NESO’s Clean Power 2030 report: a call to action for the gas industry

These milestones are a reason for cautious optimism, and as the report confirms, achieving clean power by 2030 is within reach. However, NESO’s CEO, Fintan Slye, reminded the Government that a “once in a generation shift” in approach and in the pace of delivery will be required to transition to clean energy in a secure, reliable and affordable way.

In its first report, NESO highlights two primary pathways to achieve this ambitious target, both of which involve increased electrification of heat, transport and industry:

1. Further Flex and Renewables: This pathway envisions a system based on renewable sources, particularly offshore wind (50 GW), and no new dispatchable plants, supported by energy storage and demand-side flexibility.
2. New Dispatch: This scenario sees a slightly lower offshore wind capacity (43 GW) but includes the development of new dispatchable plants using either hydrogen from low carbon sources or carbon capture and storage (CCS).

Both pathways were developed from data outlined in the Future Energy Scenarios, with adjustments based on new challenges, data from stakeholder engagement sessions, and a deeper assessment of 2030 pipelines.

Is clean power by 2030 achievable?

The report highlights the challenges of the transition in terms of pace of delivery and synchronisation across several sectors, but it also stresses that achieving net zero power by 2030 is achievable. The necessary network expansion work is underway, green tech is available at a reasonable cost, and there are suitable ways to keep the system reliable and secure during the transition and beyond.

While the foundations are in place, an investment of £40 billion annually, on average, will be needed to finance the clean power transition. With the right policy, NESO believes that this will not negatively impact consumers, but will rather offer the chance to grow local economies and create new job opportunities. The aim of this investment is to create a net zero power system where renewables supply at least as much power as the nation consumes, with unabated gas contributing less than 5% a year.

As the role of gas-fired power stations decreases, offshore wind is expected to become the bedrock of the new system and provide over half of Britain’s generation, with inshore and solar providing another 29%. This will require a drastic expansion of our wind generation infrastructure, including almost 1,000 km of onshore and over 4,500 km of offshore network builds, as well as associated distribution system enhancements.

Key takeaways for the gas industry

While the report heavily focuses on electrification, there are some important messages for network operators and stakeholders in the gas sector.

1. Natural Gas a transitional fuel: With electrification taking centre stage, gas-fired power stations are only expected to generate less than 5% of our energy mix. The reduced demand will inevitably affect gas networks’ operational models, impacting revenue streams and asset use. However, new opportunities might come from the development of hydrogen and CCS infrastructure.
2. Contributing to system flexibility: Our future energy system will rely heavily on increased flexibility, including demand-side responses and energy storage, to balance the variable nature of renewables. Gas networks can enhance system flexibility by supporting the integration of low-carbon dispatchable technologies like hydrogen and CCS.
3. Embracing cross-sector collaboration: A key challenge is making sure several elements of the power system deliver simultaneously and at maximum capacity, but without overheating supply chains. Achieving this requires improved coordination between gas and electricity networks. As the report highlights, “failure in any single area – generation, flexibility, networks – will lead to failure overall”.
4. Regulatory change: The expansion and integration of clean power will involve changes in regulatory frameworks that could influence how gas networks plan and fund their operations. This may include adjustments to operating expenses (Opex) and capital expenditures (Capex) to accommodate low-carbon technologies and system enhancements. The report also emphasises that reforms in planning, consent processes, and market structures are crucial to achieve the clean power goal, and that streamlined regulatory and policy frameworks will be key to support swift decision-making and investment.
5. Consumer benefits: If executed correctly, the clean energy transition will not raise prices for consumers and will limit exposure to volatile international gas prices. However, effective communication and stakeholder engagement will be crucial in addressing consumer concerns and aligning the efforts of industry, Government and the public towards net zero goals.

Our role in supporting the transition

The NESO report stresses the need for an integrated and proactive approach across all energy sectors. Despite the challenges, the report also highlights opportunities for gas networks and other market participants to evolve and play a strategic role in supporting the UK’s clean power ambitions.

As the Central Data Service Provider for Britain’s gas industry, Xoserve is dedicated to supporting the transition to a clean energy future. By utilizing our enhanced data-sharing capabilities and working collaboratively with customers and stakeholders, we aim to enable advancements in low-carbon technologies, ensuring a seamless energy transition. By fostering strong partnerships across the industry and beyond, we are confident in our ability to address the challenges outlined in the NESO report and contribute to the progression of a decarbonised energy system.

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To learn more about how Xoserve supports the decarbonisation of gas, take a look at our decarbonisation knowledge centre.

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