National Grid is working on the basis that the UK is not on a trajectory to meet its 2050 decarbonisation target.

The assumption came in the System Operator’s annual Electricity Capacity Report, which assesses capacity needs four years ahead to set targets for the Capacity Market auction. In its assessment for 2022/23, the System Operator’s base case is that progress over the next five years is closest to its ‘Steady Progression scenario’. That scenario encompasses slower decarbonisation, more large gas generation, limited improvements in efficiency, and little electrification of heat. However, it assumes significant adoption of EVs, so smart technology will be important for managing peak demand.

Choosing that scenario means National Grid has used higher peak demand assumptions in assessing how much capacity to acquire in the Capacity Market auction. Peak demand grows to 60.3GW by 2022/23in this scenario, while “the two FES scenarios associated with greater decarbonisation are substantially below this growth rate”, said the Panel of Technical Experts, which assesses the annual Electricity Capacity Report, agreed with National Grid’s assumption.

The panel said, “We agree that this scenario may be most realistic for the next five years and are comfortable with the Base Case appearing to be close to these assumptions despite its longer-term divergence from a policy target.”