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Defining a Unified Vision of the UK Energy Market in 2030+
Part 1

14 Oct 2022

The energy market of today needs to rapidly evolve to meet the UK’s stated net zero targets, but what does the future market look like and how do we get there? Capgemini put out the call to action and the energy industry responded, coming together to help create a unified vision of the future energy system.

Over the course of 2022, Capgemini Invent has brought together a group of key energy market leaders to explore new possibilities for the future of the UK energy markets and accelerate momentum to collectively make our net zero future a reality. The group included executives from a diverse set of market segments, providing viewpoints from across the entire energy system to help construct the collective vision to make the future energy system a reality.

The challenges in achieving net zero by 2050 are substantial and to date there has been plenty of ambitious statements, yet a seemingly lack of coordinated effort from industry. However, we believe there is reason for optimism having observed wide consensus on an overwhelming majority of the net zero agenda and a strong willingness from all parties to attack the energy transition head on.

What is the purpose of the future energy market?

We accept that the future energy system must be net zero, but what are its other purposes? The current energy model is designed with energy retail at its heart. The future system will need to interact with all parts of our lives, moving on past the basic requirements of decarbonisation and redefining how people engage with energy to ensure stability in our future.

In reflection of these future system needs, we have developed a collective North Star, which captures the importance of net zero, yet retains critical elements from the energy trilemma:

“A nature positive energy market that moves beyond net zero and enables our people, future generations and our planet to thrive for the long term, while ensuring energy security and affordability.”

Our recommended vision statement aims to establish an energy system that promotes growth, yet remains equitable and secure to all.

What are the outcomes that the future energy market should drive?

We have identified seven key outcomes based on our stated purpose that will allow us to construct the solutions required to build a decarbonised economy. These include:

  1. CO2 Production Carefully Monitored
  2. Sustainable Resources and Circularity
  3. Cleaner Energy Systems
  4. Decarbonised Heat and Buildings
  5. Depollution of Heavy Industry
  6. Greened Transport
  7. Energy Efficiency

There has been a significant amount of collective thinking undertaken by industry in the topic areas of the stated outcomes. However, to date, there has been little consideration on how these individual ambitions fit together to create a unified vision of our net zero future.

What is our collective net zero vision?

The collective work undertaken by academia, industry, legislators, and commentators demonstrates an informal consensus for the energy transition. Rapid change is only possible once there is a clear and understood shared vision of the destination. To this end, we consolidated the collective thinking and started to form a vision that we can all work towards.

Integrated energy system control

The energy system in 2050 will be integrated and interoperable, with system operators maintaining a high level of control at both a local and national level. Market operations will be closely linked, increasing the rate and effectiveness of interactions with the end consumer and other market actors. Heightened levels of consumer choices will be supported through education programmes, which provide consumers with the toolsets necessary to interact with the energy system and promote the industry as an attractive place to work.

Robust controls will be in place to ensure that data is used for the benefit of the consumer and in support of a secure, reliable system. Disengaged consumers are protected through high levels of automation, ensuring no one is left behind and all reap the benefits of net zero. An Energy Agency will oversee the energy system and own its blueprint, guaranteeing the system delivers societal needs.

Changed energy markets

Energy markets will be capable of providing real time price and demand signals to devices and actors, enabling flexibility across the entire system. Settlements would be processed in seconds and minutes, not weeks, for the majority of energy consumption. Market arrangements will be simple and accessible, reducing barriers to entry, promoting investment and unlocking the market for services.

Changed energy system

The energy system of 2050 will feature billions of assets capable of securely relaying disaggregated data across an interoperable network. Asset information, such as location, capabilities and operating thresholds are made available to market actors through trusted, fully integrated databases, unlocking the benefits of automation and flexibility. Energy systems are fully decarbonised and designed with variable fuel mixes and carbon capture that meet the needs of the region yet remain interconnected and coordinated at a national level. Excess renewable generation is converted into hydrogen storage, exported to neighbouring systems through interconnectors, or used to boost the economy’s data hubs and heavy industry.

Seamless Prosumer Living

In 2050, all energy consumers, regardless of socioeconomic background, are considered prosumers, producing, storing, trading and consuming energy as their needs demand. There is seamless interfacing with a flexible, smart, convenient and affordable energy system. Prosumers are able to trade with neighbours through microgrids and local community battery storage infrastructure, or shift excess generation back to the grid, when tariffs are attractive. All prosumers are guaranteed equal access to the benefits of a smart system, heat in the winter, the education necessary to engage and interact, with automation shouldering the bulk of consumer behaviour changes and protecting the disengaged.

In the second article of our 3-part series, we begin to look at the principles the future energy markets should be designed around, while also considering what changes are needed to achieve a net zero energy system.

Click here to read Part 2.