Future Energy Pathways (FEP): draft guidance

We are seeking views on our draft Future Energy Pathways Guidance (Guidance), which is directed at the, soon to be established and operational, National Energy System Operator (NESO). ## Who should respond We would like views from the Energy System Operator (ESO) or those that utilise the Future Energy Pathways (FEP), previously the Future Energy Scenarios. We also welcome responses from other stakeholders and the public. ## Background Future Energy Scenarios have been published annually by the current Energy System Operator (ESO) since 2011. They have explored how expected future energy demand and supply could be met by making changes to infrastructure, technology, innovation and consumer behaviour in line with net zero targets. As of 2024, the ESO has moved from the previous scenario-based approach to strategic pathways. Recognising this, here they are referred to as the FEP. ESO will soon be designated as the Independent System Operator and Planner, hold an Electricity System Operator Licence and Gas System Planner Licence, and be known by the company name of National Energy System Operator (NESO). Once created, NESO will have responsibilities across Great Britain’s electricity and gas networks, including all the existing functions of ESO, so it is able to take an enhanced whole system approach to planning and operating the energy sector. In line with its proposed new strategic planning responsibilities, a key objective for NESO will be the delivery of the Centralised Strategic Network Plan (CSNP) announced in November 2022. Amongst many other uses, the FEP will need to support delivery of the CSNP by providing energy modelling input. ## Purpose of this guidance Our draft Guidance is directed at NESO who, once set up, will develop the FEP. It sets out instructions on the processes, content and timeframe for producing the Future Energy Pathways Methodology and Pathways. It also refers to the CSNP Guidance. A draft version of this will be published for consultation in due course. We intend to issue the draft Guidance in line with [draft licence conditions](http://www.ofgem.gov.uk/consultation/national-energy-system-operator-neso-licences-and-other-impacted-licences-statutory-consultation) C15 of the Electricity System Operator Licence and C10 of the Gas System Planner Licence. These licence conditions are not yet in effect. The proposed Electricity System Operator Licence and Gas System Planner Licence are subject to consultation and statutory decisions, therefore, the Future Energy Pathway conditions referred to in the draft Guidance are potentially subject to change. ## Our progress We conducted several consultations between 2021 and 2023. Our consultation in [November 2021](https://www.ofgem.gov.uk/consultation/consultation-initial-findings-our-electricity-transmission-network-planning-review) followed our review of network planning processes and led us to the development of the CSNP. The second consultation in [November 2022](http://www.ofgem.gov.uk/decision/decision-initial-findings-our-electricity-transmission-network-planning-review) outlined that the CSNP may utilise outputs from the FEP. After this, we proposed: * moving towards strategic pathways instead of scenarios in [May 2023](https://www.ofgem.gov.uk/consultation/consultation-future-system-operator-supply-and-demand-modelling) * that the assessment of system need under the plan is extended to 2050 using multiple future energy pathways in [July 2023](https://www.ofgem.gov.uk/consultation/centralised-strategic-network-plan-consultation-framework-identifying-and-assessing-transmission-investment-options). We decided to adopt our previous consultation proposals of developing a set of strategic pathways to net zero in [December 2023](https://www.ofgem.gov.uk/publications/decision-framework-future-system-operators-centralised-strategic-network-plan). ## Before you start Read the draft Guidance. You’ll find it in the ‘Related’ section on this page. You will be asked to comment on different sections of the draft Guidance in relation to our decisions published in [stage one of our 2023 decision](http://www.ofgem.gov.uk/decision/decision-framework-future-system-operators-centralised-strategic-network-plan). These are: * section one: develop a set of strategic pathways to net zero * section two: types of pathways and presentation of non-delivery of net zero futures * section three: the time horizon for pathways * section four: treatment of high-impact, low-probability events * section five: incorporating network constraints into the modelling * section six: improvements to transparency in analysis and outputs * section seven: national and regional outputs * section eight: timing of the FEP publications --- Decision Future Energy Pathways Guidance Publication date: 28 February 2025 Team: Email: Energy Systems Design and Development strategicplanning@ofgem.gov.uk Future Energy Pathways explore different ways of meeting GB-wide energy supply and demand needs as we progress to the 2050 net zero target. The Pathways and their underlying analysis are used by a large range of stakeholders to inform gas and electricity network investment and operability, market design, security of supply planning, and industry forward planning in general, as well as academic research, policy development, and technology innovation. National Energy System Operator Limited (NESO) have new licence conditions requiring it to produce Future Energy Pathways, and a Methodology for developing them. In August 2024 we consulted on an associated Guidance document to those licence conditions, setting out in more detail how we expect NESO to fulfil its obligations. This document sets out our decision on that consultation, and alongside it on our website we have published the final version of the Guidance document. OFG1164 Decision – Future Energy Pathways Guidance © Crown copyright 2025 The text of this document may be reproduced (excluding logos) under and in accordance with the terms of the Open Government Licence. Without prejudice to the generality of the terms of the Open Government Licence the material that is reproduced must be acknowledged as Crown copyright and the document title of this document must be specified in that acknowledgement. Any enquiries related to the text of this publication should be sent to Ofgem at: 10 South Colonnade, Canary Wharf, London, E14 4PU. This publication is available at www.ofgem.gov.uk. Any enquiries regarding the use and re-use of this information resource should be sent to: psi@nationalarchives.gsi.gov.uk 2 Decision – Future Energy Pathways Guidance Contents Decision: Future Energy Pathways Guidance .......................................... 1 Introduction ............................................................................................ 4 Overview ........................................................................................... 4 Context for publication ......................................................................... 4 Our decision-making process ................................................................ 5 Decision-making stages ................................................................... 6 General feedback ............................................................................ 6 2. Develop a set of strategic pathways to net zero ................................ 7 Decision ............................................................................................ 7 Respondents’ views and our rationale for change ..................................... 7 3. Types of pathways and presentation of non-delivery of net zero futures .................................................................................................. 10 Decision ........................................................................................... 10 Respondents’ views and our rationale for change .................................... 10 4. Time horizon for pathways .............................................................. 12 Decision ........................................................................................... 12 Respondents’ views and our rationale for change .................................... 12 5. Treatment of high-impact, low-probability events .......................... 14 Decision ........................................................................................... 14 Respondents’ views and our rationale for change .................................... 14 6. Incorporating network constraints into the modelling .................... 16 Decision ........................................................................................... 16 Respondents’ views and our rationale for change .................................... 16 7. Improvements to transparency in analysis and outputs .................. 19 Decision ........................................................................................... 19 Respondents’ views and our rationale for change .................................... 19 8. National and regional outputs ......................................................... 21 Decision ........................................................................................... 21 Respondents’ views and our rationale for change .................................... 21 9. Timing of the FEP publications ........................................................ 23 Decision ........................................................................................... 23 Respondents’ views and our rationale for change .................................... 23 3 Decision – Future Energy Pathways Guidance 1. Introduction Overview 1.1 The UK is committed to delivering a clean power system by 2030, and a net zero energy system by 2050. The scale of this challenge requires all energy system actors to move to a more focused, directional, view of the future that is clearer about what that system will look like in the intervening years. 1.2 In recognition of that urgency, we have asked NESO to move away from their previous approach to ‘Future Energy Scenarios’, which outlined a variety of potential futures, to ‘Future Energy Pathways’, which explore credible pathways to deliver Great Britain’s 2050 net zero and interim emissions targets. 1.3 In parallel, NESO are developing a Strategic Spatial Energy Plan (SSEP). This plan is a GB-wide plan out to 2050, assessing the optimal locations, quantities and types of energy infrastructure required to meet our future energy demand. NESO expects to publish the final SSEP by the end of 2026. 1.4 The SSEP will act as the underpinning analysis to inform the network infrastructure needed to ensure that energy supply can reach demand. This work will also be done by NESO, via their Centralised Strategic Network Plan (CSNP), which will be published in 2027. NESO will also be producing Regional Energy Strategic Plans (RESPs) that set net zero regional energy pathways that align with local needs and have local democratic oversight. The RESP pathways will provide the local contribution and information to the national requirements identified by the SSEP, as well as provide analysis for local network development. 1.5 We acknowledge that in the future there may be information needed for network planning – at both national and regional levels – that will not be contained in either the SSEP or the RESPs. We will require NESO to lay out, as part of its July 2025 pathways publication, how it sees the role of the Future Energy Pathways developing once the SSEP and the RESPs are in place. Context for publication 1.6 National Energy System Operator Limited (NESO) is required by its licences to produce Future Energy Pathways that model GB-wide energy supply and demand for electricity and gas (including natural gas and hydrogen). 1.7 In December 2023 we published our decision on how the previous future energy scenarios should evolve into future energy pathways, to help inform future 4 Decision – Future Energy Pathways Guidance network investment needs. We said we would implement our decision via licence conditions for NESO, which were consulted on, finalised, and published in 20241. 1.8 As part of that decision, we said we would provide further guidance to NESO on how to fulfil its obligations under those licence conditions, and we consulted on a draft version of that guidance in August 20242. 1.9 Having carefully considered all responses to that consultation, we have updated the draft guidance to provide further detail on the process, procedures and considerations NESO must take into account when producing both the pathways, as well as their methodology for developing those pathways. Our decision-making process 1.10 We consulted on the eight sections of a draft version of the Future Energy Pathways Guidance (Guidance), asking if respondents thought it aligned with the decisions we made in December 2023. Respondents had three options: ‘Yes’, ‘No’ or ‘I’m not sure’ – for the latter two, respondents were asked to explain why and give evidence if possible. 1.11 We received 21 responses to the consultation, none of which indicated they were to be treated as confidential. We have taken into consideration all responses when making our decision, and have summarised the key points received and provided reasoning for our decision. All responses have been published alongside this decision document on our website. 1 Designation of the National Energy System Operator (NESO) - GOV.UK 2 Future Energy Pathways (FEP): draft guidance - Ofgem - Citizen Space 5 Decision – Future Energy Pathways Guidance Decision-making stages Date Stage description 13/08/2024 Stage 1: Consultation open 13/09/2024 Stage 2: Consultation closes (awaiting decision), Deadline for responses 28/02/2025 Stage 3: Responses reviewed and published 28/02/2025 Stage 4: Consultation decision/policy statement General feedback We believe that consultation is at the heart of good policy development. We are keen to receive your comments about this report. We’d also like to get your answers to these questions: 1. Do you have any comments about the overall quality of this document? 2. Do you have any comments about its tone and content? 3. Was it easy to read and understand? Or could it have been better written? 4. Are its conclusions balanced? 5. Did it make reasoned recommendations? 6. Any further comments Please send any general feedback comments to stakeholders@ofgem.gov.uk. 6 Decision – Future Energy Pathways Guidance 2. Develop a set of strategic pathways to net zero Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to model and develop multiple, longer-term strategic pathways and a single short-term pathway. Having considered all responses, we have decided to amend the text of the Guidance to provide further clarity on the presentation of progress towards targets in the pathways, on issues affecting deliverability and costs, and of use of the pathways. Q1. Do you agree that section one of the draft guidance aligns with the decisions we made in December 2023? Decision 2.1 We have amended the text of the Guidance slightly to clarify that NESO must highlight where government policy ambitions have been met or missed, but that we do not expect the licensee to provide subjective commentary on the government’s design of any related policy framework. 2.2 We have added a requirement for NESO to highlight costs in the pathways where possible, noting the challenge of predicting eg financeability or workforce skills out to 2050. 2.3 We have also added a requirement for NESO to include in its FEP publication an explanation of how the outputs of the FEP will be used in their various strategic planning roles. Respondents’ views and our rationale for change 2.4 We received 20 responses to Question 1, covering a broad range of topics. The majority of respondents explicitly agreed that the Guidance aligned with our decision to set out strategic pathways rather than scenarios. No stakeholders thought the Guidance departed from the December 2023 decision. There was support for a variety of different long-term pathways representing alternative routes to net zero, and an emphasis on the need for the pathways to utilise a whole system approach with all energy vectors included. 2.5 Two respondents were concerned that requiring NESO to indicate where government ambitions were not being met might lead NESO into overly political ground. We do not consider this to be a risk; in fact, highlighting where a policy may fall short of its desired intent will be valuable information for policy makers 7 Decision – Future Energy Pathways Guidance seeking to maximise the effectiveness of their decisions. We do not expect NESO to provide subjective commentary on the design of any government policy that may lead to missed goals, merely to highlight any such occurrences. For example, NESO may highlight that domestic uptake of heat pumps has not met the desired level in 2035, due to low uptake levels in specific regions. We do not expect NESO to then provide a critique of why the policy did not sufficiently motivate demand in those regions, but we do expect NESO to comment on factors that are known, such as workforce or financeability constraints. We have amended to text of the Guidance to clarify this. 2.6 There were a range of views on the specificity and timing of moving to a single short-term pathway and its optimum length. Four respondents were in favour of flexibility on the number and length of pathways. Three respondents wanted a longer short-term pathway and one wanted a shorter short-term pathway. Two respondents wanted no single short-term pathway. 2.7 Particularly given this diversity of opinion, we are not inclined to revisit our decision on this topic, which required NESO to consult with their stakeholders on the length of the short-term pathway before coming to a decision. This may need to remain an iterative process for a few years, as other strategic planning processes and outcomes provide more certainty in their turn (such as tCSNP, SSEP, RESP, and CSNP outputs3). 2.8 Four respondents raised the importance of workforce modelling as part of a deliverability component of the pathways. Another three respondents highlighted that consumer behaviour also affected deliverability. We have updated the Guidance to include these issues as examples of considerations NESO should take into account when producing pathways. 2.9 One respondent thought that infrastructure requirements should be included as part of any overall deliverability assessment. We agree that infrastructure is a vital component of delivering net zero, but the pathways are only intended to show how supply and demand may be balanced in differing routes to get to net zero, albeit with clear implications for subsequent network need. It is the CSNP and the networks’ business plans that will pick up on the actual optioneering and identification of solutions to provide that network, not for the pathways themselves. 3 These are: transitional Centralised Strategic Network Plan (CSNP), Strategic Spatial Energy Plan (SSEP), Regional Energy Strategic Plan (RESP), and Centralised Strategic Network Plan (CSNP). 8 Decision – Future Energy Pathways Guidance 2.10 Two respondents highlighted requested including indicative costs, where these could be measured, to facilitate the comparison of pathways at various stages. We think this could be useful information for policy makers and industry, but acknowledge the challenges in providing comprehensive costs out to 2050, both within and across pathways. We have amended the Guidance to require NESO to include such costs where possible, rather than an absolute requirement. 2.11 In addition to the questions we asked, a high number of stakeholders also requested that NESO provide an explanation of how it will use the various outputs of the pathways, the SSEP, and the RESPs in practice, and particularly to inform the CSNP. 2.12 We agree that clarity on this point is needed, to reassure stakeholders that NESO will not be running redundant programmes, or programmes with contradictory outputs that reduce confidence in the analysis for investment decisions. We have amended the Guidance to require NESO to publish within its FEP publication an explanation of how the outputs of the FEP will be used in its various strategic planning roles. This includes which FEP outputs will be used to supplement the SSEP outputs to inform the CSNP, and the feedback loop proposed between the various planning tools (FEP, SSEP, CSNP, RESPs). 9 Decision – Future Energy Pathways Guidance 3. Types of pathways and presentation of non- delivery of net zero futures Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to produce main pathways that meet net zero, plus a counterfactual showing the implications of not meeting net zero. Having considered all responses, we have decided to amend the guidance to require more detail on interim targets, and to provide greater clarity on the use of the counterfactual. Q2. Do you agree that section two of the draft guidance aligns with the decisions we made in December 2023? Decision 3.1 We have made minor textual amendments to the Guidance to include a requirement that an explanation should be given where interim or regional targets are missed, to make the purpose of the counterfactual clearer, and to clarify NESO’s role in determining the number of pathways. Respondents’ views and our rationale for change 3.2 We received 16 responses to Question 2, the majority of whom specifically stated they agreed that the Guidance implemented our decision. Most responses focused on the detail and uses of the counterfactual. 3.3 Five respondents asked for further clarity on which targets must be met, and which interim targets could be missed. We agree that the Guidance could be clearer. We have amended the text to clarify that the legally binding carbon reduction targets are the carbon budgets and net zero by 2050 target, as set out in the Climate Change 2008 Act4, and to require that the reasons for missing regional targets should be transparent, and where pathways do not meet these, an explanation should be provided. 3.4 Two respondents wanted further detail on the intended uses of the counterfactual. For the counterfactual, we have articulated that its purposes 4 Climate Change Act 2008 (as amended) 10 Decision – Future Energy Pathways Guidance include assisting policy makers to identify where existing policies are insufficient, in order to target resources and policies. 3.5 One stakeholder said that the draft guidance did not clearly specify who is ultimately responsible for deciding the appropriate number of net-zero pathways following the consultation. We have tightened the language in the Guidance to make clear that NESO will make this decision after consulting stakeholders, and subject to approval by Ofgem when the Methodology is submitted. 3.6 Two stakeholders suggested that the potential proposals being considered in the Review of Electricity Market Arrangements (REMA) should be factored into the modelling of FEP pathways. We agree that any potential decisions in this area will naturally affect build, costs, and placement data, but until such decision is made it is not possible for us to dictate how NESO should react to it. We do expect NESO to regularly review the impact of changing policies on development of the pathways, and have added a clause to that effect in section 8 of the Guidance, that covers changes in policy more generally as relating to NESO’s strategic planning role. 3.7 Two stakeholders thought that requiring the counterfactual to show potential network development, economic and financial implications of falling short, was outside the remit of the pathways. We agree that the solutions to these implications do sit elsewhere in the strategic planning process, such as in CSNP for network development. But the counterfactual is intended to highlight the consequences of continuing with current policies, and by definition that includes data that shows where network build fails to keep pace with demand, or where the costs of catching up to meet net zero targets may exceed the costs of earlier activity. We require this to be highlighted where it can be shown. 11 Decision – Future Energy Pathways Guidance 4. Time horizon for pathways Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to create pathways up to at least 2050 to align with the net zero by 2050 requirement. Having considered all responses, we have decided to amend the text of the Guidance to clarify NESO’s role in extending the pathways, and its treatment of assets extending beyond 2050. Q3. Do you agree that section three of the draft guidance aligns with the decisions we made in December 2023? Decision 4.1 We are not changing our decision on the 2050 horizon, but have amended the Guidance to clarify how NESO should engage with stakeholders on the correct time and circumstances in which they might do so, subject to Ofgem’s approval. We have also clarified that we expect to see, for example, the lifetime of assets that extend beyond 2050 taken account of in the Methodology data and assumptions. Respondents’ views and our rationale for change 4.2 We received 11 responses to Question 3, the majority of which stated that the Guidance reflected our decision. 4.3 Nine respondents said that they would prefer an extension of the time horizon of the pathways to include either a rolling 25-year window, or to consider the life- time asset cost in some other manner. 4.4 We will leave the requirements in the Guidance as they are. We accept the points made by stakeholders regarding life-time asset costs of over 40 years in some cases, and expect NESO to account for those in its underlying data and assumptions. But we do not see the case for the pathways themselves to stretch past 2050 as yet. We have no settled policy or targets past this date, so it is difficult to direct NESO as to what they should make such a pathway achieve. 4.5 We have however, amended the text of the Guidance to clarify that NESO should include in the Methodology a clear approach to consult with stakeholders on the times and triggers for extending the pathway timescales. NESO must also account 12 Decision – Future Energy Pathways Guidance for the lifetime of assets, benefits, and other long-term costs extending beyond 2050 in the underlying data and assumptions used in the Methodology. 13 Decision – Future Energy Pathways Guidance 5. Treatment of high-impact, low-probability events Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO that the Future Energy Pathways model should be capable of incorporating, and testing, extreme data ranges that are high impact, low probability (HILP). Having considered all responses, we have decided to amend the text of the Guidance to include more examples of HILPs, and to include an exception for potential security risks. Q4. Do you agree that section four of the draft guidance aligns with the decisions we made in December 2023? Decision 5.1 We have amended the Guidance to include an additional publishing exception for potential security implications, and included a few more examples of HILPs in the (non-exhaustive) list given in the Guidance. Respondents’ views and our rationale for change 5.2 We received 16 responses to Question 4, 7 of whom explicitly agreed with the question, and the majority of whom had additional suggestions to make. 5.3 A number of stakeholders wanted reassurance that there would be stakeholder engagement on the treatment of HILPs in the FEP modelling capacity; we consider that the Guidance contains adequate requirements in this regard and so do not propose to make changes. 5.4 A majority of stakeholders also gave additional examples of things that might be considered HILPs to add to the list in the Guidance. We are wary of providing too many examples, as the list is intended to be indicative of type, not an exhaustive coverage of all potential HILPs. NESO must consult with stakeholders on the type (and treatment) of HILPs it will explore, and we expect stakeholders to engage fully with that process to identify the most appropriate method of identification. 5.5 One stakeholder stated that NESO should not just set out a process to develop its HILP modelling capability, but also set out a timetable for doing so. We agree with this point and have amended the Guidance to make this a requirement for the Methodology, to be submitted to Ofgem for approval. 14 Decision – Future Energy Pathways Guidance 5.6 One stakeholder queried the lack of definitions for ‘risk appetite’ in the context of HILP analysis helping to inform decisions on appropriate risk appetite for system need. We do not think a definition is required here, mainly because the decisions being made will be made under separate processes, such as the CSNP for future network build. The CSNP will have its own requirements for dealing with risk, and should not be fettered by definitions made in this Guidance. As HILPs will not be included in the pathways themselves, we consider the risk of a low probability event causing an overly risk averse approach in a pathway is not likely to materialise. 5.7 One stakeholder was concerned that publishing too much detail about resilience to an event could inadvertently provide parties with insights that could compromise the security of the system. We recognise this risk and have amended the Guidance text to clarify that we expect such analysis should be submitted to Ofgem on a confidential basis rather than made publicly available. 5.8 NESO responded to the consultation to say that it thought HILP analysis should sit outside of the FEP publications. Whilst we agree that HILP analysis should not form part of the published pathways themselves, we do not agree that the capability and assumptions made for HILP testing should be separated from the FEP process. Stakeholders need to have assurance that the appropriate considerations, parameters, and uncertainties have been considered when creating the underlying analysis for the pathways. As such, we have not amended this requirement in the Guidance. 15 Decision – Future Energy Pathways Guidance 6. Incorporating network constraints into the modelling Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to factor in network constraints in the short term only. Having considered all responses, we have decided to amend the Guidance to include additional consultation requirements on definitions, to expand the requirement to model constraints to the gas sector, and for NESO to work on further developments for both gas and distribution level modelling. Q5. Do you agree that section five of the draft Guidance aligns with the decisions we made in December 2023? Decision 6.1 We have amended the Guidance to be explicit about the requirement for NESO to model gas constraints, as well as electricity constraints. We have dropped the requirement for NESO to model constraints within the distribution system in the next iteration of the FEP in 2025, and clarified that constraints should be modelled down to the grid supply points on distribution systems. We have included new requirements for NESO to set out the process and timescale for incorporating distribution level data and gas constraint data in further iterations of the FEP. Respondents’ views and our rationale for change 6.2 We received 19 responses to Question 5, the majority of whom made suggestions for further clarity in the Guidance. 6.3 Four respondents highlighted that a whole system pathway must include consideration of potential gas network constraints, as well as electricity. We agree; now that NESO has a remit to consider all energy vectors in its planning roles, the impact of changes in markets and infrastructure for gas will have direct impacts on its planning for the electricity system, and vice versa. However, it will take NESO some time to adapt the FEP modelling process to incorporate gas data and modelling systems, which will not be possible for the pathways due in July 2025. As such, we have amended the Guidance to say that NESO must set out in 16 Decision – Future Energy Pathways Guidance its next Methodology how the inclusion of gas modelling will be achieved, and on what timescale. 6.4 One respondent suggested including water restraints also as it is a key factor for hydrogen production. However, the pathways will not be spatially placing hydrogen production, so as water availability differs across GB we consider any analysis would be speculative and of limited practical use. 6.5 Five respondents requested an explicit requirement for NESO to consult with stakeholders on the definition of near and long term for the purpose of modelling constraints. We agree that engagement and transparency on this issue will increase confidence in the outputs of the FEP, and so have included this requirement in the Guidance. 6.6 One respondent thought distribution level modelling was unnecessary, stating that distribution level planning is short term demand led, and so capacity can be provided speedily when need arises on the distribution system. They considered that it was transmission level reinforcement only that can take many years to materialise and so required more forward planning. 6.7 However, other respondents thought distribution level modelling – particularly in the context of constraints – should be included, or at least down to the 132kV level. We agree that distribution networks – gas and electricity – form a substantial part of the potential constraint issues leading to siting of generation and economic development, and as such should be modelled. However, it will take NESO some time to adapt the FEP modelling process to incorporate distribution level data and modelling systems, and to clarify exactly how this modelling work will interact with the Regional Energy System Plan modelling work being developed. As such, we have amended the Guidance to say that NESO must set out in its next Methodology how this will be achieved, and on what timescale. 6.8 Two respondents queried whether voltage constraints should be considered alongside thermal constraints, as voltage constraints are a substantial cost to the system, albeit not on the same scale as thermal constraints. However, with renewable generation increasing substantially in the coming year, voltage constraints may also rise. 6.9 It is a valid point, but we think that the Centralised Strategic Network Plan (CSNP) is the correct process for scrutinising voltage constraints. The FEP produces pathways that show different possibilities for supply and demand to be met out to 2050, with subsequent implications for network build. What it is not 17 Decision – Future Energy Pathways Guidance designed to do, is then explore that potential network build in any level of detail. Potential voltage constraints would depend on the nature of the network solution being proposed, and that is where the CSNP will pick up this issue in its operability assessments. As such, we will not be including this issue in the FEP Guidance. 18 Decision – Future Energy Pathways Guidance 7. Improvements to transparency in analysis and outputs Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to follow open data best practice, and demonstrate how its key decisions in this area were taken. Having considered all responses, we have decided to amend the Guidance to clarify requirements for confidential treatment and validation of data, and NESO’s audit of the process. Q6. Do you agree that section six of the draft guidance aligns with the decisions we made in December 2023? Decision 7.1 We have amended the Guidance to give examples of reasons for which NESO may not publish all the data, assumptions, models, or algorithms that is has used. We have also added further clarity to the requirement to explain the rationale for adopting (or not) stakeholder feedback, and that NESO should highlight where they have not been able to validate external data. Respondents’ views and our rationale for change 7.2 We received 14 responses to Question 6. The majority specifically stated that they agreed with the requirements 7.3 Four respondents raised concerns about the NESO’s approach to treatment of sensitive data. Although the Guidance already contains a requirement for NESO to be clear with stakeholders how their sensitive data will be treated, we have clarified a requirement for NESO to obtain bespoke agreements with external providers of data where necessary to protect critical datasets. We expect stakeholders by default to share all data possible now that NESO is a public body. 7.4 One respondent stated that NESO should validate any external data that was used. We do not consider that this will always be possible and so will not make it a requirement. We have however, included a requirement that NESO should highlight their level of confidence in the integrity of external data inputs used. 7.5 Another respondent wanted to see greater clarity on how stakeholder responses were considered. We think it will provide greater confidence in the resulting 19 Decision – Future Energy Pathways Guidance pathways to understand how concerns have been dealt with, and so have amended the Guidance to include a requirement to provide a rationale for adoption or rejection of stakeholder feedback. 20 Decision – Future Energy Pathways Guidance 8. National and regional outputs Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to produce national and regional pathways. Having considered all responses, we have decided to amend the guidance to reflect stakeholders preference for more granular regional data, but not presented as regional pathways. Q7. Do you agree that section seven of the draft guidance aligns with the decisions we made in December 2023? Decision 8.1 We have amended the Guidance from our consultation version to remove the requirement for the FEP to produce regional pathways, but to clarify the expectations of useability of the granular regional datasets that NESO should publish. Respondents’ views and our rationale for change 8.2 We received seventeen responses to Question 7. The majority of these agreed that FEP should provide more granular detail at regional and vector level, but most also felt that regional pathways were no longer an appropriate presentational output for FEP. 8.3 Since we consulted on the draft FEP Guidance, the role and timescales for NESO’s production of RESPs have clarified. We expect NESO to develop regional pathways, that model supply and demand, as part of the development of a smaller scope transitional RESP in Autumn 2025, and then on an enduring basis from the end of 2027. 8.4 Given this earlier timeframe, we consider that FEP has no need to produce a separate set of regional pathways. FEP should instead focus on providing the appropriate datasets that allow stakeholders to spatially map demand and supply factors relevant to their specific requirements. 8.5 Later in spring 2025 we will be publishing our decision on the RESP policy framework setting our expectations for how NESO should develop the RESP methodology and then the plans. 21 Decision – Future Energy Pathways Guidance 8.6 We expect the FEP to act as a national input to the RESP regional pathways and for iterative feedback processes to be established between the FEP and RESP pathways. 8.7 The second point raised by the majority of respondents concerned further clarity on the interaction of NESO’s various strategic planning roles. Although we do not consider that FEP Guidance is the appropriate document in which to make statements about other policies, we have amended the Guidance to require NESO to demonstrate in the FEP publication how they have ensured consistency in data and assumptions across both their internal processes, as well as taking into account external modelling, such as that done for offshore spatial modelling by The Crown Estate, and the Crown Estate Scotland, and the distribution future energy scenarios (DFES). 22 Decision – Future Energy Pathways Guidance 9. Timing of the FEP publications Section summary In our consultation we asked if the proposed guidance aligned with our previous decision setting out the requirements for NESO to provide a ‘major’ FEP publication in a three- yearly cycle, with the flexibility to provide interim ‘minor’ update publications in the years in between. Having considered all responses, we have decided to amend the Guidance to clarify triggers for updates, and timing of publications. Q8. Do you agree that section eight of the draft guidance aligns with the decisions we made in December 2023? Decision 9.1 We have amended the Guidance to strengthen the requirement for NESO to consult with stakeholders on what criteria might trigger a minor, or major, update to the FEP outside of the three-year cycle. 9.2 We have also amended the Guidance to clarify expected publication dates, by removing a reference to a range of dates, in favour of a specific date. Respondents’ views and our rationale for change 9.3 We received fifteen responses to Question 8. All considered that the Guidance reflected the decision, but a number of stakeholders raised the same two issues around clarity of triggers for out of cycle updates, and timing of updates. 9.4 Four respondents considered that the date range for publishing the FEP of “18 months to two years” did not provide enough certainty in the planning calendar. We had intended to leave some flexibility for NESO as part of the CSNP preparation cycle, but appreciate that fixed dates do provide a more predictable cycle. As such, we have amended the Guidance to specify that major FEP publications must be published by the end of July, two years prior to the main CSNP publication. This aligns with amendments made to the final FEP licence conditions following the March 2024 statutory consultation. 9.5 Six respondents expressed a desire for more clarity on the triggers or criteria that would initiate a minor or major update. The Guidance already contains the requirement for NESO to consult with their stakeholders on the criteria for triggering a major update out of cycle. This should become a standing item in NESO’s Methodology consultation and publication. Whilst we do not think such a 23 Decision – Future Energy Pathways Guidance substantive requirement is necessary for identifying trigger events or information for minor updates, we will require NESO to be transparent about their rationale for doing so. 9.6 A few stakeholders raised different queries around the timing cycle in general; whether a three-year cycle was optimal for the CSNP (and so FEP by extension) process, whether FEP publications should be moved closer to CSNP publications, or whether either should align with price controls. We have, however, consulted previously5 on this and having agreed with NESO their optimal planning cycle for interaction between these two roles, do not intend to revisit that decision. 5 Decision on the framework for the Future System Operator’s Centralised Strategic Network Plan 24 --- To: National Energy System Operator Limited Direction under Part B of Condition C15 (Future Energy Pathways) of the Electricity System Operator Licence and Part B of Condition C10 (Future Energy Pathways) of the Gas System Planner Licence to issue the Future Energy Pathways Guidance 1. The company to which this direction is addressed, National Energy System Operator Limited (NESO), is the holder of an Electricity System Operator Licence (“ESO Licence”) treated as granted under Section 6(1)(da) of the Electricity Act 1989 and a Gas System Planner Licence (“GSP Licence”) granted under Section 7AA of the Gas Act 1986. 2. The Gas and Electricity Markets Authority (“the Authority”)1 issues this direction, under Conditions C15.7 of the ESO Licence (Future Energy Pathways) and C10.7 of the GSP Licence (Future Energy Pathways), to issue and put into effect the Future Energy Pathways Guidance (“Guidance”). 3. On 13 August 2024 the Authority published the text of the proposed Guidance on the Authority’s Website2 and requested that any representations be made on or before 13 September 2024. 4. We received 21 responses to our consultation, which we have carefully considered. All responses were non-confidential and we have placed these on our website. Our response to these representations is set out in the decision document published alongside this direction. 5. We have made two material changes to the Guidance as a result of consultee feedback. 6. The first is to remove the requirement that NESO produce regional, as well as national, pathways. Since we consulted on the draft Guidance, the role and timescales for NESO’s production of Regional Energy Strategic Plans (RESPs) have been clarified. We expect NESO to develop regional pathways, that model supply and demand, as part of the development of a smaller scope transitional RESP in Autumn 2025, and then on an enduring basis from the end of 2027. Given this earlier timeframe, we consider that the Future Energy Pathways have no need to produce a separate set of regional pathways. 7. Secondly, we have added a requirement for NESO to develop the capacity to model more granular distribution (gas and electricity) supply and demand data. NESO must set out a predicted timescale for this work to be undertaken. 8. We have also made a number of minor amendments and clarifications to the proposed text of the Guidance to address wider points raised in the consultation responses. We have set out the rationale for these amendments in the decision document published alongside this direction. 1 The “Authority”, “Ofgem”, “we” and “our” are used interchangeably in this document. The Office of Gas and Electricity Markets (Ofgem) supports the Gas and Electricity Markets Authority (GEMA) in its day to day work. 2 Future energy pathways (FEP): draft guidance | Ofgem The Office of Gas and Electricity Markets 10 South Colonnade, Canary Wharf, London, E14 4PU Tel 020 7901 7000 www.ofgem.gov.uk 9. The reason for this direction is to issue and put into effect the Guidance which sets out the principles and expectations that NESO must follow to produce Future Energy Pathways. 10. This direction is our notice of reasons for the purposes of section 49A of the Electricity Act 1989 and section 38A of the Gas Act 1986. 11. Now the Authority, pursuant to Condition C15 of the ESO Licence (Future Energy Pathways) and Condition C10 of the GSP Licence (Future Energy Pathways ), hereby directs that the Guidance, published on our website on 28 February 2025, is issued and will have effect from 28 February 2025. Jack Presley Abbott Deputy Director, Connections and Strategic Planning Duly authorised on behalf of the Gas and Electricity Markets Authority 28 February 2025 The Office of Gas and Electricity Markets 10 South Colonnade, Canary Wharf, London, E14 4PU Tel 020 7901 7000 www.ofgem.gov.uk --- Guidance Future Energy Pathways Guidance Publication date: 13 August 2024 Contacts: Joanna Gaches, Tristan Bishop Team: Email: Transmission Network Planning strategicplanning@ofgem.gov.uk This Future Energy Pathways Guidance Document is issued by Ofgem1 pursuant to licence conditions C15 of the Electricity System Operator Licence and C10 of the Gas System Planner Licence (Future Energy Pathways). It is directed at the National Energy System Operator (NESO) as the designated Independent System Operator and Planner2 (henceforth ‘the licensee’). The purpose of this document is to set out instructions and guidance on the process, content and timeframe for producing the Future Energy Pathways Methodology and the Future Energy Pathways. Cross references to conditions of the Electricity System Operator Licence and Gas System Planner Licence are to those versions of the licences published on 28 March 2024 in the “National Energy System Operator (NESO) licences and other impacted licences: statutory consultation”3. These cross references are subject to change following a statutory decision and publication of the final version of these licences. 1 References to the “Authority”, “Ofgem”, “we”, “us” and “our” are used interchangeably in this document. The Authority refers to GEMA, the Gas and Electricity Markets Authority. The Office of Gas and Electricity Markets (Ofgem) supports GEMA in its day to day work 2 See Part 5 of the Energy Act 2023 for further detail (https://www.legislation.gov.uk/ukpga/2023/52/part/5) 3 National Energy System Operator (NESO) licences and other impacted licences: statutory consultation | Ofgem OFG1163 Guidance – Future Energy Pathways Guidance FEP Guidance Document change control log Version 1 Published: 13 August 2024 © Crown copyright 2024 The text of this document may be reproduced (excluding logos) under and in accordance with the terms of the Open Government Licence. Without prejudice to the generality of the terms of the Open Government Licence the material that is reproduced must be acknowledged as Crown copyright and the document title of this document must be specified in that acknowledgement. Any enquiries related to the text of this publication should be sent to Ofgem at: 10 South Colonnade, Canary Wharf, London, E14 4PU. This publication is available at www.ofgem.gov.uk. Any enquiries regarding the use and re-use of this information resource should be sent to: psi@nationalarchives.gsi.gov.uk 2 Guidance – Future Energy Pathways Guidance Contents Future Energy Pathways Guidance .......................................................... 1 FEP Guidance Document change control log ........................................... 2 Version 1 ........................................................................................... 2 1. Introduction ...................................................................................... 4 Background and overview .................................................................... 4 Context and related publications ........................................................... 6 FEP Guidance Document ...................................................................... 7 2. Developing the Methodology ............................................................. 8 Section 1 - Develop a set of strategic pathways to net zero ....................... 8 Section 2 - Type of pathways, and presentation of non-delivery of net zero futures .............................................................................................. 9 Section 3 - The time horizon for pathways ............................................ 10 Section 4 - Treatment of high-impact, low-probability events ................... 10 Section 5 - Incorporating network constraints into the modelling .............. 12 Section 6 - Improvements to transparency in analysis and outputs ........... 12 Section 7 - National and regional outputs ............................................. 13 Section 8 - Timing of FEP publications .................................................. 14 3. Wider requirements ........................................................................ 15 Stakeholder engagement for Methodology ............................................ 15 Compliance ...................................................................................... 15 Final Methodology approval ................................................................ 15 Change control and continuous improvement ........................................ 16 3 Guidance – Future Energy Pathways Guidance 1. Introduction Background and overview 1.1 To meet the UK’s net zero targets, the energy system will need to go through radical change over the coming decades, with a significant increase of renewable generation connecting to the electricity transmission system. There is significant uncertainty around the timing, location, size and technology type of many of the large-scale changes in generation and demand. This presents particular challenges to planning and building the significant network investments required to match demand and supply. 1.2 In light of these prospective changes to the energy system, beginning in 2021, Ofgem undertook a review of transmission network planning. In November 2022, Ofgem decided that National Grid Electricity System Operator4 henceforth referred to as ‘the licensee’ or ‘NESO’, will be responsible for creating a new Centralised Strategic Network Plan (CSNP).5 The aim of the CSNP is to provide an independent, coordinated, and longer-term approach to energy network planning in Great Britain to help meet the government’s net zero ambitions. 1.3 The Future Energy Pathways (FEP) - formerly ‘the Future Energy Scenarios’6 (FES) – is a separate but now related publication to the CSNP. The FEP, analogous to the current FES, is the modelling of pathways for future changes in the demand and supply of energy. For the CSNP, the licensee will also need to model future demand and supply of energy, identifying wider network needs for the electricity transmission network, gas transmission and the proposed hydrogen network at the national level. NESO will also be producing a Strategic Spatial Energy Plan (SSEP) that looks at optimal generation sitting across Great Britain, but the FEP’s additional range of analysis will also be used to support CSNP modelling. 1.4 Previous versions of the FES contained four scenarios, presented as equally credible outcomes for the energy system. These scenarios were used by stakeholders across the energy industry to inform national and regional policy, support investment decisions and energy network development. The licensee also 4 It is expected that, upon designation as the Independent System Operator and Planner, National Grid Electricity System Operator will change its company name to National Energy System Operator (NESO). 5 Decision on the initial findings of our Electricity Transmission Network Planning Review, November 2022 6 https://www.nationalgrideso.com/future-energy/future-energy-scenarios-fes 4 Guidance – Future Energy Pathways Guidance used the FES for electricity transmission network planning with data from the FES used to produce the Electricity Ten Year Statement7 (ETYS) that identified transmission network capacity needs. From this, electricity Transmission Owners (TOs)8 responded with a range of options to reinforce the network. These proposals were assessed by the licensee through the NOA process. The licensee then published a recommendation to ‘proceed’, ‘hold’ or ‘stop’ specific investments. These processes are all subject to change as part of the development of the CSNP. 1.5 With the licensee now having new responsibilities for strategic planning, strategic pathways, instead of illustrative scenarios, need to be produced to be more directive about the type and scale of investment needed to meet 2050 net zero targets. The current requirement for the licensee to produce energy scenarios does not contain sufficient specifics to meet this need, as to how the methodology should be developed – nor was there any further Guidance provided to support that obligation. To ensure that the expectations of scope and content of the new FEP are clear to all stakeholders, as well as NESO, we have created this new Guidance document to ensure the new FEP is developed in such a way as to meet the new requirements. 1.6 This FEP Guidance Document is an associated document to NESO’s Electricity System Operator (ESO) Licence and Gas System Planner (GSP) Licence setting out Ofgem’s expectations in specific areas, particularly for the FEP Methodology (henceforth ‘Methodology’), such as for process, content, and approach to stakeholder engagement. This is informed by our previous consultations9. 1.7 The Methodology will be a document, required via the licences and developed and maintained by the licensee, to publicly detail the licensee’s methodology for creating the FEP outputs. The Methodology will be subject to Ofgem approval. Following receipt and consideration, Ofgem may give a direction to the licensee that the Methodology requires further development. If this is done, then such direction will include the date by which the licensee is required to submit a revised Methodology to Ofgem for approval. 7 https://www.nationalgrideso.com/research-and-publications/electricity-ten-year- statement-etys 8 National Grid Electricity Transmission (NGET) in England and Wales, Scottish Power Transmission (SPT) in central and the south of Scotland, and Scottish Hydro Electric Transmission (SHET) in the North of Scotland. 9 https://www.ofgem.gov.uk/consultation/consultation-future-system-operator-supply- and-demand-modelling 5 Guidance – Future Energy Pathways Guidance Context and related publications 1.8 Centralised Strategic Network Plan. In November 2022, Ofgem decided that the licensee will be responsible for creating a new Centralised Strategic Network Plan (CSNP).10 The aim of the CSNP is to provide an independent, coordinated, and longer-term approach to energy network planning in Great Britain to help meet the government’s net zero ambitions. Licence conditions C12 of the GSP Licence and C17 of the ESO Licence (Centralised Strategic Network Plan) sets out the licensee’s network planning objectives and obligations11. See the related CSNP Guidance12. 1.9 Consultation on Future System Operator Supply and Demand Modelling. In May 2023 we consulted on proposals for the first stage of the CSNP which concerns how the licensee would model future energy demand and supply.13 1.10 Strategic Spatial Energy Plan. In November 2023, the UK government confirmed that a SSEP will form the generation-sitting basis for future network planning14. The SSEP is intended to set out the optimal location of new energy assets to meet forecast demand and our net zero targets. We are working with the Department for Energy Security and Net Zero (DESNZ) to support the government’s commission for the licensee to produce the first SSEP. Once a SSEP has been produced it should inform the requirements of the transmission network set out in the first CSNP. We expect that the licensee will adopt the SSEP as a key input in its CSNP Methodology in line with UK government’s decision. For resilience, the FEP will need to be created in such a way that its outputs (future demand and supply modelling) may complement or substitute for SSEP inputs for the CSNP energy modelling, where a greater level of detail is required. 10 Decision on the initial findings of our Electricity Transmission Network Planning Review, November 2022 11 https://www.ofgem.gov.uk/consultation/national-energy-system-operator-neso- licences-and-other-impacted-licences-statutory-consultation 12 [Add weblink when published] 13 https://www.ofgem.gov.uk/consultation/consultation-future-system-operator-supply- and-demand-modelling 14 https://www.gov.uk/government/publications/electricity-networks-transmission- acceleration-action-plan 6 Guidance – Future Energy Pathways Guidance FEP Guidance Document 1.11 In subsequent chapters of this FEP Guidance Document, we set out our expectations on how the licensee must develop their Methodology, including how we expect them to conduct engagement with stakeholders as part of its development. The licensee is required under licence conditions C10 of the GSP Licence and C15 of the ESO Licence to develop the Methodology in accordance with this document, and to comply with any other related licence requirements prior to submission to Ofgem for approval. The licensee must ensure that their collaboration and engagement with others in the context of the FEP is in line with this FEP Guidance Document. 7 Guidance – Future Energy Pathways Guidance 2. Developing the Methodology Chapter summary Over eight sections, this chapter sets out the principal guidance for the creation and implementation of the Methodology by the licensee. Section 1 - Develop a set of strategic pathways to net zero 2.1 The licence conditions, at sections C15.3(c) and (d) and C10.3(c) and (d) of the ESO and GSP licence respectively, set out the requirements to model and develop multiple, longer-term strategic pathways and a single short-term pathway. 2.2 Due to outstanding government policy decisions on a range of energy generation choices, the initial short-term pathway may only be of a few years. Reaching a longer single pathway - perhaps ultimately of around 7-12 years - may take several iterations. The licence conditions have provided the licensee with flexibility to amend the length of this pathway over time, subject to our approval. Conditions C15.3(d) and C10.3(d)of the ESO and GSP licence respectively allow for the licensee to determine the time period of the single pathway for each FEP as part of its methodology development with stakeholders. 2.3 Pathways are intended to show what ‘must’ happen across the sectors to enable net zero. Compared to the previous scenarios produced under the FES, we expect pathways to be specific about the type, timing, location, and scale of investment needed, rather than illustrate how possible changes in consumer or generation developments could lead to net zero being achieved. The pathways must allow the licensee to indicate if a policy target or ambition is projected to be met, including with commentary on factors outside the licensee’s control. 2.4 Pathways must represent a whole system approach, including all energy vectors though we understand this will evolve as licensee modelling capability develops and data becomes available. The Methodology must include the licensee’s approach to achieving a robust whole system approach and how this is expected to evolve over time. 2.5 As part of developing the Methodology, subject to Ofgem approval, the licensee must consult with stakeholders on: (1) the length of the short-term pathway(s); and 8 Guidance – Future Energy Pathways Guidance (2) what conditions would be required to move to a longer-term single pathway (eg the outcome of the Government’s 2026 decision on the role of hydrogen for heat). 2.6 Further, within the Methodology, the licensee must set out: (1) how/if to factor in market indicators, supply chain considerations and financeability; (2) how to factor in progress against government targets; (3) an improved approach to sensitivity and stress-testing, including reviewing its assumptions against outturns and learning lessons to improve its forecasts. Any extreme market events must be dealt with through the treatment of high-impact, low-probability events (see Section 4). The licensee must also demonstrate how this contributes to the development and justification of the single pathway, when adopted; and (4) the approach to ensure a robust whole system approach is taken, including review and adaptation over time. Section 2 - Type of pathways, and presentation of non-delivery of net zero futures 2.7 The licence conditions, at C15.13(d) and C10.13(d) of the ESO and GSP licence respectively, set out the requirements for all pathways to meet legally binding carbon reduction targets. The licensee must consult with stakeholders on the optimum number of pathways. 2.8 As part of the Methodology, the licensee must consult on how to present information on the counterfactual, showing the limitations of current policy decisions and how this would result in failure to meet legally binding carbon reduction targets. 2.9 The licensee must develop a separate counterfactual narrative, supported by data, showing the potential network development, economic and financial implications of falling short of timely progress towards legally binding carbon reduction targets. This must include analysis of delays in one sector/vector upon others. The licensee must set out in the Methodology their choice and rationale for the counterfactual presented, but we expect it will be illustrative of the likely pathway if further necessary developments do not occur. 9 Guidance – Future Energy Pathways Guidance 2.10 The licensee must meet the requirements set out in Section 6, regarding transparency, ensuring that information sharing with stakeholders is sufficiently adequate to provide opportunities for discussion of the robustness of the underlying data. 2.11 Each pathway must clearly articulate which interim carbon budget or regional targets, are met. There is no requirement for each pathway to meet all interim targets. 2.12 The approach that the licensee will take to meeting these commitments must be set out in the Methodology for our consideration. Section 3 - The time horizon for pathways 2.13 Consistent with legally binding carbon reduction targets, the requirement for longer term pathways to run to 2050 has been set out in the licence condition, including at C15.3(c) and C10.3(c) of the ESO and GSP licence respectively. 2.14 The licensee must set out in their Methodology the criteria for extending the pathways beyond 2050. These criteria must be subject to consultation with all stakeholders. 2.15 Pursuant to C15.17 and C10.17 of the ESO and GSP licence respectively, Ofgem may approve the Methodology (which will include the criteria set out in the preceding paragraph) or give a direction to the licensee that the Methodology requires further development. 2.16 Given the lifetime of assets, it is foreseen that a moving window, eg of 25 years, will be required. Section 4 - Treatment of high-impact, low-probability events 2.17 The licensee must ensure that their underlying data model for production of the pathways is capable of stress testing a range of pathways against high-impact, low-probability (HILP) events. This will ensure that the pathways are appropriately robust against HILP events that could affect demand, supply, or cause damage to assets. 2.18 In addition, their model must be capable of incorporating, and testing against, extreme data ranges for HILP events to support the licensee’s strategic planning role, as per the licensee’s duty under s.171 of the Energy Act 2023 to provide 10 Guidance – Future Energy Pathways Guidance advice, analysis or information on receipt of a request from government or the Authority. Such modelling must identify consequences across the energy sector. 2.19 The licensee