Climate Change Committee: The 7th Carbon Budget
This statutory report provides advice to the UK Government on the level of the Seventh Carbon Budget (2038 to 2042) Presented to the Secretary of State pursuant to Section 34 of the Climate Change Act 2008. The Committee is required to advise the Government on the level of greenhouse emissions and legally binding milestones that are set into law. Investors, businesses, households, and government can then act with a shared understanding of the path as well as the end goal.
The report sets out the recommendations for achieving the proposed Seventh Carbon Budget. A set-out pathway (modelled scenarios), and associated actions with quantified economic and social values ensures that the recommendation from the report is viable and practical.
Sophisticated modelling using BID3 for unparalleled confidence in produced results:
The modelling methodology using BID3, also used by the Department of Energy Security and Net-Zero (DESNZ), for this report by the CCC explored how the system build will be and its operation across:
- Two scenarios: Balanced Pathway and Additional Action Pathway
- Five sensitivities: two for Demand, and single for each of Delay of CSS and Nuclear buildout, rapid Unabated Gas Phaseout and dominant Hydrogen Build for thermal generation
State-of-the-art energy modelling with BID3 allowed for addressing locational needs for flexibility consideration for 11 electricity zones, as well as 13 hydrogen zones. Both electricity and hydrogen networks were implemented in the model as interconnectors and pipes respectively in order to capture the zonal effects in the modelling.
Outputs encompassed both the power and hydrogen system on an annual and hourly level across a national and regional granularity:
- Power System Capacity Buildout
- H2 System Capacity Buildout
- Network Buildout
- Total System Costs
- Power System Operation and Emissions
- H2 System Operation and Emissions
Use of BID3’s Auto Build (Capacity Expansion module) for optimizing the future energy mix
BID3’s Auto Build module allowed the capacity buildout of the UK power system on a least investment cost basis from 2032 onwards across the modelled zones, adding storage capacity comprising of 4 to 6 hr batteries and 100 hr LDES and electrolysers with 24 hr salt caverns in line with the increase in electrolysers and hydrogen demand across the modelled H2 zones
Grid reinforcement by Auto Build with expansion from 2037 (beyond NESO’s Ten Year plan). Optimising to add more reinforcement between England Scotland via the B7A and B6, and B4 boundaries reaching around 35, 29, and 23 GW respectively to allow the flow of wind from Scotland
Modelling outcomes and overall report firm recommendations to the UK government
The modelling results show that Demand for both electricity and hydrogen increases gradually throughout the modelling horizon and divided among the different zones and clusters:
- The Balanced Pathway scenarios will generate net cost savings from the late 2040s compared to the baseline, despite a significantly higher electricity demand
- Emissions in the power sector declines significantly as RES and abated thermal capacity increases while those of H2 sector increase as more SMRs are built
- Rising total system cost’s primary driver in investment in generation required to decarbonize the power system and meet growing demand
The recommended level for the Seventh Carbon Budget, a limit on the UK’s greenhouse gas emissions over the five-year period 2038 to 2042, is 535 MtCO2e, including emissions from international aviation and shipping. The reports notes that it is an ambitious target, reflecting the importance of the task but is deliverable.
The report notes that in many key areas, the best way forward is electrification and low-carbon electricity supply. Those make up the largest share of emissions reductions in the Pathway scenario, 60% by 2040.
Finally, the committee optimistically pinpoints that technological development and adaptation as well as private sector innovation and investment with real policy adaptations will ensure the delivery of clean and secure energy system.
