The Report

Our study, The role of energy demand reduction in achieving net-zero in the UK, was undertaken by the Centre for Research into Energy Demand Solutions (CREDS), and provides the most comprehensive assessment to date of the role of reducing energy demand to meet the UK’s net-zero climate target.

The study brought together 17 energy demand modelling experts from within CREDS to provide extensive detail on the possibilities to reduce energy demand in every sector. These sectoral reductions in energy demand are brought together into a whole-system modelling approach, to understand the potential contribution of energy demand reduction to support climate action in the UK.

Key findings

1. Without substantial reductions in energy demand, meeting climate targets becomes extremely expensive due to the substantial increases in the size of the energy system and the installation of expensive Carbon Dioxide Removal (CDR) technologies. Energy demand reduction is a significant enabler of a cost effective, timely and de-risked net-zero target.
2. Meeting carbon budgets aligned with net-zero by 2050 without substantial reductions in energy demand is extremely difficult and undesirable. Without reducing energy demand all greenhouse gas (GHG) emission reductions would need to be delivered through decarbonisation of energy supply and engineered CDR technologies.
3. The UK could more than halve its energy demand by 2050, making a substantial contribution to global and UK climate goals. Existing policy instruments would only reduce energy demand by 5% by 2050. We recognise there a number of recent proposals reflecting increasing ambition but many of these have not translated into fixed policy instruments to date. Our focus is on policies actually implemented, not pledges of ambition, commitments or strategies.
4. Without a stronger role for energy demand reduction, the electricity system needs to be four times the size that it is today. Substantial energy demand reduction will moderate the expansion of the electricity system to double its current size. This makes system expansion more achievable in the coming decades. This is not only true of the electricity system but also in demand sectors that drive its growth, where the system will be much smaller when compared to our reference scenarios e.g. transport.
5. There are numerous co-benefits that could improve quality of life while reducing energy demand. People can still have access to local services, leisure and holiday activities, and diverse employment opportunities etc. Co-benefits to pursuing energy demand reduction include improved air quality, warmer homes, healthier diets and increased opportunities for exercise.
6. Energy demand reductions are possible across all sectors. Reducing energy service demand is particularly useful in “hard to mitigate” sectors such as steel production, aviation and agriculture. The response is different for each energy service and must include strategies to protect and enhance quality of life while reducing energy services as well as more traditional policy areas related to energy efficiency.
7. Some energy demand reduction measures offer earlier mitigation opportunities and a greater reduction in cumulative emissions. This would allow the UK to increase its climate ambition further in the next decade, establishing a role as a key leader in addressing the climate crisis.

Key conclusions

Without energy demand reduction we will not achieve the UK’s Sixth Carbon Budget target in 2035 of 78% below 1990 levels, or our 2050 net-zero target. The UK Government has yet to define how energy demand will contribute to achieving our climate ambitions. Given the evidence presented in this report, it is imperative that the UK Government outline a detailed strategy and supporting policies to enable energy demand reduction to fulfil its necessary role in achieving rapid emissions reductions in the UK.

The limited government focus on energy demand has mostly been on improving technology efficiency with little attention to the other mechanisms that involve reducing the need for energy service demands. Reducing energy demand to the extent, and at the speed, that is needed requires both an acceleration in energy efficiency improvement and shifts in the consumption patterns of products and services, travel and diets to avoid the consumption of energy services. None of our Low Energy Demand (LED) scenarios compromise our quality of life. Instead, they seek to enhance it with numerous co-benefits associated with healthier diets, active living, clean air, safe communities, warm homes, rebalancing work and driving down inequality. All this is possible while halving the UK’s energy demand.

There are clear advantages associated with energy demand reduction in achieving our path to net-zero compared to other options. Lowering energy demand has five important effects:

1. It accelerates transitions to a low carbon energy supply in the short-term by directly reducing our need for fossil-fuel energy production.
2. It reduces the technical challenges associated with building out larger low carbon energy supply systems that other futures require.
3. As result, it reduces the overall investment requirements to achieve net-zero GHG emissions and therefore household and business energy bills.
4. It provides flexibility to ratchet up climate ambition further.
5. It reduces reliance on risky CDR technologies.

Pursuing energy demand reductions lowers the risks of failing to achieve the UK’s climate ambitions.

Broader implications

Our scenarios demonstrate that there is a significant gap between our current trajectory and the pathway necessary to achieve our net-zero goal. Here we outline five broader implications of our analysis.

1. Changes are required in the way we live, move and consume. The majority of changes needed to deliver the UK’s 2035 and 2050 targets will have an impact on both technology and the way the way we live. To reach 2035 targets, early action to deploy both clean technologies and support lower-carbon lifestyles is urgently needed.
2. The challenge is truly systemic in nature and therefore requires oversight of the role of different actors to ensure system change. This leadership must be undertaken by Governments so that it can be overseen by democratically elected representatives. It is only possible if the UK Government has a clear vision outlining the role of different agents in achieving the goal of improving quality of life within net-zero aligned carbon budgets. Much of this change will stem from devolved, regional and local activities, and require a coordinated approach between different levels of government, communities, businesses and other stakeholders. Delivery is not solely undertaken by Government but roles are clearly defined and all agents are moving in the same direction.
3. The response to reducing our energy demand does not mean a collection of energy policies alone but aligned policies in all areas. The system is interconnected in that demands in certain sectors relate to practices and behaviours in others. This intrinsic link implies that some policies necessarily bridge any traditional divide. .
4. Examples of this would be infrastructure development, innovation funds, recovery packages, procurement, planning and public health. It is policy coherency that delivers the scale of change required, not the piecemeal introduction of new energy policies alone.
5. This analysis raises questions on the measurement of progress and the tools applied to assess policy options inside Government. All UK Government policies are assessed for their “economic efficiency”, rather than their broader value to both society and net-zero goals. While adjustments are made in economic analysis to try and address these exclusions, these are done using approaches that monetise social and environmental gains. An alternative approach is to create a strong vision of the UK that aligns improvements to the quality of life of citizens, whilst meeting net-zero targets. This involves monitoring and modelling a range of quality of life indicators and relevant Sustainable Development Goals (SDGs), and aligning these with net-zero goals. All policies, whether climate-related or not, need to be assessed against these broader objectives.
6. Social legitimacy is critical to delivering change. The changes required to deliver ambitious climate goals will have impacts on peoples’ lives. The speed and scale of change will make the strategies and policies needed challenging to implement. As highlighted already, this can improve quality of life while reducing energy demand. However, even where there will be significant benefits to society, it requires public understanding and an honest public discussion, to give governments at all levels the social legitimacy to act. This will require deliberative methods such as those used in the UK Climate Assembly and similar exercises undertaken in several localities.

Key recommendations

To achieve this vision, we look to Government to provide the strategies and policies, and therefore recommend the creation of an Energy Demand Reduction Delivery Plan to be created as soon as feasibly possible, recognising the need for cross-departmental collaboration. This must include a quantitative assessment on the role of energy demand reduction in achieving short term carbon budgets and the long term goal of net-zero by 2050, feeding into Government planning on net-zero strategy. The plan must consider the role of energy efficiency improvements and technologies but also extend the analysis to societal changes that shift consumption and avoid unnecessary energy services.

The plan must also consider whether an energy demand target is required to support other important targets. For example, there is a target for the electricity generated by renewables in the UK but not a target on the level of energy demand.

The plan is required to consider whether non-energy policies are aligned with reducing energy demand, or are in fact making the challenge more difficult by increasing energy demand. This is particularly important in the area of infrastructure development, where it is essential to avoid the lock-in of high energy lifestyles. The plan must outline the role of different actors in achieving the reduction in energy demand, including the role of public and private actors for each sector. It is essential that UK citizens are fully engaged and this transition is not seen as a top-down approach to climate policy.

For specific sectors, any assessment considering how to reduce energy demand should consider:

• For agriculture and food, the promotion of healthy diets is essential to ensure that a significantly greater proportion of meals are plant-based and overall calorific intake is reduced in line with health guidelines;
• For industry, with limited energy efficiency improvements in energy intensive industrial processes available, reducing material consumption is essential through the introduction of a targeted resource efficiency strategy;
• For buildings, a triple approach of the rapid roll-out of heat pumps, retrofit of existing building stock and addressing the inefficiency of occupancy rates is required;
• For mobility, the scale of reduction required cannot be achieved with electric vehicles alone but requires a reduction in distance travelled delivered through investment in active travel and not the further expansion of road networks.