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2021 has been a landmark year for UK energy and climate policy. Plans and strategies were announced across many sectors, from offshore wind to how we heat our homes. The UK also hosted COP26 and pressed hard for greater ambition. Now that the spotlight has moved, in this Review, we consider whether plans will be adequate to deliver results.With a focus on gas and the UK continental shelf, industrial decarbonisation, heat, mobility and the environment, we look at developments both at home and internationally and ask whether the UK is a leader in decarbonisation, and if the transition is being managed as well as it could be.

The heating of homes is a major contributor to the UK’s greenhouse gas emissions accounting for 13% of total emissions. 1 This is comparable to the carbon emissions of all petrol and diesel cars in the UK. 2 Meeting the UK government’s net zero emissions goal for 2050 will only be possible by complete decarbonisation of the building stock (both existing and new). While emissions from heating have fallen by 11% since 1990 1, much of which was driven by efficiency programmes and regulation in the period 2002-2012 3, continuing decarbonisation at this pace would get us to zero emissions from buildings in 235 years and fall far short of meeting the 2050 target. Home heating energy consumption is also at risk of increasing further. Home working has developed substantially during the COVID-19 lockdown and is widely expected to remain at higher levels than pre-crisis 4 meaning that people may require houses which are on average warmer during the heating seasons. Data shows that domestic heating energy use was up by 15% during March when the lockdown started compared to March 2019 5,6., The potential for more time spent at home will make heat decarbonisation and the thermal comfort and health associated with homes even more important. There is uncertainty over the extent to which heating might practically be decarbonised in the future and what the optimal technologies may be. The aim of this paper is, to provide some clarity about the pathways forward, focusing on the next 5-10 years. We also draw on lessons learned from international examples for smart electrification of heating which we identify as one of the key strategies for decarbonisation of residential heat – at least in the short term.

The present report is a public deliverable (D1.2) of the MAGNITUDE H2020 funded European project. The MAGNITUDE project aims at developing business and market mechanisms, as well as supporting coordination tools to provide flexibility to the European electricity system, by enhancing the synergies between electricity, heating/cooling and gas systems. Seven real-life case studies of multi-energy systems of different sizes and technological features located in seven European countries are used to provide the data foundation for the assessment and analysis carried out in the frame of the project.

Traditionally, power system operation has relied on supply side flexibility from large fossil-based generation plants to managed swings in supply and/or demand. An increase in variable renewable generation has increased curtailment of renewable electricity and variations in electricity prices. Consumers can take advantage of volatile electricity prices and reduce their bills using electricity storage. With reduced fossil-based power generation, traditional methods for balancing supply and demand must change. Electricity storage offers an alternative to fossil-based flexibility, with an increase expected to support high levels of renewable generation. Electrochemical storage is a promising technology for local energy systems. In particular, lithium-ion batteries due to their high energy density and high efficiency. However, despite their 89% decrease in capital cost over the last 10 years, lithium-ion batteries are still relatively expensive. Local energy systems with battery storage can use their battery for different purposes such as maximising their self-consumption, minimising their operating cost through energy arbitrage which is storing energy when the electricity price is low and releasing the energy when the price increases, and increasing their revenue by providing flexibility services to the utility grid. Power rating and energy capacity are vitally important in the design of an electricity storage system. A case study is given for the purpose of providing a repeatable methodology for optimally sizing of a battery storage system for a local energy system. The methodology can be adapted to include any local energy system generation or demand profile.