The GB power system is increasingly at risk of becoming stuck in transition on its necessary path to carbon neutrality.

Over the first half of 2023, Carbon Tracker published a research series which evolved from initial analysis into future GB power market design, through highlighting the importance of investment in low-carbon forms of flexible supply, before we looked at the issue of electricity transmission gridlock and laid out the risks of a continued stalling of investment in major grid infrastructure[1].

We believe that these are the three key strategic priority areas which government must address to be able to unlock the next wave of investment required to reenergise the power sector’s push for decarbonisation.

While good progress has been made over the past decade in the phase out of coal plant use and in renewable capacity deployment; chronic underinvestment in the country’s transmission system infrastructure and in forms of low-carbon flexible capacity means rapidly increasing amounts of clean, lower-cost electricity are being wasted while unabated gas-fired power stations are called upon to supply instead.

The deadline for delivering on a carbon-free electricity sector is not until 2035, yet policymakers clearly need to concentrate on unlocking the next wave of investment needed in a more urgent timescale, in view of increasing concern about the climate science and the imperative to accelerate the energy transition.

Some now argue that ongoing geopolitical challenges – such as Russia’s war on Ukraine – have elevated energy security over climate concerns in the context of the energy trilemma. But we strongly rebut that: we still conclude from our research that delivery of 100% clean power supplies (for the UK and also for Europe) still represents the most cost-effective and energy secure route for the future, while also addressing the climate crisis.

This briefing presents the key recommendations that will allow policymakers to make immediate progress in the delivery of all three arms of the trilemma for the GB power sector:

  1. Accelerate deployment of strategic new grid infrastructure by streamlining the permitting process and employing anticipatory investment approach.
  2. Develop a strategic plan for the decarbonisation of GB power system flexibility services that identifies ways to incentivise accelerated capacity deployment.
  3. Improve the efficiency of the electricity market by introducing stronger locational signals.

[1] Marginal Call – February 2023, Blog – April 2023, Enabling the UK power sector’s transition – May 2023, Gone with the wind? – June 2023