Risk profiles of scenarios for the low-carbon transition

Providing energy to an economy through fuel supply chains incurs risks which can be identified and quantified by systematic analysis. Scenario analysis and risk analysis are complementary tools for assessing possible changes to socio-technical systems. Applying a risk evaluation method to published future energy scenarios shows how risk in the energy system might vary with time. In a UK case study six scenarios to 2050 are analysed, focusing on installed electricity generating capacity. Of the seven categories of risk, political risk scored the highest over the whole period. Despite the installed capacity increasing by a factor of up to three by 2050 with reductions in GHG emissions, our analysis projects a reduction in risk and shows how significantly the pathways differ. To indicate the difficulty of such an expansion of the electricity system, we propose the use of a new metric - the Scale of Challenge (SoC) - equal to the total risk score times the installed capacity. The key to achieving a low-carbon transition may lie in moderating exposure to risk. Identifying the origin and type of risk can inform policy since net-zero is not zero risk.

Automated summary

Providing energy through fuel supply chains poses risks, which can be identified and quantified through systematic analysis. Scenario analysis and risk analysis are complementary tools for evaluating changes in socio-technical systems. By applying a risk evaluation method to future energy scenarios, the study reveals how risk in the energy system may change over time. Analyzing six UK scenarios until 2050, the highest category of risk observed throughout the period was political risk. Despite a potential threefold increase in installed capacity and reduction in GHG emissions by 2050, the analysis demonstrates varying levels of risk among pathways. To highlight the challenges of expanding the electricity system, a new metric called the Scale of Challenge (SoC), equal to the total risk score multiplied by installed capacity, is proposed. Moderating exposure to risk may be crucial for achieving a low-carbon transition, as net-zero does not mean zero risk.