Facing the future: Net zero and the UK electricity sector – EQ Mag Pro
The policy shift toward a net-zero United Kingdom continues to emerge, given strong momentum by the recent 26th United Nations Climate Change conference in Glasgow. With a bold target of a 78 percent reduction in economy-wide greenhouse-gas emissions by 2035, now enshrined in law, and the UK government putting the Green Industrial Revolution at the heart of its plans for a stronger post-COVID-19 economy, there is impetus for change.
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Beyond environmental benefits, the energy transition will mean the growth of significant value pools in renewables (in particular, offshore wind), grid, flexibility and operability services, and new downstream. Among industry players, there is excitement about the opportunities within the sector, and investors anticipate a new wave of growth. However, unlocking potential value will not be easy and will involve addressing issues regarding security of supply, costs, demand stimulation, and pressure on returns.
In this article, we draw on modeling contained within the United Kingdom’s Sixth Carbon Budget.1 We consider the implications of the Committee on Climate Change’s modeling on the Balanced Net Zero (BNZ) Pathway, the central route to achieving net-zero emissions by 2050. Looking at electricity demand, technology, and the grid, we discuss options available to investors, regulators, policy makers, and energy companies as they consider how best to support the United Kingdom’s transition to net zero…Read More…
Source : mckinsey
