Independent and technology-agnostic thought leadership tackling the hardest challenges on the way to Net Zero
Designing policies and regulations to create a Net Zero energy market
Energy Systems Catapult oﬀers energy policy, regulatory, and market design expertise that combines deep understanding of technology, economics, and policy, informed by cutting-edge modelling and evidence-based analysis.
Understanding the reform agenda requires deep knowledge of existing policy and regulatory frameworks, the processes of government and regulators, and the technology and economics of low carbon energy options for homes and businesses.
We work with Government, regulators, SMEs, innovators, and academia to develop practical, solution-focused market design, policy, and regulatory options.
- Policy interpretation of energy system modelling, engineering, and infrastructure transitions
- Economy-wide span of carbon policy knowledge
- Electricity market design and policy analysis
- Heat decarbonisation policy, local energy planning and social policy dimensions of energy.
- Deep understanding of regulatory challenges raised by low carbon technical and social change
- Incentive design and low carbon regulatory mechanisms
- Deep understanding of economic regulation of utilities
- Network price controls and incentives.
- Substantial experience of economic policy appraisal and impact assessment
- Tariﬀ design and analysis, network charging policy, and regulatory economics
- Environmental and welfare economics perspectives and analysis, including externality valuation.
- Engagement on policy and regulatory issues with Government and regulatory authorities
- Deep appreciation of the institutional environment for policy decision making.
What we offer
Energy Systems Catapult provides evidence, insights and thought leadership for policy, regulation and market development for Net Zero.
Net Zero Carbon Policy
Developing a sector-led approach to an innovation-friendly, economy-wide carbon policy framework to achieve Net Zero.
Rethinking Electricity Markets
Developing in-depth proposals to reform electricity markets to best enable innovative, efficient, whole energy system decarbonisation.
Zero Carbon Buildings
Six Steps towards an enduring framework of long-term policies needed to drive heat and buildings decarbonisation on a grand scale.
Local Area Energy Planning
Thought Leadership on how to introduce, implement, and integrate our pioneering Net Zero planning process. with existing (or new) governance, powers and duties.
Unique whole systems evidence and insights in response to Government consultations and calls for evidence, to help policy-makers transform the UK energy system to achieve Net Zero targets.Click here
How to work with us
Energy Systems Catapult provides technical, commercial and policy expertise to drive innovation across the whole energy system.
Our independent and technology-agnostic approach, has built a trusted track record in delivering thought leadership, collaborative R&D and commercial commissioning.
Providing a range of capabilities, tools and labs – from world class Net Zero modelling and cutting-edge systems engineering – through to digital and data science and real-world innovation trials that drive start-ups to success.
Supporting energy companies and networks, industrial sites and commercial businesses to navigate to Net Zero.
Collaborate with us
Supporting government, local authorities and innovators to create the new policies, markets, business models and technologies we need to deliver Net Zero.
The Rethinking Decarbonisation Incentives project aimed to develop a coherent set of interlocking sectoral instruments covering all emitting activities throughout the economy, with a linked market for greenhouse gas removals. Our approach involved:
- Working collaboratively with a range of stakeholders across government, industry, and academia.
- Taking a whole systems approach to developing solutions and undertaking high quality analysis by drawing on a range of Energy Systems Catapult expertise.
Current policies comprise of different taxes, subsidies, contracts and regulations, with incentives to cut carbon emissions varying widely across different sectors of the economy and rewards being generally much lower than it needs to be. This makes it very difficult to promote long-term investment and innovation. The Government has published a Clean Growth Strategy, but unlike other jurisdictions (e.g. California and Canada) there is relatively little strategic debate or commitment regarding:
- The economic drivers for decarbonisation,
- Creating an enduring framework for carbon reduction across the whole economy.
The Rethinking Decarbonisation Incentives project has shown that the UK can achieve a balanced economy-wide carbon policy framework to boost innovation and deliver clean growth, consistent with a Net Zero target in 2050.
This does not necessarily require relying on a single ambitious economy-wide instrument, such as a carbon tax or economy-wide trading system. Rather it is possible for the UK to develop a pathway towards more coherent incentives for emissions reduction across the energy system and the wider economy by developing a complementary mix of policies. Carbon standards offer potential to play a key role in this pathway.
Policy and Regulatory Expertise
The Low Carbon Contracts Company (LCCC) is a Government owned entity established to be the counterpart to Contracts for Difference (CFDs), a subsidy scheme designed to encourage investment is renewable energy and other low carbon electricity under Electricity Market Reforms a decade ago.
LCCC commissioned Energy Systems Catapult to assess the impacts of current changes to policies, regulations and market rules – driven by new Net Zero carbon emission targets – on EMR. The interactions are two-way, with the EMR also significantly impacting other policies and markets, so the policy change analysis involved considerable complexity.
The LCCC (and sister organisation – the Electricity Settlements Company) apply two key guiding principles:
- Maintain investor confidence in the schemes
- Minimise costs to consumers
With enhanced awareness and improved foresight, the LCCC and Electricity Settlements Company can implement timely actions to adapt and minimise risks to their mission and the EMR policy.
The Markets, Policy and Regulation (MPR) team at the Catapult undertook a systematic impact assessment of all sources of current changes to policies, regulations and market rules (e.g. strategies, plans, industry codes, policy mechanisms) that might impact the Capacity Market, CfDs, the LCCC and the Electricity Settlements Company. The project compiled a database of some 70 different changes and assessed them against a typology of 20 different impact types. The impact assessment involved analysis from two different perspectives:
- By impact type – such as scheme payments, volume or volatility of levies, costs for the EMR institutions, settlements, metering; and
- By policy/market categories – such as wholesale market, retail market, network regulation, innovation support policy and institutions.
The comprehensive analysis, with attention to collective impacts and interactions, made it possible to identify significant themes for LCCC and the Electricity Settlements Company to consider in managing change.
Collaborate with us
The Markets, Policy and Regulation team is our centre of excellence for energy policy and regulatory knowledge.Contact us
Offering independent and technology-agnostic evidence, analysis and thought leadership to tackle the hardest problems on the way to Net ZeroContact us