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Ofgem’s Decarbonisation Action Plan for UK’s Net Zero Goals

Jonathan Brearley, new chief executive for UK’s energy regulator Ofgem, has unveiled the firm’s Decarbonisation Action Plan on his first day of office.

The plan is designed to build a supportive system that fosters the growth of renewable and 10 million electric vehicles by 2030. It also pushes for the creation of an offshore grid to increase offshore wind generation up to four times within ten years. Furthermore, it also sets up an innovation fund to invest in smart solutions that tackle climate change.

Brearley recognises the need for a more flexible energy system to respond to peaks and troughs in the demand-supply equilibrium, calling on the industry players to rise to the challenge and collaborate with Ofgem and the Government to decarbonise the British energy system at the lowest costs.


Nine-action Plan

Ofgem’s Decarbonisation Action Plan is the regulator’s answer to difficult questions on how to achieve net-zero in the transport and heating sector, and encourage innovative solutions to deliver low-carbon services and products for consumers.

The document highlights nine key actions to be taken in the next 18 months to spur the journey towards a net-zero economy. These nine steps are devised to meet the decarbonisation target at a cost agreeable to consumers.

First, Ofgem will set regulations in place to ensure that network companies make efficient investments that deliver affordable green energy.

Second, the plan moves to set up a fund that covers worthy investments on innovative solutions, such as advanced technologies and platforms that can help tackle climate change.

It will explore potential regulation supporting the development of an offshore grid to increase wind-powered generation by 2030.

Ofgem will also push for government and industry support to encourage inexpensive low-carbon heating options.

The fifth step is reviewing the management of the energy system to ensure that it matches the goal for a net-zero future.

Ofgem is set on encouraging more efficient ways of using electricity, such as selling power stored in car batteries back at peak times and charging electric vehicles during the night or non-peak hours.

The seventh action is to support an energy network capable of powering up to ten million electric vehicles on the road by 2030, encouraging more drivers to go electric.

Ofgem will also help kickstart innovative ideas by energy suppliers to develop low-carbon products and services that will benefit consumers.

Lastly, it will make big decisions head-on and apply an adaptive approach to regulation to keep up with the fast-paced changes in the energy market.


The Net-zero Challenge

The UK has made leaps in reducing greenhouse gas emissions, falling by over 40% since 1990, which is more than any other advanced economies in the world. The power sector has achieved an emission reduction of almost two-thirds due to the combination of solar, wind, and gas replacing coal-fired power generation. Nearly half of the electricity in 2019 was taken from renewable or low-carbon sources.

However, carbon reductions, particularly in the transport and heat sectors, have been more limited. Emissions from space heating fell 20% since 1990, while transport emissions have risen by 4% due to efficiency gains being offset by increased demand.

Only 5% of the energy used for heating homes today are sourced from low-carbon generation, which is one of the significant challenges to be met to achieve the net-zero goal by the deadline. From only 230,000 electric vehicles today, the UK needs to step up to increase this number to 39 million by 2050.

Achieving all these objectives entails a reliable energy system that supplies reliable energy to consumers and the development of more renewable and low-carbon electricity. New technologies, AI and better data processing will all play a role in boosting the flexible demand.


Ofgem’s Decarbonisation Action Plan needs the engagement of customers to ensure that the energy sector sees a consumer-led transition via technological innovations, encouraging them to improve how and when energy is used.