The report has found that electrification will make up 60 percent of emissions reductions by 2040, including decarbonising the grid and replacing fossil fuel cars and heating systems with electric vehicles (EVs) and heat pumps. Currently, the world invests almost twice as much in clean energy as it does in fossil fuels, with clean energy investment expected to reach $2 trillion in 2024.
Investment in the required technologies will create savings over time, achieved on a cross-economy basis during the Seventh Carbon Budget period (2038 – 2042). Those savings will increase to 2050 and beyond, the cost of delivery estimated by the CCC at 0.2 percent of GDP per year on average.
This in turn will deliver cheaper bills, energy security and private sector investment in infrastructure and new technologies. Energy bills will become around £700 cheaper than currently, with household driving bills predicted to be the same.
Energy bills are also predicted to become 15 times less sensitive to spikes in energy prices in 2040.
Private sector investment will fund, on average, 65-90 percent of the financing requirement from 2025 to 2050, with public spending never exceeding 2 percent of total managed public expenditure per year.
“The Committee is delighted to be able to present a good news story about how the country can decarbonise while also creating savings across the economy” said Professor Piers Forster, Interim Chair, CCC. “For a long time, decarbonisation in this country has really meant work in the power sector, but now we need to see action on transport, buildings, industry, and farming. This will create opportunities in the economy, tackle climate change, and bring down household bills. Our analysis shows that there is no need to pitch action on climate change against the economy. We will need Government and business to deliver the investment, but we are confident that this Seventh Carbon Budget offers a secure, prosperous future for the UK.”
EVs are already beginning to have a measurable effect in emissions reduction, and this will accelerate over forthcoming years as prices fall and sales grow. Fully electric options will account for nearly all new car and van sales by 2030 and make up over three-quarters of the fleet on the road by 2040.
“To keep the journey to net zero on the right side of the road, calls for smarter grid technology to power tomorrow’s EVs” added Dr Vincent Thornley, Managing Director of British engineering company Fundamentals. “This shift to all electric car sales by 2030 is complex and will require astute navigation from grid operators. The UK’s electricity infrastructure needs to adapt to accommodate the significant surge in demand from home chargers. This is quite a shift, when you consider how that impacts the distribution of energy supply and demand. And it requires smart automatic voltage controllers to enable substations to respond immediately to sudden changes in supply and demand, from EV chargers. The good news is we are seeing lots of innovation in the grid and also in EV charging and storage. Renault’s new domestic EV wall-box, for example, has its own smart tariff supply contract. This is a game changer, as it is effectively a flexible energy storage system on wheels. It has enormous potential to save consumers a lot of money, help grid operators manage peaks, while cutting carbon emissions significantly.”
Greg Jackson, Founder of Octopus Energy Group, said that electrification is a triple win, in that it cuts emissions, slashes bills, and protects households from soaring gas prices.
“The UK has among the highest electricity prices in Europe right now” Mr Jackson explained. “Shifting levies that make electricity artificially more expensive than gas and introducing zonal pricing is critical for driving down bills for households and businesses across the country. It should be an urgent priority for government action.”
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