Ofgem: Project Discovery - Energy Market Scenarios Report

Project Discovery is Ofgem’s investigation into whether or not future security of supply can be delivered by the existing market arrangements over the coming decade.

Eearly 2009 Ofgem launched Project Discovery with the objective of examining the prospects for secure and sustainable energy supplies over the next 10-15 years. This investigation is wide ranging and uses scenario analysis to put the debate regarding UK energy in the wider global and environmental context. The purpose of the Project Discovery: Energy Market Scenarios report is to consult across all stakeholders on these scenarios.

Ofgem has drawn up four scenarios for the next decade and beyond. Each scenario shows that energy supplies can be maintained, but the analysis exposes real risks to supplies, potential price rises and varying carbon impacts.

Retirements of older nuclear plant and closures of coal and oil plant by the end of 2015 under European environmental legislation could pose a threat to security of supply. Increasing gas import dependency could be exacerbated by growth in gas-fired power generation. Significant changes in the way in which we generate and consume power may be needed to manage the variability associated with increasing reliance on wind power.

High levels of investment are likely to be needed to secure energy supplies and meet carbon targets – up to £200 billion may be required over the next 10-15 years. This would more than double the recent rate of investment.


Consumer bills rise in all scenarios due to the levels of new investment required and increasing costs of carbon, and especially so if oil and gas spot prices spike sharply or continue their underlying rise since 2003. Existing regulatory and market arrangement may well be seriously tested.

Project Discovery team is currently conducting an assessment of these arrangements given the challenges that they have identified, and are considering what policy responses may be required.