To meet the 2050 target under the Climate Change Act cost-effectively, it is likely that the heat sector will need to be close to completely decarbonised.
This will have significant – and currently uncertain – consequences for the future role of the gas sector. Changes to factors such as the vector fuel, the scale of network usage, or end user heating systems will result in the emergence of different market models and requirements for regulatory frameworks to support the required levels of investment. As part of its wider research into heat decarbonisation, BEIS has commissioned Frontier Economics to:
- Identify what market models and regulatory frameworks may look like in a 2050 steady state under a range of scenarios for a low carbon gas system, and to understand their strengths and weaknesses.
- Look at the risks, uncertainties and barriers there may be in the transition to a low carbon gas system, and to present options for how these may be managed or overcome.