REPORT - Decarbonising the power sector - Department for Energy Security & Net Zero

In 2019, the government set a target to achieve net zero greenhouse gas emissions by 2050. In February 2023, the government established the Department for Energy Security & Net Zero (DESNZ), which has overall responsibility for ensuring the government achieves its power sector ambitions. This report sets out the main challenges that DESNZ faces to decarbonise power. We have assessed the progress DESNZ has made since it set the ambition to decarbonise power by 2035 and examined how well it is set up to oversee future progress. We use offshore wind and nuclear power as examples of zero and low-carbon generation to illustrate some of our points. We recognise that DESNZ has made less progress since 2021 with establishing its long-term delivery plan than it intended because it needed to shift focus to respond to short-term challenges on energy supply and the cost of consumer bills. This report is therefore an early assessment in which we set out potential risks DESNZ needs to manage and make recommendations aimed at supporting DESNZ as it develops its plan. Decarbonising power is the backbone of the government’s plan to achieve net zero. Although power sector emissions have reduced significantly over the past three decades, DESNZ cannot be complacent about the challenges involved in decarbonising further while continuing to ensure a secure supply that meets the predicted electricity demand increases. This will require substantial investment in new capacity, alongside system-wide modernisation, and needs a joined-up approach to ensure changes happen in sequence and with coherence. The longer DESNZ goes without a critical path bringing together different aspects of power decarbonisation, the higher the risk that it does not achieve its ambitions, or it does so at greater than necessary cost to taxpayers and consumers. While the recent energy crisis has understandably delayed DESNZ’s progress in establishing a longer-term delivery plan for decarbonising power by 2035 it has reinforced the importance of ensuring that plan is resilient to external shocks.