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Briefing sheet

The energy policy 'Trilemma'

01 May 2015

The challenge facing energy policy is often described as a "trilemma". It includes the three vital aspects of decarbonisation, security of supply and cost.

The energy policy 'Trilemma'
Low carbon energy technologies have a key role in addressing elements of the trilemma.

What is the energy trilemma?

The challenge facing energy policy is often described as a "trilemma". Three vital, but often competing, policy outcomes must be delivered:

Decarbonisation – carbon and other greenhouse gas (GHG) emissions from energy supply and use must be reduced in order to reduce climate change impacts

Security of supply – an adequate security of energy supply must be maintained, including resilience to both short-term and long-term challenges

Cost – the cost of energy must be affordable for consumers

Balancing these three policy drivers is complex. Action must be taken on decarbonisation and security of supply. But measures cannot be considered in isolation and those selected must be cost-effective.

A key conclusion is that all types of energy technology have a role to play:

  • One single low carbon technology cannot deliver the scale of change required – all cost-effective low carbon technologies will be needed
  • Reducing energy demand is essential, in addition to changing to low carbon energy sources and improving efficiency of energy use
  • Fossil fuels will continue to have a role in security of supply for many years to come, although the quantity used will need to reduce

Existing Policy Measures

A number of policy mechanisms are already in place at international, European and UK levels to address elements of the trilemma. Significant ones include:

  • The UN Conference of Parties process, which has the objective of securing a worldwide agreement on managing and adapting to climate change. The next major event, COP21, takes place in Paris in November 2015
  • The European Emissions Trading Scheme, a market-based mechanism that places a price on carbon dioxide emissions
  • Electricity Market Reform (EMR) in the UK, which has introduced a capacity market to deliver security of supply and contracts for difference for low carbon electricity generation
  • Prior to EMR, a range of UK policy initiatives has existed to promote renewable energy at all scales, including the Renewable Obligation, Feed-in Tariffs, Renewable Heat Incentive and Renewable Transport Fuel Obligation
  • UK policy initiatives on energy efficiency, including the Climate Change Levy, Carbon Reduction Commitment and Energy Companies Obligation

More detail on these policy measures is available in our Climate Change Policy Mechanisms briefing sheet.

The Contribution of Civil Engineers

Civil engineers have a major role to play in delivering solutions to the energy trilemma:

  • Constructing new energy infrastructure, including low carbon electricity generation and electricity transmission
  • Integrating energy efficiency measures into all aspects of the built environment
  • Innovating to deliver cost reductions in delivering decarbonised energy and increasing resilience
  • Controlling and limiting all potential impacts of energy infrastructure on the environment (climate change – but also air, water and land)
  • Using low carbon materials and methods for construction
  • Providing the knowledge, skills and people to make low carbon energy a reality
  • Advising on the policy frameworks that are required for investor confidence and a stable long-term vision for supply, while retaining flexibility and market signals in delivery

Meeting the Trilemma Challenges

In our State of the Nation 2014 report, we identified three immediate, specific policy actions to deliver progress on the trilemma:

  • Government needs a more determined approach through policies, behaviours and technologies that actively drive energy demand management. It should look to bolster the attractiveness and pace of existing schemes such as the Green Deal and smart metering
  • Parliament should enact the secondary legislation to implement Electricity Market Reform (EMR) by the end of the 2010-15 Parliament (2010-2015), establishing long-term investor confidence and entrenching cross-party support for electricity decarbonisation
  • The Office of Gas and Electricity Markets (Ofgem) should have its remit for resilience strengthened to factor in future demands on energy capacity from other infrastructure sectors and to improve resilience against interruptions caused by extreme weather events

The report also recommended the following objectives for delivery by 2018:

  • Sufficient ongoing investment confidence to provide security of the electricity energy supply; capacity margins during peak periods that ensure the UK continues to have sufficient generating capacity to meet demand
  • Clear decarbonisation pathways to 2030 that demonstrably put the UK on the road to its 2050 commitments

Further Reading

A number of other ICE briefing sheets provide added background on aspects of the trilemma:

  • Ben McAlinden, manager (international partnerships) at Royal Academy of Engineering