The EU target to cut greenhouse gas emissions by 80-95% by 2050 requires radical changes to energy systems. In 2050, two thirds of our energy should come from low carbon sources. Electricity and heat production need to be almost emission-free, despite higher demand.
Only a new energy model will make our system secure, competitive and sustainable. This will involve increasing electricity generation from renewable sources, using storage technologies and flexible gas fired generation as a relatively low emission way to complement intermittent renewable generation, exploring the use of carbon capture and, in some favourably disposed countries, increasing nuclear power generation.
Greater energy efficiency will help to deliver policy goals supported by new technologies such as smart metering. New approaches to heat supply need to be identified and implemented. Demand response will also increase the options for managing less predictable network flows from renewable energy. Energy taxes, tradable emissions rights, auctions for renewable generation contracts and renewable purchase obligations have all affected energy markets.
Can markets deliver affordable, diverse, secure and environmentally-sound energy supplies? How should intervention to address environmental concerns be structured? We work with governments, regulators and companies to analyse these questions and develop solutions.