UK needs to add 90 GW of wind and solar in the next 8 years.

To enable a gas power phase out, Ember’s model shows the UK adding roughly 90 GW capacity of wind and large-scale solar by 2030. Over the next four years, the UK has sufficient wind and solar capacity in the pipeline to put it on track for this, if all projects are approved and constructed.

Russia’s invasion of Ukraine and the global gas crisis add new urgency to ending the UK’s fossil gas addiction in as many sectors as possible. With abundant and cheap offshore wind, the UK has an opportunity to move even faster in the power sector whilst driving economic growth. Rapidly reducing dependence on expensive gas power will enhance the United Kingdom’s energy security and geopolitical security - and bring down spiralling energy bills for households and businesses.
Phil MacDonald Chief Operating Officer, Ember

Modelling 2030 clean power

UK can achieve 2030 clean power

Ember’s model shows the UK reaching 99.3% clean share in the power mix in 2030, with 70% of the UK’s electricity provided by wind and solar.

In 2021, the UK government proposed a target for achieving a clean power system by 2035. But moving faster could benefit the UK. High gas prices and geopolitical risks following Russia’s invasion of Ukraine mean that the UK is left exposed to numerous risks through its unusually high dependence on gas. A faster phaseout of gas power plants would save taxpayers billions, making a strong case for a 2030 clean power goal.

Decarbonising the power system is also an opportunity for the UK economy. The UK already has a world-leading offshore wind industry, launched with strong government support. This decade now holds the potential for further economic growth as the UK becomes world-leading in hydrogen, seasonal energy storage, batteries, other renewable energy, carbon capture and storage (CCS) and nuclear.

Climate targets are at stake as well. Keeping global warming at 1.5C requires a clean power sector by 2035 across all Advanced Economies, but some countries will have to reach that threshold even earlier, as shown in the IEA’s Net Zero Scenario. The UK, with its enormous offshore wind resource, is well placed to lead the world by reaching a clean power system by 2030.

Modelling a 2030 gas phase out

A proposal to aim for 2030 clean power fits comfortably alongside existing ambition. The UK has already begun to put policies in place to reach a clean power system by 2035 following the Climate Change Committee’s (CCC) Sixth Carbon Budget, but several studies have shown that a 100% clean power system by 2030 is not far away.

The Leading the Way pathway from recent Future Energy Scenarios (FES) by the UK’s transmission grid operator, National Grid, reaches 98% clean power by 2030, but still maintains 10 TWh of unabated gas generation (2.3% of total) and 10 TWh (2.3%) of gas with carbon capture and storage (CCS) in 2030 for balancing. The British Energy Security Strategy from April 2022 set a target for the UK’s electricity supply to consist of 95% low-carbon generation by 2030, aiming for 50 GW of offshore wind, 10 GW of hydrogen electrolysers and around 50 GW of solar by 2030 (it should be noted that the energy security bill has been paused under the new leadership of Prime Minister Liz Truss).

Building on these studies and policies, Ember assessed a scenario that would lead to a 99% clean power system in 2030.

In Ember’s scenario, gas power is reduced to a minimum. Unabated gas and gas with carbon capture and storage (CCS) provide respectively 0.7% and 0.5% of generation in our model by 2030, falling from 40% unabated gas generation in 2021. Instead, clean sources reach 99.3% share, with 71% provided by wind and solar.

Chart showing UK electricity mix in 2021 compared to the mix in 2030 in Ember's power sector model

To reduce gas consumption and avoid high fuel costs, the use of unabated gas power plants and gas units equipped with CCS is limited to balancing only – providing backup power when cleaner resources are scarce.

For energy security purposes, we propose maintaining a limited number of gas power stations in a government-supported strategic reserve. These could be retired as more clean power capacity arrives in the early 2030s. A strategic reserve allows for power system flexibility in the event of higher than expected demand, and maintaining old gas power stations may prevent costly overbuilding of new dispatchable capacity such as carbon capture and storage (which Ember’s model sees providing 0.5% of supply in 2030).

In Ember’s scenario, surplus electricity from wind and solar can be used to produce green hydrogen at very low costs. The volume produced greatly exceeds the hydrogen demand from the power sector and could, therefore, contribute to the decarbonisation of all energy consumption sectors – including heating, industry or transportation.

Ember's power sector model

Ember’s model is not prescriptive. Our analysis is based on the understanding that there are other pathways the UK could follow for its transition to clean electricity.

Ember’s model consolidates the current government targets and the recommendations of the CCC and National Grid. A faster gas phase out is theoretically possible but will require accelerated investments across technologies such as carbon capture and storage (CCS) and green hydrogen, and the prolonged operation of some nuclear plants. On the other hand, a slower gas phase out may reduce short-term capital expenditure costs, for example on new hydrogen plants, but increases the UK’s exposure to global gas prices.

Further detail on the model is available in the Annex and Methodology.

A clean power system provides maximum security

A dramatic reduction in gas consumption in the power sector has a clear benefit for the UK’s energy security, severing exposure to volatile global prices and supply. Ember’s model also shows how the proposed clean power system also provides multiple levels of protection against changing weather and demand conditions.

Chart showing security of supply in Ember's UK power sector model in different conditions

Even with wind generation dropping to nearly zero, Ember’s modelled system can still provide a stable power supply.

An analysis of a peak stress week shows that with almost no wind, demand can be met by using nuclear, bioenergy and storage, and ramping up backup generators: gas, gas with CCS and hydrogen.

Further security can be provided by demand-side response, with consumers volunteering to shift their demand in exchange for compensation, and electricity imports, with National Grid planning for an impressive 20 GW interconnector capacity by 2030. These interconnectors were switched off in Ember’s model to prove that the UK can balance its demand even without foreign support, but the benefits of electricity trade are undeniable and proven many times by grid operators, leading to lower prices and curtailment, easier balancing and increased security.

Benefits of getting off gas

Clean power avoids huge costs

The less reliant the UK is on gas, the less vulnerable it is to price risks

The cost of gas reliance

UK wholesale gas prices skyrocketed in the past year, in turn driving a surge in the cost of generating electricity from gas-fired power plants. At the end of August it cost over four times more to produce electricity from a combined cycle gas plant in the UK (£420/MWh) compared to the same period last year (£100/MWh).

The unprecedented high gas prices look set to continue. Meanwhile, the cost of renewable power has tumbled. In 2023, it will be at least six times more expensive to generate electricity from gas in the UK than from onshore wind.

Chart showing cost of gas generation compared to onshore wind and solar in the UK

The most recent UK renewables auction secured a record amount of capacity for an average price of £48/MWh, including 7 GW of offshore wind. These wind and solar projects are due to start operating by 2026, by which time the cost of gas power generation is expected to be three times more expensive than this new renewable electricity at £157/MWh.

Without the electricity produced from wind and solar, the UK would have had to purchase 115 terawatt hours (TWh) more gas so far this year, amounting to £8.4 billion in additional gas costs (based on the average day ahead wholesale gas prices). According to Carbon Brief, total renewable power generation saved the UK gas costs of £10.6 billion in 2021 and £12.6 billion so far this year (up to 11 August).

Key documents that inform the UK’s energy planning do not currently incorporate this new price landscape. As a result, market incentives for renewables rollout are likely to push growth faster than existing projections. The gas the UK consumes for power generation in future years will be much more expensive than anticipated in energy system models such as National Grid’s FES. For 2023, the current market price (£167/MWh) is eight times the gas price assumed in the FES analysis (£21/MWh). The market sees forward gas prices falling, but remaining far higher than predicted.

Chart showing UK gas prices compared to prices in scenarios from National Grid

The price of gas means that even without future changes to how the electricity market functions, huge reductions in energy costs are achievable by decreasing the number of hours that gas plants are generating. However, transitioning fully to clean power over the next decade is the only way for the UK to fully insulate itself from the risks from fossil fuel imports.

Cleaning up power, lowering bills

The UK is at a critical junction. It can choose more ambitious renewable energy and clean power targets – reducing costs by billions of pounds and enhancing energy security – or it can decide to take extremely expensive and risky steps backwards and extend reliance on volatile fossil fuels. The faster the UK can phase out gas, the more money it can save. And with a near-complete gas phase out as in Ember’s model, it stands to save a lot.

Cost savings in motion

There are 6.4 GW of wind and large-scale solar projects under construction, which would avoid £4.8 billion in gas costs over the next two years and £15.7 billion between now and 2030. Offshore wind is responsible for three quarters of these avoided costs, accounting for £12 billion.

A further 19 GW of wind and solar projects have been granted planning permission. Assuming all are commissioned successfully, they will come online over the next four years and contribute £33 billion in avoided gas costs by 2030.

If demand for gas-fired power remains at current levels from 2023 to 2030, the resulting gas costs, based on current and forward prices, will be in the region of £145 billion. Alternatively, if the UK reaches the target that our model puts forward — 0.7% of generation from unabated gas (down from 40%), alongside 0.5% generation from gas CCS — the country would avoid approximately £93 billion in gas costs. This is approximately equivalent to the United Kingdom’s total annual education spending.

Chart showing money saved from switching away from gas power

Delivering clean power

The UK is already moving towards clean power

But a more committed energy transition will bring bigger benefits, faster.

The UK has already laid much of the groundwork needed to achieve the 2030 clean power scenario Ember’s model proposes. But a concerted effort will be needed on multiple fronts to deliver the full extent of possible benefits.

Renewables rollout is already underway

Ember’s clean power scenario shows wind and solar reaching 71% of generation by 2030, up from 25% in 2021. Reaching this will require sustained growth, but is firmly within reach. In fact, it has already begun: so far this year the UK has brought online 2.3 GW of offshore wind, more than was added in the last two years combined.

The UK renewable project pipeline is also substantial, with around 40 GW of wind and large-scale solar projects either under construction, granted permits or having submitted planning applications. This is roughly equivalent to the total current wind and solar capacity in the UK.

Chart showing UK wind and solar pipeline compared to capacities in Ember's power sector model

Over the next four years, the UK has sufficient wind and solar capacity in the pipeline to put it on track for the 2030 capacities assumed in Ember’s modelling, if all projects are approved and constructed. There is a drop off in planned capacity additions after 2027, however, this is to be expected as new projects will submit applications in the coming years which will be brought online in the late 2020s.

So far this year, the UK has brought online more than double the volume of wind and solar capacity compared to 2021, with a further 0.6 GW under construction due for completion by the end of the year. Effectively, wind and solar in the UK are already on a growth curve that will enable them to meet 2030 clean power requirements.

Wind and solar are expected to make up the bulk of power generation by the end of the decade, but to reach clean power also requires major grid infrastructure improvements, and deployment of other dispatchable zero-carbon technologies.

Power will come from the north

In the future, power generation will concentrate in the north of England and in Scotland, with the vast majority of onshore and offshore wind projects planned in Scotland. This provides a vast opportunity for employment and economic growth in regions that need it most.

Chart showing a map of UK planned wind and solar as well as a chart of installed wind and solar capacity by region

However, it also puts a lot of strain on the north-south power grid, requiring accelerated investments in the transmission network. The UK’s electricity demand concentrates in the south, with London and the South East regions alone responsible for almost 30% of the country’s electricity consumption. This power will be supplied in large from Scottish wind farms.

National Grid rightly acknowledges the need to execute more infrastructure investments, already planning to invest £10 billion in the transmission grid by 2026. It is critical that the planning of the UK’s future energy system takes those into account, allocating enough funding to modernise the grids on time.

Recommendations

2030 clean power

Cutting gas from the power sector will reduce energy bills and make the UK safer

Ember’s analysis demonstrates one route to phase out gas power and boost energy security, but it is not prescriptive. Some technologies used are not yet widely deployed, especially CCS and hydrogen, which have a limited commercial track record. These have some potential to be undercut on cost and speed by other more speculative projects which Ember has not included in the modelling: such as small modular reactors, the Severn Barrage, or Xlinks, which each claim they can deploy firm capacity by 2030.

Early action from the government will limit the UK’s exposure to the risks associated with gas use, and so we propose areas where action can be taken now to shore up energy security in an uncertain decade. As the Energy Security Bill continues to move towards completion, there are legislative opportunities to introduce some of these measures immediately, alongside the other priorities of civil society, especially on home insulation.

Policy recommendations

01
Go all out for low-carbon tech now
- Offshore wind is already strongly supported, but more needs to be done to enhance grid infrastructure and north to south electricity flows.
- Government needs to unblock barriers for onshore wind, solar, nuclear, and seasonal energy storage. The more zero-carbon generation by the end of the decade, the lower the requirement for fossil gas.
02
Maintain a strategic reserve of mothballed gas capacity
- Government should urgently explore how to maintain a limited number of gas power stations with very low load factors, without expensive gas continuing to set the wholesale price.
- The UK should exercise caution with building new capacity (e.g. gas CCS) which may prove to be unnecessary by the late 2030s as renewable generation dominates the system. To avoid overbuild, the government could explore support for a gas capacity strategic reserve, limited to running a few hours a year in times of peak system stress, and with clear closure dates in the mid-2030s as zero-carbon dispatchable capacity comes online.
03
Government should support rapid deployment of green hydrogen production capacity, and generation where appropriate
- This includes desalination, electrolysers and storage. Government also needs to ensure there is an early high-value market for green hydrogen.
- Where appropriate for security of supply, government should also support the build and operation of hydrogen generation.
04
Government should test commercial-scale Carbon Capture and Storage as soon as possible at an industrial cluster site on the North East coast
- Gas CCS is currently used in most power sector models, but the likelihood of very high gas prices continuing does make it less competitive. However, within a cluster of industrial heavy-emitters, some dispatchable gas capacity (not baseload) may be a useful and economic support to the grid
- Government especially needs to support the transport and storage network to enable deployment.

A UK clean power target by 2030 is possible within current credible modelling, where “clean” is defined as very low (1%-3%) unabated gas generation. Less than 1% gas generation may be possible, but may require overbuilding capacity such as CCS which may prove to be under-utilised in later decades.

For security of supply, a complete unabated gas phase out by 2030 is unlikely to be possible without a step change in deployment of dispatchable low-carbon capacity (hydrogen, CCS) or deployment of long duration storage. Some significant gas capacity (~7 GW) will likely be necessary for system stability through the early 2030s, and to avoid any risk of power cuts during winter peak demand and periods of very low wind. Given this would only be for a few weeks a year, greenhouse gas emissions and fuel costs would be negligible.

The path to 2030

Phasing out gas this decade will require a heroic push from government policy and support, acceleration of the private sector’s already ambitious deployment plans, and continued technological innovation.

While there are different possible pathways to eliminate UK gas power reliance, there are some commonalities in power sector modelling. Hydrogen and CCS will likely both be essential sources of dispatchable power – the technologies exist but are not yet deployed at scale. Nuclear will provide essential firm supply, both from new plants and lifetime extensions where possible. To reduce risks of one technology failing to deliver, the government should pursue an ‘all-of-the-above’ strategy for clean energy. But the backbone of the British electricity system is fast becoming wind power, especially offshore wind, which is cheap, quick to build, and reliable.

Ember’s research agrees with National Grid and the Climate Change Committee: by the end of the decade, wind and solar together will supply around three quarters of British electricity demand.

The imperative to get off gas does not just come from threats to energy security and energy costs. The UK renewables industry is already world leading in many respects and the country now has the opportunity to drive reindustrialisation as the government backs other low-carbon technology, including hydrogen power, innovative long-term storage and carbon capture and storage.

Finally, producing electricity without carbon emissions is the essential step towards reaching a full net zero economy. According to the International Energy Agency, all Advanced Economies need to have reached clean power by 2035. The UK government has already committed to decarbonise the power system by 2035, but the global gas crisis and further falls in the price of renewables suggest that the country may be able to seize the opportunity of clean power even earlier, and continue to lead the world on climate change.

Annex

Ember's modelling compared to other scenarios

Future Energy Scenarios - National Grid

The Future Energy Scenarios (FES – “a range of different, credible ways to decarbonise our energy system”), was released by the UK’s transmission grid operator, National Grid, in July 2022. The most ambitious Leading the Way pathway reaches 98% clean power by 2030.

National Grid’s modelling still maintains 10 TWh of unabated gas generation (2.3% of total) and 10 TWh (2.3%) of gas with carbon capture and storage (CCS) in 2030 for balancing. While the projections were performed following the autumn 2021 gas price spike, this did not fully capture the later gas supply crunch driven by the Russian invasion of Ukraine.

Record high gas prices, which are likely to persist through the first half of this decade at least, mean future analysis will find gas declining further, replaced by more competitive clean power.

Sixth Carbon Budget - Climate Change Committee

The Sixth Carbon Budget (2020) from the Climate Change Committee (CCC) already aimed for a fully decarbonized power system by 2035. The government committed to this in the Net Zero Strategy announced in October 2021. National Grid and the CCC pathways vary slightly in the assumed nuclear and hydrogen capacities. However, neither National Grid or the CCC take into account the full scale of the gas crisis that originated in the second half of 2021, and so are over reliant on gas generation.

The CCC Balanced Net Zero pathway assumes up to 49 TWh of unabated gas generation and 39 TWh of gas CCS in 2030, representing up to 22% of total generation.

British Energy Security Strategy

In answer to the gas supply crunch, in April 2022 the British Energy Security Strategy set a target for the UK’s electricity supply to consist of 95% low-carbon generation by 2030. This raised ambition across several metrics: aiming for 50 GW of offshore wind and 10 GW of hydrogen electrolysers by 2030; increasing CCS, hydrogen and nuclear deployment; setting a 70 GW solar target for 2035; and accelerating the reduction of gas consumption. These measures, alongside further government intervention, could put the UK on a pathway towards almost 100% clean electricity by 2030, as indicated by Ember’s modelling.

The table below compares capacity requirements between Ember’s power sector model and National Grid’s Future Energy Scenario Leading The Way against historical values for 2021. In most places Ember’s model follows National Grid’s estimates as closely as possible, but some changes were introduced to minimise gas consumption.

Comparison of capacity requirements: Ember vs National Grid

Technology	2021 (UK)	Ember 2030 (UK)	FES 2030 (GB)
BECCS	0.0	1.1	1.1
Biogas	1.9	1.8	1.8
Biomass and waste	6.2	5.2	5.2
DSR	6.5	2 / 10*	2 / ~20
Gas	34.7	10.9	19.1
Gas CCS	0.0	2.6	2.4
Hard coal	5.4	0.0	0.0
Hydro	1.6	1.9	2.1
Hydrogen	0.0	6.5	1.0
Nuclear	8.1	6.8	4.6
Oil	1.3	0.1	0.1
PV	14.0	51.3	42.0
Wind	14.5	34.1	30.8
Wind offshore	11.3	54.6	52
Marine/Tidal/Other RES	0.0	2.1	2.1
Battery + V2G	1.7	21.6	21.6
Hydro pumped storage	2.7	4.9	4.8
Other storage	0.0	3.8	3.8
Interconnectors	7.9	0.0	19.5
PEAK DEMAND** (GW)	48.76	62.0	60.0
YEARLY DEMAND** (TWh)	334.2	349.4	339.7

* peak used values and max available values are shown, 20 GW for FES is an estimate given the provided 2035 value of 28.5 GW
**demand does not include electrolysis

National Grid models the Great Britain power market, whilst Ember covers the full United Kingdom (including Northern Ireland) making our capacities and demand proportionally higher. There are also some negligible differences where Ember uses plant-by-plant data (gas, coal, oil, nuclear, hydrogen, pumped-storage) and National Grid only provides aggregated numbers. We followed the future regional distribution of wind and solar resources provided in FES, with the other technologies located according to their current spatial distribution/plant locations.

The key changes in capacity assumptions proposed by Ember are as follows:

Interconnection

National Grid assumes that by the end of the decade the UK will be a significant power provider to mainland Europe, whereas Ember’s model treats the UK as a disconnected island, and spare generation is fed into green hydrogen production. This is realistic, if electrolyser capacity and storage can be deployed by the end of the decade and considering that historically wholesale electricity prices in France, Scandinavia or Germany were lower, making the UK a net importer. However, it is worth underlining that there are clear benefits of electricity trade proven many times by grid operators, leading to lower prices and curtailment, easier balancing and increased security.

Hydrogen

Ember assumes that the expansion of hydrogen generation capacity will be accelerated by five years compared to National Grid’s plan and closer to the CCC’s estimates, reaching 6.5 GW in 2030. Emphasis is put on the replacement of gas combined heat and power (CHP) plants with hydrogen ones, because CHPs run at the highest load factors contributing to significant gas consumption. Ember’s discussions with utilities indicate the technology for full hydrogen generation is now ready, but deploying it will require government support and a source of green hydrogen. Current planned plants, for instance at SSE Keadby or Project Cavendish, are reliant on blue hydrogen. The UK government is targeting 10GW of low-carbon hydrogen production capacity by 2030, which is also assumed in Ember’s model, allowing the whole hydrogen power plant fleet to operate using green hydrogen produced from surplus electricity.

Gas price

National Grid’s modelling was completed in the first half of 2022, following the autumn 2021 gas price spike (see Fossil gas drives quadrupling of UK electricity prices | Ember, Jan 2022) but midway through the later spike driven by the Russian invasion of Ukraine. Our analysis of forward market prices indicates that, towards the end of the decade, gas prices will remain around two times higher (£44.57/MWh) than those assumed by National Grid (£21.49/MWh), making clean power even more competitive. The National Grid pathways do not take into account the cost increases in fossil fuels or minor cost increases of wind and solar following the Russian invasion. Renewable technology costs are based on pre-war trajectories of decreasing cost over time. The IEA estimates that higher renewable costs will persist throughout 2022 and 2023, but despite this, the competitiveness of wind and solar has not been hampered since fossil fuels and electricity prices have risen much faster since the last quarter of 2021. This is why Ember assumes a quicker gas phase out, with several units replaced by hydrogen, and only a limited number remaining as backup reserve.

Nuclear

Ember assumes a higher nuclear capacity than National Grid, with a delayed phaseout of the next youngest nuclear power stations Torness and Heysham 2 after Sizewell. They are both due to close in 2028 but have potential for lifetime extension, and their firm capacity could help reduce gas capacity requirements. Ageing plants could see interruptions to generation (as with EDF reactors that have developed cracks recently), so the government urgently needs to confirm the potential lifetimes of the existing nuclear fleet.

DSR

National Grid envisages a strong role for demand side response, with up to 28.5 GW available by 2035. In Ember’s model, the theoretically-available DSR capacity in 2030 was set at 10 GW (up from 6.5 GW today), but only 2 GW are needed for balancing, which is exactly the same as in National Grid’s modelling outputs.

Solar

Ember uses the government’s expected solar target in the British Energy Security Strategy, and so assumes a somewhat higher solar capacity by 2030 than National Grid. Where this solar is built has a major impact on how useful it is for system stability, with deployment most helpful close to areas of peak daytime demand (e.g. on buildings).

Gas CCS

Ember matches National Grid’s assumptions for gas capacity with carbon capture and storage. This is likely to entail building two to four new power plants, depending on size and number of units, as CCS retrofitting is unlikely to be cost effective or efficient. These power plants will only run during periods of high system stress (we estimate they will account for just 0.5% of total generation) and so their cost per unit of electricity generated will be extremely high, especially as they are dependent on fossil gas supply. Building a CO2 pipeline to a remote, little-used gas plant makes little sense, so gas CCS works best as part of an industrial cluster, sitting alongside hard-to-electrify sectors such as cement and chemicals.

Gas power station closure and conversion

Ember’s model begins with the current fleet of gas units: 34.7GW in 2021 (DUKES data). By 2030 the model sees the oldest CCGTs decommissioned, the OCGTs are left as a reserve, along with the newest CCGTs (total reserve is 10.9 GW). Some existing CCGTs are converted to H2/CCS (this likely means rebuilding on a nearby site rather than expensive and inefficient conversion). The currently running large gas CHPs are converted to hydrogen. The model’s overall gas, gas CCS, and H2 capacity is 2.5 GW lower than in National Grid, because of a reliance on additional nuclear.

	2021		2030
	Number	Capacity (MW)	Number	Capacity (MW)
Gas CCGT/OCGT	41	27904	19	10876
Gas CCS	0	0	3	2630
Hydrogen CCGT/OCGT	0	0	5	4255
Gas CHP	5	4244	0	0
Hydrogen CHP	0	0	3	2232
Gas - Small units	N/A	2797	0	0
Decommissioned	N/A	N/A	16	11283
Total	46	34677	30	19993

Biomass and BECCS

Scientists and policymakers are increasingly expressing strong concern over the true carbon emissions and sustainability embodied in imported forest biomass. For this reason Ember advocates for countries to minimise or eliminate the inclusion of large-scale bioenergy in the power sector. However, in order to maximise comparability with National Grid’s FES, in this modelling Ember simply matches Grid’s assumptions on biomass, including notably that of a successful conversion to Biomass Energy with Carbon Capture and Storage (BECCS) at Drax. If policymakers choose to restrict imports of high-carbon forest biomass, alternative sources would need to be found within the UK, or alternative dispatchable capacity.

Marine/Tidal/Other Renewables

Other renewables such as marine, tidal, and geothermal energy are mainly in the early stages of commercialisation, require significant R&D, and make a minor contribution to generation in 2030. Ember matches the capacity available in National Grid’s scenario.

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Methodology

Ember’s power system model

The analysis presented in the report uses Ember’s in-house power system optimization model PyPSA-UK, that is publicly available along with all input data under the MIT licence, allowing for all analysts to replicate our results or build their own scenarios for the UK’s future energy system. PyPSA-UK is based on the PyPSA framework, a Python-based ‘open source toolbox for simulating and optimising modern power systems’, used globally in research and policy applications.

Ember’s implementation of PyPSA uses 2030 capacity and demand expectations from National Grid’s Future Energy Scenarios (FES – Leading the Way pathway), expanding the geographical scope to cover Northern Ireland.

The model is run for each hour of the year, with 12 nodes representing the regions of the UK. Current and planned power station locations are used (based on DUKES data, planned hydro pumped-storage units, the REPD database, among others), with some generators being decommissioned and some upgraded e.g. a gas combined-heat-and-power plant (CHP) becomes a green hydrogen unit. Adequate green hydrogen supplies are secured through the conversion of otherwise curtailed wind and solar energy in electrolyzers – the estimated potential of H2 production is 2.1 million tonnes, with only 0.64 utilised in the planned hydrogen turbines.

The model runs the capacity projections against ‘worst case scenario weather years’, following a methodology used by European grid operators in their planning. The European Network of Transmission System Operators (ENTSOE) prepares Ten Year Network Development Plans (TYNDP) and the European Resource Adequacy Assessment (ERAA) to assess the safety of the European power system, the availability of generators against the demand, grid expansion needs, etc. Both processes use the Pan-European Climate Database (PECD) to estimate the demand and variable renewables feed-in under different climatic conditions, with the TYNDP pathways checked against 1995, 2008 and 2009 (the baseline year) weather profiles as the worst case years.

Using the ENTSO-E’s methodology ensures the model maintains energy security, with supply matching demand on an hourly basis, even in high stress situations (for example, dunkelflaute, or mid-winter wind lulls). To emphasise the security aspect, interconnectors are switched off in Ember’s model, with the UK being fully self-sufficient in terms of electricity supplies.

A merit-order scheme is resembled, in which the dispatching is optimised based on short-run marginal costs. Where available, National Grid’s fuel and CO2 price forecasts were used, except for 2030 gas prices that were estimated based on forward contracts. The running costs of other generators were set to represent their dispatching priority in the merit order. The model was calibrated using 2019 weather and demand data to ensure the cost assumptions correctly represent reality. A generic CHP running profile was calculated from 2019 hourly generation profiles for the CHP units available in BMRS and the dispatching of CHP units across all technologies (biomass, waste, gas, hydrogen) was not optimised to ensure adequate heat supply. A minimum load of 40% for nuclear plants was assumed based on ENTSO-E’s ERAA input data. No ramp up/down limits were introduced due to their impact on model solving times, but these can be added in future works based on PyPSA-UK.

The outputs produced by the model give an indication of the resources needed to fulfil the power demand in the future, as well as the emissions intensity, load balancing needs across regions, storage requirements, among other metrics.

Gas cost assumptions and calculations

Gas currently accounts for 40% of total UK power generation. A gas plant efficiency rate of 50% (gross calorific value/higher heating value) was used. A carbon intensity of 0.37 tCO2eq/MWh was applied. Variable operating and maintenance costs were estimated at £2/MWh for gas plants. UK National Balancing Point (NBP) fossil gas prices on 31 August 2022 were used for current and forward prices and to calculate gas cost savings. The 2028 calendar year NBP gas price was used for 2029 and 2030. The ICE UKA carbon allowance price is only quoted out to 2024 for the December contract so that price has been applied for 2025 to 2030. The levelised costs of generating electricity from onshore wind and solar PV for 2021 to 2024 include storage costs and were taken from analysis by Transition Zero.

Hydrogen generation assumptions

In National Grid’s FES Leading the Way scenario, deployment of hydrogen generation capacity begins in 2028 and reaches 1 GW of total capacity by 2030. However, analysis from the CCC finds that 1 GW/yr of hydrogen generation capacity could be deployed in the second half of the 2020s with deployment rates rising to 3.5 GW/yr between 2030-2035, achieving up to 20 GW of total capacity by 2035. These buildrates are consistent with buildrates of gas-fired plants across the 1990s and are therefore considered realistic. In this model, Ember has therefore assumed an accelerated rate of hydrogen generation deployment to 2030 compared with National Grid to more closely align with the CCC’s analysis.

Wind and solar: curtailment and exports

The wind and solar feed-in in Ember’s scenario is lower than in the FES due to two factors: the much higher nuclear generation and the lack of energy exports. While a later nuclear decommissioning schedule reduces gas consumption, the limited flexibility of nuclear reactors means they are not able to lower their output when renewable feed-in is high, leading to increased curtailment. Similarly, the significant interconnection capacity in FES means that surplus electricity from wind and solar can be sold to neighbouring countries (assuming they will want to buy it). From all the energy curtailed in Ember’s scenario (133 TWh) up to 108 TWh can be used to produce 2.1 million tonnes of green hydrogen (assuming the 10 GW electrolyser capacity).

Renewable applications and permitting

So far this year, the UK has brought online more than double the volume of wind and solar capacity compared to 2021, with a further 0.6 GW under construction due for completion by the end of the year. Around 15% (6 GW) of projects in the assessed pipeline are currently under construction, the majority of these being large offshore wind projects due to begin operation in the next one to three years.

Projects with permits already granted account for half the pipeline capacity (19 GW).Timely construction of these projects will be essential to reach the wind and solar additions required by mid-decade to align with Ember’s modelling.

More than 6 GW of solar projects have submitted planning applications and, if successful, these could be expected to come online by the end of 2023. Onshore and offshore wind projects with planning applications submitted total almost 10 GW of capacity. The majority of these could come online between 2025 and 2028 if they are approved, based on average timescales of previous projects.

Average project timelines estimated from the UK Renewable Planning Database show that solar PV projects can progress from planning application to operation in less than 2 years. For onshore wind this timeframe is around 5 years, whilst offshore wind projects take more than 6 years to pass through all planning stages. The UK’s decision in February to move to annual Contracts for Difference (CfD) auctions should help ensure sufficient renewable capacity enters the pipeline of projects up to 2030, but the different timeframes of solar and wind must also be taken into account.

Acknowledgements

Photo credit

Alan Dawson / Alamy Stock Photo. Oil, gas rig being towed past Teesside Offshore Wind farm at Redcar on its way to Able UK yard near Hartlepool.

Power system model

Ember’s power system model is based on the PyPSA framework: T. Brown, J. Hörsch, D. Schlachtberger, PyPSA: Python for Power System Analysis, 2018, Journal of Open Research Software, 6(1), arXiv:1707.09913, DOI:10.5334/jors.188

Thanks

The authors would like to thank National Grid, the Climate Change Committee and SSE for conversations which contributed to this work.