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UK set to be a net exporter of electricity by end of decade [free access]

July 13, 2021

According to future energy scenarios released by the country’s transmission system operator (TSO) National Grid, the UK will be a net exporter of electricity to continental Europe by 2030, a scenario that will remain so through to and beyond 2050.

 

National Grid released its 2021 Future Energy Scenarios (FES 2021) report on July 12, 2021, describing the potential outlook between now and 2050, based on its modelling and research. The utility has laid out four scenarios within its modelling and framework ­– Leading the Way (LW), Consumer Transformation (CT), System Transformation (ST) and Steady Progression (SP).

 

With the exception of the least ambitious SP scenario, the TSO sees the UK being a net power exporter by 2030, and remaining so. These projections are far removed from leading energy information providing company Independent Commodity Intelligence Services’ (ICIS) forecasts, under which the UK does not become a net exporter until 2036. This is even later than the least ambitious SP scenario, which has the UK exporting from 2035.

 

According to ICIS, the UK’s current carbon price support (CPS) mechanism, which the government has shown no sign of removing, is the biggest barrier with regards to the UK exporting electricity to mainland Europe. The ICIS assumption is that the CPS will remain in place for the time being, with only its removal making a difference. On the other hand, National Grid’s projections were based on the assumption that the CPS will continue in line with government policy before being gradually phased out.

 

Further, all National Grid’s scenarios, with the exception of SP, will deliver net zero carbon emissions by 2050, with the most ambitious LW scenario seeing net emissions at 28 million tonnes CO2 equivalent by 2050. From a generation stack standpoint, LW is not the most ambitious scenario though as most of the enhanced emissions reductions come from agriculture and land use.

 

A key difference between the FES 2021 and ICIS forecasts lies in renewables growth rates. FES 2021’s expectations on renewable growth over the course of the next few decades from the CT, ST and LW all significantly outperform ICIS analyst projections. Despite this, only the LW and CT scenarios have the UK achieving its more immediate target of developing 40 GW of offshore wind generation by 2030, a target also missed under ICIS projections.

 

With regards to the future of nuclear in the UK, FES 2021 scenarios forge some very distinct pathways from each other. LW sees only limited development as nuclear capacity stays at 5.5 GW from 2033 onwards. CT, which sees the largest growth of nuclear by 2050 with capacity reaching 17.1 GW, relies primarily on small modular reactors – a new technology, while ST primarily sees the development of traditional large-scale nuclear projects with its forecast nuclear capacity outperforming CT from 2037 to 2046.