1 Introduction

Energy demand is the outcome of demands for energy services (such as thermal comfort, nutrition, and mobility), some of which are essential to life and most of which are widely accepted as important in a modern society.

The scale of these energy service demands and the efficiency with which they are delivered together determine the size of the energy system. Because current global energy supply is dominated by fossil fuels, the size of the energy system determines the scale of decarbonisation or carbon removal required to mitigate climate change.

Global scenarios that deliver a 1.5ºC target include energy supply changes and/or the rapid roll out of CDR technologies along with energy demand reductions through improved energy efficiency (IPCC, 2018). According to Brockway et al. (2021), energy efficiency improvements are projected to provide 40% of the planned global reductions in GHG emissions over the next 20 years. The International Energy Agency’s net-zero analysis suggests a global reduction of 17% in energy demand between 2020 and 2050 while increasing energy service demands (IEA, 2021, pdf).

At present, change is not occurring at the speed required. Globally, renewable energy supply increased by 75 million tonnes of oil equivalent (Mtoe) in 2019. At the same time, energy demand grew by 120 Mtoe (IEA, 2019). Therefore, the current increase in renewable energy did not meet growing demand for energy, let alone replace the existing use of fossil fuels. In the UK, energy demand was at its high point in 2001. Since then there has been a decline with 2018 being 11% lower than in 2001. However, in recent years these reductions have ceased, with no notable reduction in UK energy demand for the past 6 years. This has allowed the expansion of renewable deployment to contribute to declining fossil fuel use and lower emissions.

However, current rates of displacement of fossil fuels are not at a pace consistent with the UK’s 2035 emission reduction target. To ensure that reductions in use of fossil fuels occur at the pace required to meet the UK’s climate ambition, both increased rates of renewable energy deployment and faster absolute reductions in energy demand are required.

At present, the UK Government has no comprehensive plan to reduce the UK’s energy demand (There are a number of sector level strategies that define an important role for energy efficiency. An example is in the Industrial Decarbonisation Strategy. However, there is no economy-wide description of the role of energy efficiency in GHG mitigation). This report, undertaken by the Centre for Research into Energy Demand Solutions (CREDS), provides the most detailed assessment to date on the potential to reduce the UK’s energy demand by 2050. It brings together experienced modelling teams in the UK to construct a number of scenarios that demonstrate the contribution of energy demand reduction to achieving net-zero by 2050 and more importantly, a 78% reduction by 2035. More broadly, the report considers how reducing energy demand changes the need for emission reductions through the decarbonisation of energy supply and CDR.

This is achieved by undertaking the following steps.

1. Sectoral analysis of final energy demand up to 2050 for all the major energy service demands (mobility, shelter, services, nutrition, materials and products) for two energy demand reduction scenarios.
2. Use of the TIMES modelling framework to provide a comprehensive net-zero scenario for the UK based on our two energy demand reduction scenarios considering the changing contribution of energy supply decarbonisation and CDR.
3. Consideration of the social, cost and economic implications of the two low energy demand scenarios.
4. Discussion of the broader implications of achieving energy demand reduction in the UK.
5. The overall aim of the report is to fill an important gap in the UK’s net-zero transition by defining the role of reducing energy demand. Section 2 establishes the background to the report, outlining the need for energy demand reduction at the global and national level. It also establishes the importance of energy services to be maintained where necessary and identifies studies that have explored the potential mitigation contribution of energy demand reduction at a global scale. Section 3 outlines the scenario building and modelling approach used to construct our low energy demand scenarios. Section 4 discusses some key findings from our scenario analysis, and section 5 builds upon these to discuss the key implications, broader recommendations and opportunities for further research.