Understanding the energy system and energy-economy and impacts of low energy demand futures

Energy demand reduction (EDR) is one of three levers (alongside renewables and carbon sequestration) that can be utilised to reduce GHG emissions, achieved via energy efficiency (lower energy inputs for the same output) or energy sufficiency (changing consumption patterns to lower energy demand, but above minimum levels to achieve a decent living standard for everyone) [3]. EDR in the UK has focussed on energy efficiency, but with limited impact, due to ineffective policies (e.g. the Green Homes Grant), or due to rebound effects limiting the energy reduction impacts.

Meantime, looking beyond energy efficiency to instead consider how we consume energy through sufficiency measures, are largely ignored by policymakers in the UK [4]. The end result is an over-reliance on renewable technologies to reduce short-term emissions - potentially at an infeasible scale, and with additional energy system costs borne by government, households and industry.

The need for further energy sufficiency research has led to a proliferation of low energy demand scenarios at the national [5] and international level [6,7], contributing to our understanding of how we can achieve demand reduction from a whole-systems perspective. These scenarios have broadened the scope of EDR to include measures beyond energy efficiency, based on avoid-shift-improve or sufficiency-based frameworks.

However, current energy-economy-environment models are not designed to capture the impacts of such large-scale, unprecedented reductions in energy demand due to weak energy-economy linkages [2]. Thus, both economic impacts of such low energy demand futures, and the broader conditions required to achieve the whole-system energy transition required, need urgent exploration in the UK context. In short, current approaches are not able to study this key question.

Hypothesis

EDR is of growing importance in climate change mitigation research. Significant reductions in energy demand could have substantial non-trivial impacts on GDP, employment and investment requirements across the energy system, amongst other factors, which are poorly understood and act as potential barriers to the necessary energy system transformation. A better understanding of these impacts will allow us to assess the required conditions needed to reduce energy consumption across the economy.

Aims and objectives

The project aim is to establish the energy-economy effects of a low-demand energy system. The objectives are (1) Develop and use a variety of energy-economy modelling techniques (econometrics, input-output analysis, systems dynamics, integrated assessment models) to quantify the socio-economic impacts of various energy system projections; (2) Better understand energy supply-demand relationships, including investment requirements and the potential for rebound and non-linear effects; (3) Identify the various barriers to energy system transformations and energy demand reduction.

References [1]. Barrett, J., et al., 2021. The role of energy demand reduction in achieving net-zero in the UK. CREDS. Oxford, UK

[2]. Sakai M, et al. Thermodynamic Efficiency Gains and their Role as a Key 'Engine of Economic Growth'. Energies. 2019; 12(1):110 [3]. Darby, S. and Fawcett, T., 2018, November. Energy sufficiency: A concept paper for ECEEE.

[4]. Johnson, E., et al., 2023. Comparative analysis of UK net-zero scenarios: The role of energy demand reduction. Energy Policy, 179, p.113620

[5]. Barrett, J., et al., 2022. Energy demand reduction options for meeting national zero-emission targets in the United Kingdom. Nature Energy, 7(8), pp.726-735 [6]. Grubler, A., et al., 2018. A low energy demand scenario for meeting the 1.5 C target and