Foreword

2023 saw extreme weather events devastate communities around the world, with new records set for global temperatures and carbon emissions. Public discourse, however, was dominated by geopolitical tensions, conflict, and short-term economic challenges. Scaling the energy transition to meet net-zero targets seems further down today’s agenda.

At COP 28, countries agreed on the need to “transition away from fossil fuels in energy systems” for the first time, providing hope that meaningful action would decisively mobilize the world into action. Unfortunately, the deal doesn't compel countries to act, and no timescales are specified.

The UK’s early ambition and action to champion the energy transition has allowed the nation to make good progress. That progress now seems to be stalling, and, as we detail in this UK Energy Transition Outlook (UK ETO), the country will not meet its ‘net zero by 2050 target’ unless the government increases policy support to a low-carbon future. This forecast, now in its second edition, is based on our independent model and accounts for the UK energy system’s physical, political, technological, and economic links to Europe and the rest of the world.

Over the next three decades, the UK will undergo a strong shift from fossil fuels to electricity as an energy carrier. But the scale of the shift is now lower than we forecast in our first UK ETO report, issued in 2022. As a result, oil and gas will still account for 35% of the UK’s primary energy supply mix in 2050. Moreover, the outlook for hydrogen now seems a lot less certain in the absence of a clear, UK-wide strategy on the demand and supply of this crucial decarbonization fuel. One bright spot this year is that the future of UK CCS looks more robust due to heightened government support and an expected increasing carbon price.

London Underground (the tube) launched its ‘Mind the Gap’ safety campaign more than 50 years ago, and that call to action has become second nature for my fellow Londoners. I think we need to elevate the message to ‘Mind the Gap to Net zero’. The gap in question is between the Nationally Determined Contributions (NDCs) of many nations, including the UK, and the 2050 net-zero ambitions they are pursuing through their current emission-reduction plans. There is a gap in the number of gigawatts needed and the number of renewable projects being built. There is a gap between what supply chains can deliver and what nations need. There is an ever increasing skills gap. But fundamentally, there is a gap between targets and the policy needed to drive industry to scale.

To bridge the gap we need to keep focused on the positives: the UK has the largest offshore wind market in the world — established through a combination of North Sea oil and gas expertise coupled with strong government policy support. The nation is seeing a greater number of solar projects constructed, industrial scale energy storage plants and year-on-year sales growth of EVs. We also need to focus on the key challenges. The national power grid needs significant scaling to make it more responsive to better manage supply and demand, and pipeline infrastructure needs to be tested and upgraded to ensure the safe transmission of blended hydrogen to communities and businesses around the UK. Home insulation is a key enabler of decarbonization and must be policy priority.

Like all balanced systems, if you want less of something you must start with more of something else. Green electricity is key to the energy transition, the competitiveness of the UK’s future economy, and the wellbeing of our households.

With oil and gas representing 80% of today’s energy system, a dramatic ramp up of renewable power and grid capacity is needed. Without this, change will not be realized. Alignment between authorities, energy companies and society is needed to bridge the gap and to achieve legally-binding net zero commitments.

We will move forward, faster, together.