A three-part ‘Long Read’ looking at Government policy as we prepare for COP26 in Glasgow at the end of the year




For all sorts of reasons, UK politicians do at last seem to have grasped that we are in the midst of an out-and-out Climate Emergency. Despite people’s worst fears that the whole climate agenda would be sidelined by the pandemic over the course of the last year, that just didn’t happen. Indeed, the year ended in a flurry of Government activity that allows for some modest hope that Ministers might just make good on all their less-than-helpful climate hype since 2015.

It started with Boris Johnson’s Ten Point Plan on 18th November. Followed by the Energy White Paper in December. All backed up by a critical Report from the Committee on Climate Change on 9th December. Looking forward, there are three additional commitments in the pipeline for early 2021: a Heat and Building Strategy, a Hydrogen Strategy, and a Smart Energy Systems Plan. Busy times at BEIS!

And we certainly can’t fault the Government on setting appropriately ambitious targets. Back in 2019, the UK became the first major economy to legislate for a Net Zero economy by 2050. And in December last year, the Prime Minister accepted the recommendation from the Committee on Climate Change to reduce greenhouse gas emissions by 68% by 2030 (on 1990 levels) – essentially to ensure that we have a reasonable chance of getting to that Net Zero target by 2050. That 68% is significantly more ambitious than the EU’s target of 55% by 2030.

So why only ‘modest hope’? Why not full-on ‘go, Boris, go’ enthusiasm? To bottom that out, we have to dig down into the detail of the Ten Point Plan, skimming off all the turbo-charged froth, and then ask some rather harder questions of the Energy White Paper than opposition parties seem to be capable of doing. There are five areas I will be looking at:

1. Renewables
2. Buildings and heat
3. Hydrogen
4. Carbon capture, utilisation and storage
5. Nuclear power
6. Financing the transition

Perhaps unfairly, I’m not going to say much about what was absolutely the best thing in the Prime Minister’s Ten Point Plan: the decision to ban the sale of petrol and diesel vehicles by 2030, a full ten years’ earlier than the original deadline. This is very welcome – and genuinely very challenging, leaving the automotive industry in no doubt that the internal combustion engine is now, finally, on death row. Hybrids will get an additional five-year reprieve, through to 2035, but the future is now electric.

The technological, financial and infrastructure implications of this are enormous. So it was good to see some proper money on the table, promised in the Ten Point Plan, amounting to around £2bn to help with the kind of charging infrastructure that is now urgently required, and to extend the grants available to consumers purchasing their first EV. As well as a further £500m promised to support battery technology innovation.

1. Renewables

This is something of a success story for the UK. Roughly 45% of our electricity comes from renewables at the moment; just ten years ago, 40% of our electricity came from coal. In 2020, coal provided just 1.5% of the mix.

In January this year, the National Grid reported that the UK’s grid intensity (the amount of CO2 emitted per unit of electricity) had fallen to 181g of CO2/kWh. Over the last seven years, that figure has fallen by an extraordinary 66%.

And these trends will continue. We’ll be out of coal altogether by 2024, the first big industrial nation to achieve such a critical milestone. Beyond that, the goal is to make the electricity grid zero-carbon just as soon as possible.

Much of the heavy lifting here will continue to be done by offshore wind. Johnson’s Ten Point Plan confirmed the target of 40GW of offshore wind by 2030 (‘enough to power every home in the UK’), roughly four times as much as is currently installed, creating 60,000 jobs in the process. Large-scale solar and onshore wind are also going to be hugely important.

So there’s a lot riding on this year’s Contracts for Difference auction, as this will determine the prices paid to private sector developers over the next few years.

Just a couple of points here:

• For once, Boris Johnson’s resort to hyperbole was justified when he laid out his ambition for the UK to become ‘the Saudi Arabia of windpower’. In July last year, analysts at Imperial College crunched the numbers to demonstrate that when the latest offshore wind farms come on stream over the next few years (at a contracted price of £40MW/hr), this is likely to be below wholesale prices at that point. What that means is that the windfarm operators will then have to pay back the difference between the contracted price and the wholesale price, with those savings passed on in the form of lower energy bills for businesses and households. This raises the very real possibility that all future offshore wind contracts will be completely subsidy-free from the middle of the decade. A full ten years before the first (and still massively subsidised) electrons are due to be generated at Sizewell C.

That’s the story for offshore wind. Onshore wind will be even cheaper, and will feature much more prominently now that onshore wind will be included in this year’s Contracts for Difference auction.

• As will solar. According to the Government’s own figures, large-scale solar will be the cheapest generating technology by 2025 (at half the cost of combined-cycle gas turbines), and will get cheaper still through to 2040 where costs could fall as low as £28/MWh. Which may explain why BEIS called for new evidence at the end of last year as to the full potential contribution of large-scale solar to our Net Zero target, and why even Solar Energy UK’s call for a tripling of existing solar by 2030 seems modest.

In 2020, 545 MW of new solar PV was deployed in the UK, a 27% year-on-year increase compared with 2019. 60% of this came from large ground-mounted schemes; 40% from rooftop installations, mostly on commercial and industrial buildings.

The simple and most important point is this: the Government itself now recognises that renewables can be scaled quickly and cost-effectively. We’ve seen the impact of that over the last five years, even before a recognition of the full extent of the Climate Emergency in which we now find ourselves. So imagine what could now happen with that Emergency in mind.

And all this before the Government eventually bites the bullet and commits to a significant investment in tidal energy on the Severn Estuary, either through tidal lagoons or a full-blown barrage, generating totally predictable, near-zero-carbon electricity (providing around 7% of our electricity) for up to 100 years – and simultaneously protecting the whole Severn Estuary from the extreme disruption which will inevitably be caused by rising sea levels.

It’s true that the UK is particularly well endowed with renewable energy resources, but similar ‘100% renewable’ scenarios are becoming more robust every year. Mark Jacobson and his team at Stanford University have argued that 100% of all global energy can come from renewable sources (with biomass excluded) by 2050. A report from the International Energy Agency in 2019 demonstrated that offshore wind could theoretically provide enough electricity to meet total global electricity demand, predicting that offshore wind will grow 15-fold to become a $1tn industry over the next 20 years.