Ofgem’s Decarbonisation Action Plan

Publication date
3rd February 2020
Information types
Policy areas

In June 2019, Parliament went beyond the UK’s existing commitment to an 80% reduction on 1990 emissions levels by legislating for a net zero greenhouse gas emissions target by 2050.

The UK has made significant progress in decarbonising the economy. Overall emissions have fallen by 40% since 1990; more than any other advanced economy. For example, almost half our electricity came from renewable or low carbon sources last year.

However, significant challenges remain if we are to continue on the path to meet our 2050 goals. The way we heat our homes and our transport needs to transform. Only 5% of the energy used to heat our homes today is from low carbon sources and our use of electric vehicles may need to grow from 230,000 today to 39 million by 2050. To meet the challenge of net zero, we must now go further and faster, especially in decarbonising transport, heating and our industrial use of energy.

To achieve net zero will require a huge increase in renewable and low carbon electricity, especially to meet new sources of demand such as electric vehicles. We will also need an energy system which can continue to reliably supply energy when consumers need it. Given the need for new investment, it is imperative that we build an energy system that is as efficient as possible. New technologies, better use of data and AI will also be needed to boost flexible demand.

The transition will also require consumers to be engaged - and to see that the costs and benefits of the transition are falling fairly. How and when energy is used must change. This opens up opportunities for a consumer-led transition, enabled by new technologies.

This document sets out the actions we will take in the next 18 months, beginning our next steps on an urgent, but decades-long journey towards net zero. We will work closely with government, industry and consumers to do this at the lowest cost. Our approach will continue to evolve and we will develop new actions and programmes as the opportunities arise.

Our actions

  1. We will build adaptability into our price controls to ensure network companies invest efficiently and are able to adapt to changes in technology and infrastructure.
  2. We will set up a regulatory fund to unlock investment in innovative solutions to tackle climate change.
  3. We will explore, with government and industry, opportunities for greater coordination to enable rapid expansion of an offshore grid at lowest cost.
  4. We will harness our existing knowledge and expertise to help government and the industry develop cost-effective and low risk options to decarbonise heating.
  5. We are reviewing the way our energy systems are managed to ensure they are fit for a net-zero future.
  6. We will create a more flexible electricity system to ensure that consumers will benefit from the lowest cost transition to a reliable net-zero system.
  7. We will develop a regulatory strategy on electric vehicles to support roll out and maximise the benefits to consumers.
  8. We will support innovation and experimentation, particularly in the retail market, to create low carbon products and services that will directly benefit consumers.
  9. We will respond to the need to take big decisions facing a deeply uncertain future by becoming more adaptive in the way we work and in our regulatory approaches.